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Helloworld manages crash landing after weathering the "perfect storm"

Helloworld manages crash landing after weathering the "perfect storm"

Travel booking company Helloworld (ASX: HLO) has reported a $69.9 million loss for a year it described as a "perfect storm", just like competitors such as Flight Centre, Corporate Travel Management and WebJet.

During FY20 Helloworld's bottom line dropped by more than $100 million as international and even some interstate travel took a hit.

Booking activity is starting to pick up although total transaction volume (TTV) is just 30 per cent of last year's levels in July 2020.

The bulk of the loss stemmed from non-cash impairment charges of $67.1 million, mostly due to COVID-19 impacts.

The lion's share of the impairment, at $51.8 million, relates to Helloworld's wholesale and inbound business which is heavily reliant on an almost paralysed international travel sector.

In addition, around $14 million of the impairment loss relates to the recently acquired TravelEdge Group. In light of COVID-19 that segment's near-term cash flows are ecxpected to be below what was assumed at the time of acquisition as 30 per cent of the group's TTV was historically derived from international travel. 

Before tax the company managed to record a $17.1 million profit, while revenues fell by $75 million in FY20 to $282.1 million.

"This has been the most challenging period in our company's history, and we are working, like every other business around the world, to manage the responses to this crisis so we can be there when the world starts to emerge from COVID-19 and starts travelling again," says Helloworld CEO and managing director Andrew Burnes (pictured).

"I believe that travel experiences will be even more treasured when this has ended. People will not hesitate to go and see the things they have always wanted to do in the newfound knowledge that circumstances can change very rapidly.

Tightening the belt, securing cash

To mitigate COVID-19 impacts the company reduced monthly net operating cash outflows to around $2 million, excluding one-off costs, from April 2020 onwards.

In addition, Helloworld completed a $50 million equity raising in July and August to improve its liquidity.

The signs of recovery seen in July 2020 are expected to improve further from October as Australian state borders reopen.

"This together with other call centre related activity has provided the company with some revenue generation during the COVID-19 period so far," says Helloworld.

To date, the company has paid out full or partial refunds from its corporate, wholesale and ticketing businesses of more than $800 million in Australia and New Zealand.

Helloworld has been receiving JobKeeper wage subsidies during the pandemic period which will continue to at least March 2021. Between July and March, under current JobKeeper levels, the company expects to receive a net benefit of approximately $20 million in additional subsidies for retained employees.

Because of continued uncertainty, fuelled by COVID-19, Helloworld is unable to provide any guidance for FY21 at this point in time.

"Travel relies on the ability of people to move without undue restriction and that is not the case at present in Australia or New Zealand, where citizens are not even allowed to leave their countries except on the most compassionate of grounds," says Helloworld.

"With overheads at around $4 million to $5 million per month.strong liquidity and a significantly lower cost base across our key business operations, we are confident we can continue to adapt the business to the circumstances that confront us, ride out this "perfect storm" and take advantage of opportunities as they arise and emerge from this crisis in a very strong position."

Updated at 9:47am AEST on 1 September 2020.

EVENT reeling from cinema closures with $11.4m loss

EVENT reeling from cinema closures with $11.4m loss

With the best box office performance in three years across its Australian and New Zealand cinemas, as well as high occupancy rates in its resorts, EVENT Hospitality and Entertainment (ASX: EVT) was on track for a good result before COVID-19 crept up on the world.

That's even despite closures at its Thredbo Alpine Resort due to bushfires, with the eight months to February representing the second-highest EBITDA for the period in the company's history.

But like so many companies this reporting season, EVENT's results are an ugly before and after juxtaposition of fortunes.

The Sydney-headquartered group has reported its normalised EBITDA fell in half in FY20 to $105 million, while revenue fell 22 per cent to $784 million.

A massive $56.9 million in impairment charges - in addition to almost $13 million in asset write-offs, redundancies and restructuring costs - led to a statutory loss of $11.4 million, compared to an NPAT of $111.9 million in FY19.

"The year was impacted by the most unprecedented external factors experienced in the Group's 110-year history, including bushfires, floods and COVID-19 government-mandated restrictions," says EVENT's CEO Jane Hastings.

"The final four months of the year was defined by the impact of COVID-19 government mandated restrictions which immediately impacted revenue, down $262 million for the four month period.

"We immediately adapted with new operating models by division, reflecting the various government COVID-19 restrictions and plan for potential financial scenarios.2

Hastings says this planning allowed the group to pivot at short-notice and achieve $140 million in cost reduction including government subsidies, excluding the benefit of negotiated rent relief which will be recognised once agreements have been signed.

"We are well prepared and some of the changes are expected to deliver lasting benefits for the future," she says.

"We believe that our businesses will rebound relatively quickly once restrictions are lifted due to pent-up demand and we have already seen green shoots, when this has occurred, across the Group."

Last month the company announced an increase in its debt facilities to $750 million, of which the majority matures in in 2023.

"Our current net debt is approximately $450 million and we have a strong balance sheet, underpinned by a solid property portfolio with a fair value of $2 billion at the most recent valuation dates," she says.

"Successful completion of the refinancing process in July, our strong balance sheet, and the swift response to COVID-19 positions the Group well to navigate through this challenging period and improve earnings as restrictions ease," adds chairman Alan Rydge.

In March EVENT confirmed its German cinema business Cinestar to Vue International Bidco for $305 million had received conditional approval from Germany's competiton regulator, subject to the divestment of six sites of which one was successfully sold in August.

Updated at 4:45pm AEST on 31 August 2020.

Apollo stalls on COVID-19 shutdowns, posts loss greater than market cap

Apollo stalls on COVID-19 shutdowns, posts loss greater than market cap

There are unlikely to be too many happy campers on the board of Apollo Tourism & Leisure (ASX: ATL) today after the company announced a $61.2 million loss, with global demand for RV rentals heavily impacted by travel restrictions.

