Weak sales and quake strengthening keep Kirk's in the red

Weak sales and quake strengthening keep Kirk's in the red

Oct. 27 (BusinessDesk) – Wellington department store owner Kirkcaldie & Stains was unprofitable for a second year in its retail activities, while the cost of strengthening its Harbour City Building knocked earnings in its property arm.

The upgrade to the central Wellington property, which once housed the DIC department store, has secured long term retail and commercial tenancies from blue-chip tenants Country Road and Contact Energy.

However, the company made a loss of $56,000, or 0.55 cents per share, in the 12 months ended Aug. 31, narrowing last year’s loss of $1.9 million, or 18.63 cents per share, when changes in building depreciation tax rules weighed on the bottom line.

Kirkcaldie’s property arm made a profit of just $435,000, 71 percent down on a year earlier, as it lost $895,000 in rental income, had $335,000 in demolition costs and $152,000 in higher funding costs relating to the refurbishment of the Harbour City Building.

That meant the property investment couldn’t offset the loss of $465,000 in the retail unit, which saw sales drop 2.7 percent to $35.6 million.

Still, the company said its balance sheet remains robust with shareholder funds of almost $20 million and net equity exceeding 45 percent, and the directors declared a fully imputed final dividend of 2.5 cents per share, taking the total return to 5.5 cents for the year.

Former Guinness Peat Group chairman Ron Brierley emerged as a substantial shareholder in Kirkcaldie last month when he lifted his stake to 5.7 percent, joining former Brierley Investments chair Selwyn Cushing and his son David Cushing among the company’s owners. The Cushing family holds a 17.1 percent stake in Kirkcaldie.

The stock was unchanged at $2.72 in trading today.

(BusinessDesk)

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