Sharechat Logo

Cushings edge closer to takeover threshold in Kirkcaldie

Thursday 31st May 2012

Text too small?

Selwyn and David Cushing have edged closer to the takeover threshold in Kirkcaldie & Stains, the iconic Wellington department store owner whose property assets are worth almost twice the company’s market capitalisation.

The Cushing family’s investment arm, H&G Ltd., increased its stake in the company to 18.49 percent from 17.08 percent, according to a substantial security holder notice to the NZX. H&G picked up the 144,000 shares in 15 separate trades this month, underlining the difficulty in acquiring the illiquid stock.

Kirkcaldie’s Harbour City Centre building has an August 2011 valuation of $46.5 million, which will increase to $48.7 million when earthquake strengthening is completed. At today’s share price of $2.68, the company is valued at $27.5 million.

The Cushings paid between $2.68 and $2.75 apiece for shares, or a total of $387,917, the statement says. They first appeared on the register in 2006 and were joined last year by veteran corporate raider Ron Brierley, who disclosed a 5.7 percent holding in September.

"At this price we have been very happy to add to our holding, we will be heading to 19 percent," David Cushing told BusinessDesk. "At this stage we are happy to accumulate shares” and there are no plans to make a full takeover though he added “never say never.”

The NZX-listed company operates its flagship store on Wellington’s Lambton Quay and the Harbour City Centre, a historic six-floor retail and office building next door.

"It is an interesting company with some prime Lambton Quay real estate,” Cushing said. “That is an attractive long-term asset and we are long-term investors."

Kirkcaldie told shareholders in February it's looking to expand its property arm amid ailing retail sales. The company has struggled to attract customers without discounting goods since the global financial crisis prompted households to focus on repaying debt. The store’s exposure to Wellington also means it's been hit with a double whammy as the government’s austerity plans slash jobs in the public sector, which pads out the city’s consumer base.

In April, the company posted a wafer-thin first-half net profit of $11,000 in the six months ended Feb. 28, down from $380,000, a year earlier. It flagged a full year pretax loss.

The shares, which trade infrequently, have shed about 12 percent this year.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Kirkcaldie property sale falls through after buyer walks away
Mystery bidder for Kirkcaldie misses due diligence deadline
Kirkcaldie shares surge on property sale announcement
Kirkcaldie & Stains rejects offer for unprofitable retail business
Kirkcaldie mulls further property development
Kirkcaldie buyer yet to make firm offer
Interest sparked in ailing Kirkcaldie's retail business
Kirkcaldies cuts guidance by 15%