Guidance withdrawn at Ramsay Health, Aristocrat, Mirvac and REA Group
18 March 2020,
From hospitals to pokie machines, construction to online property listings, these are uncertain times for a wide range of businesses in Australia and worldwide.
The situation has led four ASX100 companies to withdraw their profit guidance this morning: Ramsay Health Care (ASX: RHC), Aristocrat Leisure (ASX: ALL), Mirvac Group (ASX: MGR) and REA Group (ASX: REA).
This adds to recent guidance withdrawals from Coca Cola Amatil (ASX: CCL), Cochlear (ASX: COH), oOh!media (ASX: OML), Qantas (ASX: QAN), Webjet (ASX: WEB), Helloworld (ASX: HLO), Flight Centre (ASX: FLT), Corporate Travel Management (ASX: CTD) and Apollo Tourism & Leisure (ASX: ATL).
Ramsay to help public health system
Ramsay Health Care, Australia's largest private hospital operator with facilities around the globe as well, faces "the unknown" in terms of the extent of Covid-19's impacts according to group managing director Craig McNally.
"The rapid spread of COVID-19 in Europe has resulted in decisions to defer surgery in some regions as governments seek extraordinary support from private operators such as Ramsay to deal with capacity requirements," says McNally.
"Specific details of the extent of this support including volume, case mix and reimbursement are still being finalised."
He notes the French government has cancelled all non-urgent surgery while Ramsay's hospitals are providing "much needed capacity and services" as required by the French Ministry of Health. In the United Kingdom, elective surgery has not been cancelled but Ramsay is in discussions with the country's National Health Service (NHS) to provide support.
McNally says in Australia it is still too early to determine the full impact of Covid-19.
"As the number of COVID-19 cases continues to escalate, we will see an impact on private volumes for the short term. However, in some cases, we are seeing decisions to fast-track elective surgery in order to minimise any future potential disruption," he says.
"As in other regions, Ramsay's Australian hospitals are also willing to assist the public health sector in each jurisdiction, to ease the surgical burden on the public health system, to undertake urgent and elective surgery, as well as provide capacity to cater for COVID-19 patients if required.
"Ramsay and our facilities right across the world are ready and willing to assist at this time of crisis. Our hospitals are well-prepared to manage the impacts of COVID-19."
The executive highlights strict infection control and prevention protocols to protect staff and healthcare workers.
"In addition to country-specific COVID-19 response teams, we have a global COVID-19 response team to keep up to date with the evolution of the outbreak and to continually monitor the impact on our business, our staff and supply chains.
"The Ramsay Wholly Owned Funding Group, which governs Ramsay's ability to borrow in its own right and which excludes Ramsay Santé's non-recourse debt, has headroom in its existing debt facilities the earliest of which is not due to expire till October 2022."
RHC also recently entered a JV for home hospital solutions.
Aristocrat falls back on digital diversity, Mirvac highlights strong balance sheet
As a producer of gaming machines, Aristocrat Leisure will likely be setback by punters avoiding public places like casinos, with the likes of Crown Resorts (ASX: CWN) and Star Entertainment (ASX: SGR) deactivating every second pokie machine to encourage distance between players.
Aristocrat believes its "outstanding fundamentals" continue to underpin its strategy and long-term confidence, while the company is also executing comprehensive risk management and mitigation plans.
The group is confident its diversity will see it through, with 40 per cent of revenue coming from digital games.
Aristocrat emphasises term loan facility is not due until October 2024 and is covenant lite, providing significant financial flexibility.
Developer Mirvac also highlights its debt position to ride out this tough period, as well as a robust balance sheet with $944 million in cash.
"As the effects of the COVID-19 outbreak impact Australia and our business, we are taking swift and prudent measures across the business, to not only protect our employees and stakeholders, but also provide transparency in what is an ever-changing environment," says CEO and managing director Susan Lloyd-Hurwitz.
"Our immediate priority remains the safety and wellbeing of our employees, customers and visitors to our Mirvac sites and the communities we serve."
REA Group to offer free re-listings
Online property listings company REA Group actually achieved new audience records on realestate.com.au in February with more than 93 million visits, as well as app launches of 38.4 million.
But given the exceptional circumstances with Covid-19 and the uncertainty of the economic environment, the company has determined it is not possible to predict the impact on residential listing volumes.
"As the spread of COVID-19 continues, we are focused on the health and safety of our people and local communities, while supporting our customers," says REA CEO Owen Wilson.
"In the spirit of true partnership we want to help our customers through these unprecedented conditions by introducing tangible measures.
"This will include the ability to re-list or re-upgrade listings for free, which will provide Australians greater confidence when selling their home."
He says the company will also delay the timing of contracted price changes in its residential business, which were previously due 1 July 2020."The duration of these measures to support our customers will continue to be assessed based on market conditions and the further developments with the coronavirus," says Wilson.
"REA is well equipped to operate in this challenging environment with best practice continuity measures in place.
"We have a very healthy balance sheet, low debt levels, and the capacity to increase debt facilities as necessary. We are in a strong position to successfully overcome these unprecedented times."
Updated 11.41am AEDT on 18 March 2020.