To put the magnitude of this loss into perspective, it is 15 per cent higher than the market value of the company itself. 

The result compares to what was a "disappointing" $4.7 million profit in FY19. Leading up to COVID-19 the Brisbane-based company had recorded an $11.3 million profit for the first half despite the negative effects of bushfires.

When the first half result was announced - almost a month before the coronavirus was declared a pandemic - Apollo indicated a loss would be likely in H2 due to the double whammy of the virus and bushfires, but it still expected a full-year profit in the range of $8-9 million.

That horse had bolted by the time 12 March came around as Apollo withdrew its guidance, raising alarms over cancellations and border closures between the US and Europe.

By the time of Apollo's next announcement four days later, travel restrictions had escalated around the globe with its key markets of the US, Australia, New Zealand and France effectively shut down.

By mid-May the group had made the tough decision to sell its US fleet, which led to the booking of a $12.5 million loss on the transaction.

In today's result, Apollo has announced a non-cash impairment expense of the same size ($12.5 million) due to the impacts of COVID-19 in Europe, while the impairment was even greater in Australia at $23 million.

Apollo's loss in Australia accounted for around 63 per cent of the loss overall, but a pivot to the domestic market has sparked strong growth for the segment which previously only accounted for around a fifth of Australian sales.

Overall, bookings and revenues are nonetheless significantly below prior year levels even though there has been a recovery since May. 

Despite a significant drop in retail sales in April 2020 due to COVID-19 restrictions, the first full year of Apollo's Geelong, Newcastle and relocated Melbourne dealerships contributed to overall increased retail vehicle sales for the year.

New Zealand was the only market that did not run at a loss with an EBIT of $6.2 million. This result across the Tasman was still down on the previous year, even though retail sales were up 35.4 per cent.

The group's sales in New Zealand achieved a new monthly record in July, even though winter months tend to be the slowest periods for the market. But the recent Auckland lockdown is expected to have a negative impact on August and potentially future months.

The company has also received $3.3 million in wage assistance, while in FY21 it has also received a $15 million export loan from the Federal Government and a $10 million industry support package loan from the Queensland Government.

In its outlook statement today, Apollo said it expected it guest mixes in Australia, New Zealand and Canada would shift to a majority of domestic guests for FY21, with some international travellers in the second half of this financial year.

While still a relatively small region for Apollo, Europe and the United Kingdom markets are primarily in-market guests and therefore activity is expected to be impacted less than other regions.

"As domestic travel re-emerges, followed by international travel in time, Apollo is ideally placed to service guests looking for "COVID-19 safe" ways to explore the great outdoors with family and friends," says Apollo's managing director and CEO Luke Trouchet.

"We expect the recent increase in retail RV sales to continue as people seek more freedom and control over their holiday choices.

"With limited options for consumer travel related discretionary spend, and many people finding themselves with more spare time than previously, a RV holiday is becoming an increasingly attractive option."

Updated at 12:30pm AEST on 31 August 2020.

Owner of Noni B and Millers strikes deal to reopen its Westfield stores

Owner of Noni B and Millers strikes deal to reopen its Westfield stores

Mosaic Brands (ASX: MOZ) has struck a deal with major landlord Scentre Group (ASX: SCG) to reopen its stores in Westfield shopping centres outside Victoria, but the fashion retailer will still press ahead with plans to permanently close 300-500 shopfronts.

The breakthrough follows an announcement on 20 August whereby Scentre temporarily locked Mosaic out of 129 stores in Westfield shopping centres due to an impasse in negotiations. 

In charge of such brands as Rockmans, Katies, Millers, Rivers, Autograph, Crossroads, Noni B and W.Lane, Mosaic Brands CEO Scott Evans recently said the group wanted to minimise closures but "not on uncommercial terms".

Evans said the retail rental market had not just paused due to COVID-19 but had "fundamentally changed".

Today the group confirmed the terms of its agreement with Scentre was confidential, but the successful negotiations mean all non-Victorian stores in Westfield shopping centres have now reopened.

"This is a good outcome for Mosaic and, in particular, the 400 affected team members. As we noted last week, shuttered stores work for no one," says Mosaic chairman Richard Facioni.

"We're pleased to have reopened our Westfield stores over the weekend following a mutually agreeable outcome to our negotiations with Scentre Group.

"We have had a long-standing relationship with Westfield enabling us to reach a solution that worked for both parties."

Victorian stores remain closed due to Stage 3 and 4 restrictions in the state.

"Our Victorian stores remain temporarily closed for health and safety reasons. We look forward to reopening those stores as soon as it is safe for our team and customers to do so."

Mosaic noted it would continue to negotiate with landlords nationally to achieve commercially sound lease terms consistent with the fundamental shift it sees in the market. It continues to anticipate shutting down 300-500 stores over the coming 12-24 months.

Updated at 10:25am AEST on 31 August 2020.

Schoolies cancelled and new restrictions as Gold Coast records two new COVID-19 cases

Schoolies cancelled and new restrictions as Gold Coast records two new COVID-19 cases

The COVID-19 cluster at the Queensland Corrective Services Academy has grown to four confirmed infections after another three people tested positive overnight.

Because two of the three new cases are people based on the Gold Coast, the state government has implemented new restrictions for the city.

For Gold Coast residents, this means that no more than 10 people can gather inside a house or outdoors, and aged care facilities will be locked down.

The third case was detected in a person from Forest Lake.

As such, the State Government has made the tough decision to cancel the annual Schoolies festival - traditionally a rite of passage for school leavers in Queensland.

Chief health officer Dr Jeannette Young has designated mass gatherings of young people over multiple days 'high risk'.

"This is not something that is unique to Queensland," Dr Young said.

"I feel terribly for this year's school leavers who have already been through so much.

"But that is the reality of keeping every family safe from this horrible disease."

Premier Annastacia Palaszczuk said school-leavers should still celebrate their achievements and take advantage of being able to travel throughout the state.

"Schoolies Week doesn't have to be just one week," the Premier said.

