ADDRESS: KRK: Chairman's address to the Annual General Meeting

16 Feb 2010 5:30 pm

KRK 16/02/2010 ADDRESS

REL: 1730 HRS Kirkcaldie & Stains Limited

ADDRESS: KRK: Chairman's address to the Annual General Meeting

Kirkcaldie & Stains Limited has posted an after tax profit of $1,024,000 for the year ended 31 August 2009 which represents an improvement on the prior year result of $246,000 or 31.61%. The retail company has had a poor result for the year posting an after tax loss of $365,000 as a result of the economic recession. This has been offset by improved results in the property company allowing the company to return an increase in profit in the current financial year.

The property company which owns the Harbour City Centre has benefitted in the current year by a review to market rent of one its' largest office tenants which took effect at the beginning of the calendar year. In addition, with interest rates at historically low levels during the financial year, the Company has been able to make considerable savings in interest expense on our long term borrowings. Kirkcaldie & Stains Properties Limited has made an after tax profit of $1,389,000 for the year.

Each year the Company commissions an independent valuation of the Harbour City Centre. In the past the valuations have shown considerable increases. This year the valuation, in line with the values of many commercial properties has reduced by $7.1M from $49,300,000 to $42,200,000. The Directors do not believe this to be a permanent diminution in value. Vacancy rates within the building remain low and rental income has increased by 1.4% during the year. Expenditure has also been carefully monitored.

Retail sales have declined by $2,034M in the current year. We do not expect that the retail environment will recover for some 12-18 months. In the meantime, the retail company continues to focus on customer service, new merchandise ranges, store refurbishments, reducing costs and improving efficiencies wherever possible.

The Directors have declared and paid dividends during the financial year totalling eight cents which have been fully imputed. This is the same level of dividends as the prior year.

I would also like to welcome Mr Falcon Clouston to the Board. Mr Clouston joined us on the 15th June 2009 after a rigorous appointment process following the resignation of Mr Murray Doyle. He has been an integral member of the Board since that date. I will be asking shareholders to vote on the reappointment of Mr Clouston later in the Meeting.

The current financial year will be another difficult year for the Company and both the Management team and the Directors will be focussed on ensuring that the Company is well placed to take advantage of the end of the current recessionary environment.

I will now call upon Mr Milford the Managing Director to address to you.

ENDS

For further information please contact:

Mr John Milford Managing Director Email: John.milford@kirkcaldies.co.nz Phone : (04) 494 7260 End CA:00191251 For:KRK Type:ADDRESS Time:2010-02-16:17:30:12

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