Ann: HALFYR: KRK: Market Announcement - 2014 Half

• Release Date: 28/04/14 19:13
• Summary: HALFYR: KRK: Market Announcement - 2014 Half Year Results
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					KRK
28/04/2014 17:13
HALFYR

REL: 1713 HRS Kirkcaldie & Stains Limited

HALFYR: KRK: Market Announcement - 2014 Half Year Results

The six-month period ended 28 February 2014 represented a significant
improvement on last year for both the retail and property operations. The
Group posted a pre-tax profit of $791,000 (after-tax profit: $563,000) which
compares to a pre-tax loss of $741,000 (after-tax loss: $531,000) during the
same period last year.

The retail operations reported a pre-tax profit of $231,000, a $458,000
improvement on last year pre-tax loss of 227,000. The improvement was
directly attributable to the on-going cost reduction programme with expenses
down 7.4% on last year and a 1% increase in the final margin. However the
retail operations continue to face revenue challenges with sales 4.7% down on
last year; the Wellington region is still lagging behind the rest of the
country and online shopping from overseas providers continues to register
double digits growth.

We have a considerable number of initiatives directed to boost sales planned
for the second half of the financial year.

While keeping our focus on service, selection, value and style we are
rebuilding our women's fashion. For this season we have 25 New Zealand New
Zealand brands and we are looking at expanding our international offer with a
number of UK brands following the success of the exclusive in Wellington Miss
Selfridge concept. A new concession, Sportscraft, opened on 16 April,
exclusive to Kirkcaldie & Stains in the Wellington region.

We will open, in June this year, a furniture store in Thorndon Quay,
'Kirkcaldie & Stains interiors on Thorndon', which not only will generate
incremental revenue while leveraging back office support, but will also give
us the opportunity to reorganise and expand our offer in the main store
creating a more comfortable shopping environment.

We will launch a store-wide loyalty programme in May the final part of our
IT-CRM investment plan. The programme will give us access to customers
spending habits and in turn it will allow targeted advertising and
promotions, while at the same time rewarding our loyal customers.

We are continuing to grow our online presence and by the end of the financial
year we will have most of our cosmetics offer online with a target of 30,000
individual items.

The property operations reported a pre-tax profit of $650,000 compared to a
pre-tax loss of 398,000 in the prior year. The property operations benefited
from the reinstatement of the rental income for levels 4 and 5 of the Harbour
City Centre building (HCC) now leased to Contact Energy. Last year's result
was negatively impacted by the second phase of the redevelopment work on the
HCC and associated demolitions and repairs and maintenance costs.

The redevelopment of levels 4 and 5 and common areas of the HCC which started
in October 2012 was fully completed in December 2013 and on budget.

Over the last few months we have been concentrating in finding a tenant for
the ground floor retail space in the HCC which was vacated by our retail
business last year. We are pleased to report that we are in last negotiation
stages with a well known retailer.

On 10 February 2014 the Group announced the decision to offer the HCC for
sale by international tender. Tenders closed on 16 April 2014. The Company is
continuing to work through the sales process and will keep the market
informed.

The Group balance sheet continues to be robust with shareholders' funds of
$37,670,000 which represent an equity ratio of 56.3%.

The Group held cash and cash equivalents of $3,291,000 at 28 February 2014.
The cash inflow from operating activities was $859,000, a significant
improvement on last year cash outflow of $918,000 again a reflection of our
cost reduction programme.

Despite a good start of the financial year, the Directors resolved not to pay
an interim dividend for the six-month period ended 28 February 2014; there
are still uncertainty around the second half of the year and still not a
definitive outcome on the sale of the HCC.

The Directors would like to thank 'Kirks' shareholders, customers and staff
for continuing to support their store.

Falcon Clouston
Chairman

For further information:
Mr John Milford
Managing Director
P: 04 494 7260
E: [email protected]
End CA:00249820 For:KRK    Type:HALFYR     Time:2014-04-28 17:13:26