"We are Good to Go across Queensland to some of the most beautiful places in the world right here in our own backyard."

Accommodation providers will be required to register guests as part of their COVID-safe plans.

The three new cases brings the total number of active cases in Queensland to 20.

Updated at 9:52am AEST on 28 August 2020.

Theme park closures sees Dreamworld operator post $137m loss

Theme park closures sees Dreamworld operator post $137m loss

The enforced closures of Ardent Leisure's (ASX: ALG) theme parks in Australia and entertainment centres in the US due to COVID-19 restrictions resulted in the company's loss ballooning to $136.6 million in FY20.

Total reported revenue for the Dreamworld operator decreased by $85 million to $398.3 million in the full year, also due to COVID-19 restrictions on trade.

The results capped off another rough year for Ardent Leisure which was witnessing revenue growth of 5 per cent for the 35 weeks up to the end of February 2020, before the pandemic hit Australia and the US.

However, from March onward, the company only brought in $68.2 million of earnings, compared to $362.3 million generated pre-pandemic.

Ardent Leisure also suffered from an impairment charge of $15.4 million on property, plant and equipment in its theme parks division, and a charge of $2 million relating to the its Main Event business.

The company's chairman Dr Gary Weiss did not play down the disappointing FY20 results.

"The emergence of COVID-19 in the second half of the financial year has had a significant impact on our business," says Weiss.

"Following the restrictions put in place by government and health authorities, we made the difficult decision to close our Main Event centres in the United States and Theme Park businesses in Australia from mid-late March.

"While positive progress had been achieved by Main Event and Theme Parks in the first eight months of the year, our focus turned to capital management and securing capital for the business as the COVID-19 pandemic escalated."

The group's theme parks division, which includes Dreamworld, Whitewater World and Sky Point, reported trading revenue of $54.5 million for the year, down 18.8 per cent.

The division also reported an EBITDA loss of $24 million, compared to an EBITDA loss of $19.8 million in the prior year, largely because of COVID-19 impacts and the associated impairment charge.

In addition, the group's US cinema arm, Main Event, saw revenue decrease by 17.4 per cent.

Main Event has progressively reopened its facilities in May and June, with 38 centres reopened as at 30 June 2020.

Despite the uncertainty, Weiss is optimistic about Ardent Leisure's FY21, particularly because of the government support the theme parks division has received from the Queensland Government ahead of Dreamworld's reopening in September.

"We anticipate uncertain and challenging conditions to continue in FY21, however we believe that the demand for out-of-home family entertainment experiences will be stronger than ever once the pandemic has subsided and restrictions have eased," says Weiss.

"Our guests and team members can be confident we have implemented the highest levels of cleaning and safety standards across out business."

Shares in Ardent Leisure group are down 3.30 per cent to $0.44 per share at 3:54pm AEST.

Updated at 4:21pm AEST on 27 August 2020.

COVID-19 impacts dull Lovisa's profits

COVID-19 impacts dull Lovisa's profits

The standing down of staff, store closures and supply chain disruptions had a significant impact on jewellery retailer Lovisa's (ASX: LOV) full year profits.

The COVID-19 pandemic took the shine off Lovisa's profit after tax this financial year, down 69.7 per cent to $11.2 million.

However, a focus on digital during the fourth quarter led to the company growing online sales by 311 per cent in FY20, with growth of 382 per cent in Q4 and that trend continuing since the end of the financial year.

Overall, the company's revenue dipped moderately to $242.1 million, down 3.2 per cent from FY19.

"We are pleased with what our team has been able to achieve through the disruptions to our business over the past six months, and whilst it has had a temporary impact to sales and profitability we remain confident in our growth objectives and have been able to maintain the balance sheet strength required to deliver on them," says Lovisa managing director Shane Fallscheer.

"This leaves us very well placed for the future."

Before the COVID-19 pandemic hit the global economy, Lovisa was witnessing total sales increasing by 22.2 per cent.

It was in Q3 that the impacts of COVID-19 were felt by the jeweller, initially in its Asian markets, as economic activity slowed in response to events in China, and then escalating to full store closures globally by the end of March.

The second half was particularly hit by disruption to the company's supply chain, first with factory and warehouse closures in China and followed by freight disruption.

To this day Lovisa says it is still experiencing bottlenecks in freight deliveries, albeit to a lesser degree.

At the end of the financial year Lovisa was trading from 435 stores, with performance strongest in the Australia and New Zealand markets which were able to reopen earlier than its stores in the UK.

During the period Lovisa decided to exit the Spanish market, which it attributes to poor support from landlords through the lockdown period, resulting in nine store closures.

As a result, Lovisa's results were impacted by a $3.4 million impairment charge recognised in relation to this exit.

Additional impairment charges were taken across a "small number" of other stores in its global network, taking the total impairment recognised in FY20 to $4.5 million.

Lovisa says it bounced back in the fourth quarter, with cash flow returning to strong levels, and cash from operations before interest and tax of $51.7 million.

For the first eight weeks of FY21 Lovisa says it is still suffering from challenging trading conditions, with comparable store sales down 19 per cent. This is still an improvement on the fourth quarter of FY20 when sales were down by 32.5 per cent.

Lovisa still has 30 stores in Melbourne, 19 stores in California, two stores in New York and eight stores in New Zealand closed temporarily due to COVID-19 government lockdowns.

"Our strategic plan remains in place, we are ready to continue our store roll out and we continue discussions with our landlords globally as we believe current circumstances will create further opportunities," says Lovisa.

"Our balance sheet remains strong, with a continued net cash position above $20 million and undrawn cash debt facilities supporting investment in growth."

Shares in LOV are down 5.72 per cent to $7.09 per share at 10:19am AEST.

Updated at 10:40am AEST on 26 August 2020.

Public health alerts issued for Apple and Kmart at Broadway Sydney

Public health alerts issued for Apple and Kmart at Broadway Sydney

A number of public health alerts have been issued in Sydney overnight, including at the Broadway shopping centre and the City Tattersalls Fitness Centre on Pitt Street.

