Ann: FLLYR: KRK: Market Announcement - Full Year Result 2014

• Release Date: 20/10/14 17:02
• Summary: FLLYR: KRK: Market Announcement - Full Year Result 2014
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					KRK
20/10/2014 17:02
FLLYR

REL: 1702 HRS Kirkcaldie & Stains Limited

FLLYR: KRK: Market Announcement - Full Year Result 2014

The directors of Kirkcaldie & Stains Limited (the Company) announce the
audited results for the year ended 31 August 2014.

As already indicated to the market, the 2014 financial year closed with a
significant loss. The group posted a pre-tax loss of $6,583,000 after
impairment losses of $1,463,000 and fair value losses of $4,292,000 were
recognised in the income statement. This compares with a pre-tax loss of
$2,384,000 in the prior year.

The retail operations reported a pre-tax loss of $3,106,000 against last year
pre-tax loss of 1,836,000. Revenue fell by 3.8% from 32,556,000 to
31,331,000. This decrease was compensated by a 4.3% reduction in expenses
(prior to impairment losses). The continuous loss making nature of the retail
operations prompted the Company to undertake detailed impairment testing of
its assets base. This assessment showed an impairment of $1,463,000 which has
been allocated to the Company's plant and equipment, and intangible assets.
In addition, the Company reviewed the useful lives of certain categories of
non-current assets and this resulted in accelerated depreciation of $412,000
being recognised in the income statement. When removing the impact of
impairment losses and accelerated depreciation, the pre-tax loss from the
retail operations reduces to $1,231,000 (2013: $1,181,000). Furthermore the
Company conducted a detailed assessment of its stock held for resale and this
led to an increase in the provision for stock obsolescence by $290,000,
taking the total stock obsolescence provision to $811,000.

The property operations reported a pre-tax loss of $3,319,000 which compares
to a pre-tax loss of $527,000 in the prior year, as a result of the fair
value loss of $4,292,000 recognised in the income statement in relation to
the Harbour City Centre building (HCC). At 31 August 2014, the fair value of
the HCC was assessed at $45,419,000 (2013: $49,608,000).

Shareholders' funds dropped from $37,071,000 to $30,626,000 which still
represents an equity ratio of 51.7%.

At balance date the HCC was subject to a conditional sale and purchase
agreement for $45.85 million. On 23 September 2014 the sale was approved by
the Company's shareholders and settlement occurred on 7 October 2014. On 7
October 2014 the $23.5 million loan from Westpac New Zealand Limited was
repaid and net sale proceeds of $16.8 million were paid into Kirkcaldie &
Stains Properties Limited's bank account.  The purchaser of the HCC will pay
a further $4.75m to Kirkcaldie & Stains Properties Limited on 7 October 2015.

As previously communicated, the directors resolved not to pay a final
dividend for the year ended 31 August 2014.

The focus for 2015 continues to bring the retail operations into a positive
result. A plan about the retail operations will be communicated to
shareholders at the next annual meeting. The directors are comforted by sales
revenue currently tracking 5% ahead of the same time last year.

Falcon Clouston
Chairman

ENDS

For further information:
Falcon Clouston
P O Box 1494
Wellington 6140
P: 04 499 1610
End CA:00256612 For:KRK    Type:FLLYR      Time:2014-10-20 17:02:37