Kirkcaldies warns of lower profit

Listed retailer Kirkcaldie & Stains Ltd today warned its first half profit will be as much as 70 per cent lower than the same period a year earlier.

The Wellington-based company, whose flagship investment is the iconic Lambton Quay store, said it expected to post a pre-tax surplus for the six months to February 28 of between $430,000 and $460,000, compared with $1.3 million in the same period a year ago.

Kirkcaldies indicated at its annual meeting in February that sales in the first four months of the year were below par. That trend had continued in January and February, taking a big bite out of the retailer's bottom line.

Costs for the period were also higher than the same year ago period, and Kirkcaldies said "corrective measures" were in place.

The Kirkcaldies board would meet ahead of an April 20 results announcement to consider the impact of the reduced surplus on dividend payments.

Kirkcaldies warned that the cyclical nature of the business meant it was vulnerable to an ongoing slowdown in the retail sector.

"There is current uncertainty over the second half of the year, for which the outcome is equally dependent on sales," Kirkcaldies said.

"The economic outlook includes the possibility that there may be further correction of consumer spending."

Shares in Kirkcaldies last traded yesterday at $2.78 against a year high of $2.91 and a low of $2.35.

Last month, a group of mainly Wellington investors in a company called LQ Investments paid $58 million to grab a 19.9 per cent stake in the company.

The raiders paid up to $2.90 per share.

Shareholders in LQ Investments include accountant Michael Curtis and his accounting partner Stephanie McLean; William Macaulay; David Pritchard, Jacquiline Pritchard and Terry Roland; Alex and Elaine Brown; David Gibson and Graham Jackson.

Mr Curtis denied the raid was a precursor to a full takeover.

"It's a group of predominantly Wellington investors who view Kirks as an iconic Wellington investment and a good long-term hold."

- NZPA