According to NSW Health, a confirmed COVID-19 case visited the Apple and Kmart stores on 22 August between 3:30pm and 5pm.

Further, two cases of COVID-19 attended the Tattersalls Fitness Centre on August 19, 21 and 23.

Anyone who attended any of these venues or stores on any of these dates should monitor for symptoms and get tested if any appear.

Apple and Kmart are currently undertaking deep cleaning and working with NSW Health.

In addition, NSW Health has alerted people who may have been to 300 George Street, Sydney on August 19, 20, 21, or 24 to monitor for COVID-19 symptoms after one of the cases worked in the building while infectious.

In a statement posted to Facebook, Broadway Sydney has told customers to "not be alarmed".

"Based on current Health advice, customers in our wider community who may have visited other retailers in the centre, or visited at other times should not be alarmed. The centre and all other retailers will remain open," says Broadway Sydney.

"The Centre underwent a full centre clean Saturday evening, as it does each night as part of our regular cleaning regime.

"We continue to co-operate with NSW Health and will keep all our customers and retailers informed and provide you with more information as we receive updates."

NSW reported three new cases of COVID-19 yesterday, bringing the state's cumulative total since the pandemic began to 3,991.

Updated at 9:28am AEST on 26 August 2020.

Servcorp profit up despite "severe" impact on coworking

Servcorp profit up despite "severe" impact on coworking

Serviced offices provider Servcorp (ASX: SRV) has seen occupancy levels decline by four percentage points and had to close 29 floors globally due to COVID-19, but the Sydney-based company is optimistic for the year ahead.

After announcing a 28.9 per cent increase in net profit after tax (NPAT) in FY20 to $6.9 million, of which more than $1 million came from JobKeeper, Servcorp expects to remain profitable "even at a low case" in the current financial year.

SRV shares rose 8.8 per cent today to $2.34 each, buoyed by a dividend of 8.7 cents per share and projections more could be in store if the underlying business continues to generate free cash.

The company's revenue rose by 4.6 per cent to $352.9 million, with performance in markets like the Middle East and North Asia - except for a drag on profit in China - pushing sales higher.

"We are still of the view that coworking is an important part of not only our offering but the industry too, and that our investment in reshaping our portfolio for coworking will realise a return on investment in the longer term.

The group opened three new floors in FY20 and expanded two floors, but the pandemic forced the closure of 12 US locations, five in North Asia including four in China and seven in the Australia-NZ-South East Asia segment.

"In the 2020 financial year, net capacity decreased by 749 offices, including 271 in the USA. During the year three floors were opened and 29 floors were closed, including 12 floors closed as part of the restructure in the USA in June 2020," the company said.

"During the 2020 financial year we opened new locations at Madison Avenue in New York and One Museum Place in Shanghai. In addition, two floors were expanded in Hobart and Brisbane locations."

The USA continues to be a thorn in Servcorp's side as the only region that recorded a like-for-like loss in FY20, which deepened by 77 per cent on FY19 to $6.9 million. 

Overall, the restructuring and closure of floors meant the USA operations recorded an even larger deconsolidation loss of $14.3 million for the period.

Servcorp also replaced its USA general manager in April with Colleen Susini, who is based in New York and has extensive flexible workspace industry experience, including with Regus. 

The group explains recent growth in the flexible workspace industry has been underpinned by the expansion of coworking spaces, but the COVID-19 has had a significant impact on these arrangements.

"There has been a severe impact to coworking and we expect the recovery to take significantly longer than our serviced and virtual office offerings," Servcorp says.

"Given the nature of coworking, and its inherent lack of social distancing, it is expected to take significantly longer to recover from COVID-19."

Updated at 3:57pm AEST on 25 August 2020.

SA to reinstate buffer zone with Victoria, NSW border relaxation considered

SA to reinstate buffer zone with Victoria, NSW border relaxation considered

South Australia will reimplement a COVID-19 buffer zone along its border with Victoria, and NSW residents may soon be able to come into SA without restrictions. 

As of midnight on Thursday evening a 40-kilometre buffer zone on either side of the border will come back into effect, which Premier Steven Marshall (pictured) says will make things easier for those living in border towns.

"We are extraordinarily grateful for [South Australians] adherence to the tough restrictions that we've had in place, and that has put us in a very good situation," says Marshall, following the latest decision from the state's Transition Committee.

"So as of Friday, school students will be able to return to school in South Australia, and businesses will be able to resume exactly and precisely as the were."

The easing of the state's hard border with Victoria, initially instated on 8 July, will only go ahead if there is no evidence of community transmission of COVID-19 in the western part of Victoria between today and midnight on Thursday evening.

"The information that's been provided to us by the Victorian authorities has given the Transition Committee the confidence to put that 40 kilometre buffer either side of the border back in place for this coming Friday."

In addition, Marshall says state health authorities are keeping a close eye on the COVID-19 situation in NSW and the ACT, which may mean residents from those jurisdictions could come to SA without a period of self-isolation within a matter of weeks.

"We are not announcing today that that border will be removed, but what we are saying is that we're looking very closely at this," says Marshall.

"If we continue to see very low levels like we've been seeing, it's quite possible that we'll remove that requirement for 14 days of self-isolation within the next two weeks."

In addition, Marshall announced today that the restrictions on household gatherings will be eased from Friday, with homes now able to accommodate 50 people at once, up from a strict 10 person limit.

Finally, SA will now allow travellers from jurisdictions the state has an open border relationship with to transit through airports in NSW and Canberra without having to do 14 days of isolation.

These states include Tasmania, Western Australia, the Northern Territory and Queensland.

South Australia did not record any new cases of COVID-19 today, but it's eastern neighbour Victoria confirmed 148 new infections of the coronavirus this morning and eight new deaths.

