Kirkcaldie & Stains profit falls 30% on discounting, costs

Friday 7th November 2008

Kirkcaldie & Stains, Wellington's upscale department store, said annual profit fell 30% as it spent more on promotions while reducing prices to maintain sales in a slumping market.

Net income fell to NZ$778,000, or 7.81 cents a share, in the 12 months ended August 31, from NZ$1.1 million, or 11.1 cents a year earlier, the company said in a statement. Sales fell 0.7% to NZ$44.6 million.

Kirkcaldie "has been impacted by the difficult retail environment that has emerged over the last six months," the company said. "The decreased profit is a result of higher markdowns and increased selling expenses."

The Lambton Quay retailer founded in 1863 by John Kirkcaldie and Robert Stains now garners more than half its pretax earnings from rental from the Harbour City Centre next door to its flagship store. Rental income rose 7.5% to NZ$5.6 million in the latest year. The Centre was valued at NZ$49.3 million as at August 31, a 5.1% increase from a year earlier.

The company will pay a final dividend of 3 cents a share, bringing payments for the year to 8 cents, it said. Shares of Kirkcaldie last traded yesterday at NZ$2.40 and have declined 4% in the past three months, outperforming the NZX 50, which dropped 16%.

By Jonathan Underhill

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