Kirkcaldie & Stain's, Wellington's up-market department store, returned to a first-half profit as it squeezed bigger margins from an ailing retail unit and reinstated rental income from its property management unit.
The company made a net profit of $563,000, or 5.51 cents per share, in the six months ended Feb. 28, compared to a loss of $531,000, or 5.2 cents, a year earlier, it said in a statement. Revenue from continuing operations slipped 2.1 percent to $19.4 million.
"The improvement (in retail) was directly attributable to the ongoing cost reduction programme with expenses down 7.4 percent on last year and a 1 percent increase in the final margin," chairman Falcon Clouston said. "However, the retail operations continue to face revenue challenges with sales 4.7 percent 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."
Kirkcaldie plans to recapitalise the retail business once it sells its Harbour City Centre building on Wellington's Lambton Quay, which has been valued at $50 million.
Tenders for the building closed on April 16, and the company is working through the sales process.
The board didn't declare an interim dividend, saying there was still uncertainty about the second half of the year, and the sale of the Harbour City Centre has yet to be finalised.
The shares were unchanged at $2.10 in trading today, and have gained 11 percent this year. The company announced the result after the close of trading.
Kirkcaldie's retail operation made a profit of $193,000 in the period on sales of $17.2 million, compared to a loss of $138,000 on sales of $18 million a year earlier. The property unit made a profit of $460,000 on revenue of $2.2 million, compared to a loss of $283,000 on revenue of $2.1 million in 2013.
The Wellington-based retailer plans to open a furniture store on Thorndon Quay in June, which it sees as generating incremental revenue and leveraging back office support. It also plans to launch a loyalty programme next month