There were no new cases in Queensland, the Northern Territory or the ACT, but there were three new cases of COVID-19 in NSW.

Updated at 2:05pm AEST on 25 August 2020.

Qantas puts another 2,500 jobs on the chopping block

Qantas puts another 2,500 jobs on the chopping block

Thousands of Qantas Group (ASX: QAN) ground operations staff face an uncertain future after the airline announced a review to outsource their jobs and save $100 million.

The latest cost-cutting measure could potentially impact 2,500 baggage handler, aircraft cleaning and ground transport jobs for the airline and its subsidiary Jetstar, on top of the 6,000 redundancies already announced in June.

In an announcement today the company said the COVID-19 crisis had forced management to examine whether these services could be delivered more efficiently. 

Some Qantas management roles could also be in the firing line, but customer-facing team members at airports are not under the scope of the reviews.

Staff and unions have been informed of the decision, with the review set to be undertaken over the coming months.

Qantas Domestic CEO Andrew David, who will soon lead on the airline's international business as well after the departure of its CEO Tino La Spina, emphasises airlines have to change how they operate to ensure they can survive long-term.

"We've already taken drastic action, with more than 220 aircraft grounded, the vast majority of our workforce stood down and assets mortgaged to raise cash," says David.

"Right now, our domestic capacity is at 20 per cent of pre-COVID levels and international travel is expected to take years to recover.

"We know travel restrictions will lift eventually, but the market will be very different. Every airline will come through this much leaner and more efficient, and we have to be able to compete if we're going to survive."

David estimates outsourcing work to specialist ground handlers would save an estimated $100 million in operating costs each year. 

To help it get through this period as one of Australia's most heavily impacted companies from the pandemic, Qantas received $267 million in JobKeeper payments from the Federal Government to support its staff by 30 June.

This was part of a total gross benefit from government support of $515 million, but the net benefit of government payments after the costs of operating flights was $15 million.

"Today's announcement will be very tough for our hard-working teams, most of whom have already been stood down for months without work," says David.

"This obviously adds to the uncertainty but this is the unfortunate reality of what COVID-19 has done to our industry."

David's sentiments were echoed by Jetstar Group CEO Gareth Evans.

"We realise this decision will be extremely difficult news for our ground handling team and their families at what is already a very challenging time," he says.

"But unfortunately this ongoing crisis means we have to make some really tough decisions which impact our team members who have provided a consistent and professional operation over many years.

"Every major airline around the world uses these specialist providers to support their operations. These ground handlers provide these services to many airlines at airports, rather than just one, and provide scalable resources, which makes them very cost effective."

He says contracting this work out also reduces the capital spend required each year.

"As an example, Qantas and Jetstar would need to invest a further $100 million on ground handling equipment over the next five years, such as tugs and bag loaders, if the work is kept inhouse," he says.

"The Qantas Group sets the safety standards through our safety management system whether work is done in house or external suppliers. We expect some unions will come out and say these suppliers are unsafe, despite the fact they are used by every other airline in this country.

"We would never compromise on safety. We've already worked with some of these suppliers for decades and we know their track record on safety is consistent with work done in house."

The changes are proposed for Qantas staff at airports in Adelaide, Alice Springs, Brisbane, Cairns, Canberra, Darwin, Melbourne, Perth, Sydney and Townsville, as well as Jetstar staff in Adelaide, Avalon, Brisbane, Cairns, Melbourne and Sydney Domestic.

Qantas will also look to outsource its bus services for customers and employees in and around Sydney Airport, as part of a similar but separate review.

Qantas Group says affected employees will be provided a redundancy package and be provided with support to transition to new jobs outside the business.

On its Ground Operations careers page, Qantas reports it has 7,000 people currently working in its airport terminals around Australia.

Updated at 2:14pm AEST on 25 August 2020.

Pandemic slams Scentre with $3.6 billion loss

Pandemic slams Scentre with $3.6 billion loss

The operator of Westfield shopping centres in Australia has seen the value of its properties dive by around $4 billion in the first six months of 2020, leading to a loss of $3.6 billion.

The devaluation was the main driver of Scentre Group's (ASX: SCG) fall from a 2019 first half profit of $740 million, with much of the rest explained by a credit charge of $232.1 million, mostly comprising the costs of rental assistance agreements.

The half was tinged by the effects of government imposed COVID-19 restrictions on retailers, which have been gradually eased in most of the country except for Victoria, forcing many to close for long periods of time.

This resulted in Scentre signing rental assistance agreements with more than two thirds of its retail partners in the half, including 1,624 SME retailers; a segment that normally contributes 30 per cent to its retail income.

Under the SME code of conduct, SMEs were able to reduce the amount of cash rent payable commensurate with the decline in sales they may have experienced during the pandemic and post-pandemic recovery period.

"We acknowledge this has been a difficult time for our customers and our retail partners. We have supported our retail partners throughout this period on a case-by-case basis. We have done this without receiving financial assistance from the government," says Scentre Group CEO Peter Allen.

"The shopping centre industry has provided over $1.6 billion of support for retailers during the pandemic. Our industry is unique in that it has provided, and self-funded, a level of financial support beyond any other industry as well as most government pandemic support packages."

"Importantly, the structure of our leases with our retail partners has not changed and remains based on the mutual agreement to pay a fixed rent."

For the six-month period to the end of June 2020 Scentre collected 70 per cent of gross rental billings, and for the months of June and July 2020 gross rental billing collections were over 80 per cent.

Retailers in Westfield centres were impacted by restrictions on store openings and the movement of people. As such, in-store sales for the retailers that traded throughout the first half were 8.1 per cent lower compared to the previous corresponding period.

Further, specialty in-store sales were 12.1 per cent lower compared to the first six months of 2019.

"I am very proud of our team, particularly how we responded and adapted to the significant challenges brought about by the COVID-19 pandemic," says Allen.

"We remained focussed on providing our customers with the ability to continually meet their needs throughout the period. We did this by remaining open as well as implementing, and communicating, the highest standards of health and safety protocols."

