Ann: FLLYR: KRK: Market Announcement - Full Year

• Release Date: 24/10/13 18:47
• Summary: FLLYR: KRK: Market Announcement - Full Year Result 2013
• Price Sensitive: No
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					KRK
24/10/2013 16:47
FLLYR

REL: 1647 HRS Kirkcaldie & Stains Limited

FLLYR: KRK: Market Announcement - Full Year Result 2013

The result for the 2013 financial year was, as indicated in our mid year
announcement in April 2013, a significant loss. The reorganisation of the
retail business and major building works in the Harbour City Centre building
(HCC) resulted in the Group posting a pre-tax loss of $2,384,000 which
compares to a pre-tax loss of $1,078,000 in the prior year. The after tax
result for the Group was however a profit of $168,000 due to the release of
$1,910,000 in deferred tax liability following the change in use of the HCC
from owner-occupied to investment property.

The retail operations reported a pre-tax loss of $1,836,000 which compares to
a loss of $1,760,000 in the prior year. The retail operations were negatively
impacted by a $301,000 impairment write-down in a receivable from one of its
subsidiaries, The Trustee Company Limited, and a number of one-off costs.
When removing the impact of the impairment write-down the pre-tax loss
decreased by 12.8% despite sales revenue falling by 5.8% from $34,205,000 to
$32,236,000. The gross margin percentage lifted 1.1% as a result of improved
inventory control.

The property operations reported a pre-tax loss of $527,000 compared to a
pre-tax profit of $908,000 in the prior year. The property result was
affected by a loss of rent and other expenses incurred in connection to the
refurbishment of the HCC, and by another considerable increase in insurance
premiums (66.7% increase on the prior year). In addition, costs of $161,000
were incurred for remedial works of a cosmetic nature required after the July
and August earthquakes.
On 1 July 2013 the HCC ceased to be owner-occupied and the building was
reclassified as an investment property and measured at fair value. This
resulted in the recognition of a revaluation reserve gain of $17,689,000 and
triggered the release of $1,910,000 in deferred tax liability.

The Group's balance sheet continues to be robust with shareholders' funds of
$37,071,000 which represents an equity ratio of 56.4%. Shareholders' funds
were up $18,049,000 on last year as a result of the HCC being carried at fair
value. The value of the HCC at 31 August 2013 was independently assessed at
$50,000,000 on completion of the works, at the end of October 2013.
At 31 August 2013 the Group held cash and cash equivalents of $2,746,000, a
decrease of $2,381,000 from the prior year.  The decrease was driven by lower
sales, timing of payment to suppliers and by an aggressive capital
expenditure programme in both the retail and property businesses.
The Directors resolved not to pay a final dividend for the year ended 31
August 2013.

In December 2012 Kirkcaldie & Stains Limited appointed external parties to
provide advice on the options available to facilitate the separation of
Kirkcaldie & Stains Properties Limited which owns the HCC from its parent
company, Kirkcaldie & Stains Limited which owns the retail operations. Having
carefully considered the advice received, in October 2013 the Directors
resolved that the separation of the two businesses was not in the best
interest of shareholders and the plans were abandoned.

The 2013 financial year brought significant changes to both the retail and
property businesses. The focus for 2014 is driving increased retail revenue
by providing the best customer experience in New Zealand while further
reducing our cost base.  The improved rental stream from the HCC should see
the Group return to profitability.

Falcon Clouston
Chairman

ENDS

For further information:
Mr John Milford
P O Box 1494
Wellington 6140
P: 04 494 7260
E: [email protected]
End CA:00242842 For:KRK    Type:FLLYR      Time:2013-10-24 16:47:59