So far this year Scentre raised or extended $5.8 billion of additional funding, including $3.4 billion of bank facilities and $2.4 billion of long-term bonds.

The company currently has available liquidity of $4.4 billion, which it says is enough to cover all maturities to January 2023.

"At the onset of the pandemic we acted quickly to secure additional funding, ensuring we are in a strong financial position to see the group through and beyond the volatile period," says Allen.

Even with restrictions in place, Scentre says more than 93 per cent of retail stores were open across the Westfield centres (excluding Victoria), and its portfolio occupancy was 98.8 per cent at the end of June 2020.

All of the 42 Westfield centres remained open and trading during the pandemic.

Updated at 9:52am AEST on 25 August 2020.

Super Retail Group thrives online as Australians embrace domestic travel

Super Retail Group thrives online as Australians embrace domestic travel

Super Retail Group's (ASX: SUL) omni-channel retail model enabled the company to ride out the worst of the initial COVID-19 market shock as online sales rose by 44.4 per cent in FY20.

However the company's net profit after tax was down by approximately 21 per cent in the financial year to $110.2 million.

The retailer is the parent of major brands including Supercheap Auto, outdoor and leisure retailers Macpac and BCF, as well as sporting retailer Rebel Sport.

As such, SUL says it benefited from "pent-up" demand for domestic travel, leisure and outdoor activities as many Australians emerged from COVID-19 lockdowns, eager to get outside.

This resulted in the company's fourth quarter sales in May and June rebounding by 27.2 per cent.

That positive momentum continued across all four brands in the first seven weeks of FY21, with sales growth of 32 per cent.

Group online sales increased by 44.4 per cent to $290 million, representing 10 per cent of total sales.

SUL's managing director and CEO Anthony Heraghty says the company's omni-channel approach and its response to the initial impact of COVID-19, including reallocating resources to its online businesses, enabled it to thrive in the last six months of FY20.

"The group's omni-channel retail strategy has enabled our business to adapt quickly to changing consumer behaviour during COVID-19 and delivered a strong trading performance," says Heraghty.

"Keeping stores open for our customers while successfully pivoting to meet increased demand in our online sales channels has enabled the Group to profitably navigate an extremely challenging period for retail and deliver 44 per cent annual online sales growth.

"We are well positioned to benefit from consumer trends emerging from the pandemic, including the channel shift to online, uptake in DIY auto repairs and household projects, increased focus on personal health and wellbeing, and greater demand for domestic travel and outdoor leisure activities."

During FY20 more than one million customers made their first online purchase with SUL.

Heraghty says ongoing investment in SUL's omni-channel capability is positioning the group well.

"This investment has supported 66 per cent CAGR in group online sales over the past four years," says Heraghty.

"During this period, the group's active membership base of 6.6 million has grown almost five-times faster than store numbers.

"Scalable growth is critical to our success and our ability to expand the group's customer base multiple times faster than our physical store network reinforces our conviction in an omni-retail strategy."

In the first seven weeks of FY21, SUL has witnessed "extremely robust" sales growth of 32 per cent, driven by an uptake of domestic tourism, exercise and fitness, and outdoor leisure activities.

Sales growth for the beginning of the new financial year was particularly pronounced at BCF, which has seen 72 per cent growth.

SUL says while the economic outlook is uncertain for the remainder of FY21, it expects capital expenditure to be approximately $90 million.

The company's board has declared a fully franked dividend of 19.5 cents per share, representing a payout ratio of 55 per cent of second half underlying NPAT.

Updated at 12:48pm AEST on 24 August 2020.

Reliance rises as US sales rebound

Reliance rises as US sales rebound

Plumbing supplies company Reliance Worldwide (ASX: RWC) is bouncing back after a slow FY20, with US sales up 22 per cent in July.

The company's optimism for the future follows a soft financial year, during which RWC reported net profit after tax of $89.4 million, down 33 per cent.

RWC's results were largely impacted by COVID-19, with just 5 per cent growth in reported net sales during the year after the company's UK and European sales dived.

However, the company performed well in the US, with 11 per cent second half sales growth, and 6 per cent growth for the year overall.

Despite a slowdown in Australian new residential construction during the initial COVID-19 market disruption, the company's Asia Pacific sales were up 2 per cent.

"Our performance this year has been impacted by what occurred in the second half with COVID-19, with sales trends varying by region reflecting the differing market responses to the pandemic," says RWC CEO Heath Sharp.

"In contrast to the US, sales in EMEA (Europe, the Middle East and Africa) were down 20 per cent in the second half as UK and Continental Europe curtailed business activity in response to COVID-19.

"We significantly reduced manufacturing and distribution activity in the UK and Europe for a period, including placing over 400 employees on furlough."

The impacts of COVID-19 appear to be wearing off for RWC, with sales in the US 22 per cent higher in July than for the same month last year.

As a result, shareholders have responded positively, sending the company's shares up by 21.6 per cent at 10:15am AEST.

In APAC, external sales in July are slightly ahead year on year, and EMEA sales in July were 96 per cent of the same month in 2019.

RWC also generated $217.9 million in earnings in FY20, impacted by restructuring and impairment charges of $33.4 million.

The plumbing supplies group today declared total dividends for FY20 of 7 cent per share, despite RWC receiving wage subsidies of $4.1 million across EMEA, $300,000 in New Zealand and $200,000 in Canada.

Due to ongoing uncertainty surrounding market demand and potential impacts of further COVID-19 outbreaks RWC will not provide earnings guidance for FY21.

Updated at 11:51am AEST on 24 August 2020.

Qantas lets go of international CEO Tino La Spina

Qantas lets go of international CEO Tino La Spina

With overseas flights unlikely to be reactivated until FY22 except for New Zealand, Qantas Group (ASX: QAN) has today announced the departure of the boss in charge of its international business.

Tino La Spina will leave the company on 1 September following 14 years of service, having previously held the position of CFO before taking on the international CEO role in May last year after Alison Webster resigned.

The nation's most iconic airline has made 6,000 staff redundant in response to COVID-19 and associated travel restrictions, as well as the grounding of its fleet as part of a $15 billion cost saving strategy.

Today's announcement may increase that figure by a few million dollars. La Spina's responsibilities will be transferred to the group's domestic CEO Andrew David, who also handles Qantas Freight.

"The COVID crisis is forcing us to rethink our business at every level. It's increasingly clear that our international flights will be grounded until at least mid-2021 and it will take years for activity to return to what it was before," says group CEO Alan Joyce.

"Under those circumstances, we've made the decision to consolidate the domestic and international business units under a single divisional CEO.

"Tino has done a superb job throughout his 14 years at Qantas. He's a talented executive who brings his trademark enthusiasm to every challenge. I know I speak for the rest of the executive team and for the Board in thanking him sincerely for the huge contribution he has made, particularly as Deputy CFO and then CFO for most of that time."

Investors appear to have responded negatively to the news, with QAN shares down 4.36 per cent at $3.73 at 11:30am AEST. 

Updated at 11:31am AEST on 24 August.

Health warning issued for Indooroopilly Shopping Centre, Brisbane youth detention cluster grows

Health warning issued for Indooroopilly Shopping Centre, Brisbane youth detention cluster grows

Queensland Health has implemented urgent protection measures over the weekend after nine more people linked to the Brisbane youth detention centre cluster tested positive for COVID-19.

As such, a number of public health warnings have been issued, including for the Indooroopilly Shopping Centre, Ikea (Slacks Creek), Westfield Carindale, and the Ipswich Hospital.

There are now 10 confirmed COVID-19 cases linked to the youth detention centre cluster, including one new case confirmed this morning.

Queensland currently has 18 active cases of COVID-19 after the state confirmed 11 new infections of the coronavirus over the weekend.

Chief Health Officer Dr Jeannette Young implemented new restrictions on aged care and other heath care facilities and hospitals across Greater Brisbane, and Ipswich and surrounds on Saturday.

The measures put in place on the weekend across the West Moreton, Metro North and Metro South Hospital and other health services include:

  • Residential aged care and disability accommodation services were placed into effective lockdown with visitors being restricted,
  • Public and private emergency departments were instructed to use PPE to treat all patients,
  • Public and private hospitals were also asked to restrict visitors as soon as possible.

Further, gatherings in homes and in public have been restricted to 10 people in the following local government areas: City of Brisbane, City of Ipswich, Logan City, Scenic Rim Region, Somerset Region, Lockyer Valley Region, Moreton Bay Region, Redlands City.

"This is a very significant issue and we need people to take it seriously," Dr Young said.

"Visits to aged and other care facilities in those areas need to again be postponed.

"Movement of staff between facilities needs to be reduced as much as reasonably possible."

The complete list of venues where cases linked to the Brisbane youth detention centre cluster visited now includes:

Forest Lake

  • 9 August 2020, IGA Express, Forest Lake, ~6.30am-~6.40am
  • 10 August 2020, Coles, Forest Lake Shopping Centre, Forest Lake, ~10.00am ~10.15am
  • 10 August 2020, Woolworths, Forest Lake Shopping centre, Forest Lake, unknown times
  • 12 August 2020, Lakeside Fruit Barn, Forest Lake Shopping Centre, Forest Lake, 4pm-~4.30pm
  • 12 August 2020, Woolworths, Forest Lake Shopping centre, Forest Lake, ~4:30pm-~5pm
  • 13 August 2020, Australian Nails, Forest lake Shopping Centre, Forest Lake, 11am-~12am
  • 13 August 2020, Forest lake Shopping Centre, Forest Lake, 11am-3pm
  • 13 August 2020, Fig Tree Bakehouse, Forest Lake Shopping Centre, Forest Lake, 12pm-unknown
  • 13 August 2020, Nandos, Forest Lake Shopping Centre, Forest Lake, after 12pm-unknown
  • 14 August 2020, Aldi, Forest Lake Village Shopping Centre, Forest Lake, ~4pm-~4.30pm
  • 14 August 2020 Coles, Forest Lake Shopping Centre, Forest Lake, ~4pm-~4:30pm
  • 21 August 2020, Woolworths, Forest Lake Shopping centre, Forest Lake, ~10:30am-~10:45am
  • 21 August 2020, The Chop Shop (Butcher), Forest Lake Shopping Centre, Forest Lake, ~10.45am-~11.15am
  • 21 August 2020, Best & Less, Forest Lake Shopping Centre, Forest Lake, ~10.45am-~11.15am

Browns Plains

  • 9 August 2020, Anytime Fitness Village Square, Browns Plains, 11am-12:10pm
  • 9 August 2020, Woolworths, Browns Plains Grand Plaza, Browns Plains, 11am-12pm
  • 10 August 2020, Spotlight, Browns Plains, ~9:30am-~9:45am
  • 10 August 2020, Anytime Fitness Village Square, Browns Plains, 10:15am-11:25am
  • 10 August 2020, Woolworths, Browns Plains, Grand Plaza Browns Plains, ~11am-~12:30pm
  • 12 August 2020, Coles, Browns Plains, Grand Plaza, Browns Plains, ~7:15pm-unknown
  • 14 August 2020, OfficeWorks Browns Plains, ~10am-~10:10am
  • 14 August 2020, Coles, Browns Plains, Grand Plaza Browns Plains, After 10am before 11am
  • 14 August 2020, Anytime Fitness, Village Square Browns Plains, 2:20pm-3:30pm
  • 14 August 2020, Bunnings, Browns Plains, ~2:30pm-~3pm
  • 15 August 2020 K-Mart, Browns Plains Grand Plaza, Browns Plains, ~9:30am-~9:45am
  • 15 August 2020 Anytime Fitness, Village Square Browns Plains, 10:25am-11:35am
  • 16 August 2020 Coles, Browns Plains Grand Plaza, Browns Plains, ~10:30am-~11am
  • 16 August 2020 Anytime Fitness, Village Square Browns Plains, 1:20pm-2:30pm
  • 19 August 2020, Woolworths, Browns Plains Grand Plaza, Browns Plains, ~9:30am-unknown


  • 10 August 2020, Greenbank Takeaway, Greenbank, 5:30pm-5:40pm
  • 17 August 2020, Greenbank Takeaway, Greenbank, ~6:30pm-~6:40pm


  • 11 August 2020, BP Wacol (Cnr Boundary & Progress Rds), Wacol ~6am-~6:15am
  • 18 August 2020, BP Wacol (Cnr Boundary & Progress Rds), Wacol, Evening

Mt Gravatt

  • 11 August 2020, Mt Gravatt Swimming Pool, Wecker Rd (updated), Mt Gravatt, 11.25am-12.05pm
  • 11 August 2020, Dami Japanese Restaurant, Mt Gravatt, ~12pm-unknown

Carina Heights

  • 12 August 2020, Thai Antique, Carina Heights, 6pm-6:15pm

Slacks Creeek

  • 14 August 2020, Ikea, Slacks Creek, 11am-2pm


  • 14 August 2020, Woolworths, Marsden on Fifth shopping centre, Marsden, ~11:15am-~11:30am
  • 16 August 2020 Woolworths, Marsden on Fifth shopping centre, Marsden, ~10am-~10:15am
  • 20 August 2020, Woolworths, Marsden on Fifth shopping centre, Marsden, ~10am-~10:15am


  • 16 August 2020, Riverlink Shopping Centre, Ipswich, Morning
  • 16 August 2020, The Reject Shop, Ipswich, Morning
  • 16 August 2020, Jamaica Blue coffee shop, Ipswich, Morning
  • 19 August 2020 - 20 August 2020, Ipswich Hospital ED, Ipswich, 11:00pm-6:19am


  • 17 August 2020, Indooroopilly Shopping Centre, Indooroopilly, 11:00am-1pm
  • 17 August 2020, BUPA, Indooroopilly, 11:00am-1pm
  • 17 August 2020, Origin Kebabs, Indooroopilly, 11:00am-1pm
  • 19 August 2020, Indooroopilly shopping Centre, Indooroopilly, 1pm-4pm
  • 19 August 2020, Myer, Indooroopilly, 1pm-4pm
  • 19 August 2020, David Jones, Indooroopilly, 1pm-4pm
  • 19 August 2020, Touch of Indian, Indooroopilly, 1pm-4pm
  • 19 August 2020, Sweets from Heaven, Indooroopilly, 1pm-4pm


  • 17 August 2020, Costco Bundamba self-service fuel station, Bundamba, Afternoon-Afternoon


  • 18 August 2020, BCF Greenslopes, ~12:30pm-~1pm
  • 18 August 2020, Rock and Roll Butcher, (Formerly Brisbane Bulk Meats), Logan Rd, Greenslopes, 1pm-Unknown
  • 19 August 2020, The Jam Pantry, Greenslopes, 10:30am-11:45am


  • 18 August 2020, Chemist Warehouse (Waratah Dr), Crestmead, Afternoon


  • 18 August 2020, Uncle Bill's Takeaway, Brassall, 5:45pm-6:15pm


  • 19 August 2020, 12 RND Fitness, Birkdale, 8am-9:30am


  • 19 August 2020, Red Cross Op Shop, Sherwood Rd, Sherwood, 12.30pm-~1pm
  • 19 August 2020, Newsagent in Sherwood, Sherwood Rd, Sherwood, 1.10pm-~1.20pm


  • 19 August 2020, Westfield Carindale Shopping Centre, Carindale, ~1pm-~3pm
  • 19 August 2020, Bras 'n' Things, Westfield Carindale, Carindale, ~1pm-~3pm
  • 19 August 2020, Ghanda clothing, Westfield Carindale, Carindale, ~1pm-~3pm
  • 19 August 2020, Myer, Westfield Carindale, Carindale, ~1pm-~3pm

Camp Hill

  • 19 August 2020, Baskin Robbins, Camp Hill Market Place, Camp Hill, ~5:30pm-~5:40pm
  • 19 August 2020, Pho Inn, Camp Hill Market Place, Camp Hill, ~5:30pm-~5:40pm

Updated 9:29am AEST on 28 August 2020.

E-commerce native Redbubble sees earnings more than quadruple

E-commerce native Redbubble sees earnings more than quadruple

Print-on-demand fashion and art marketplace Redbubble (ASX: RBL) has seen its niche offering ride the rise of e-commerce during FY20, with earnings up by 358 per cent during the period to $5.1 million.

The company says its FY20 financial result reflects a positive shift to online retail, which saw its marketplace recording revenue of $349 million, up 36 per cent.

However, despite the company's ability to tap into e-commerce bonanza, the group still reported a loss of $8.8 million, which was down from a $27.6 million loss in FY19.

"RB Group's on-demand fulfilment model and differentiated consumer offerings provide us with distinctive advantages," says Redbubble CEO Martin Hosking (pictured).

"The strong financial performance follows from these fundamentals. It has been pleasing to see the acceleration of existing trends in the last few months.

"2021 represents a year of opportunity for the business. We are positioned to build on a decade of momentum and aggressively pursue the global opportunity presented by the shift to online activity and increasing adoption of e-commerce platforms."

Redbubbles' revenue growth was particularly strong during the fourth quarter when COVID-19 lockdowns and restrictions were implemented by governments worldwide.

COVID-19 initially resulted in sales volatility and a reduction of demand for Redbubble's goods, however, after this initial decline, the group benefitted from an acceleration in online activity.

Gross profits of $134.9 million strengthened over the course of FY20 following the onboarding of additional fulfilment capacity in Europe, Canada and the United States.

The financial year was also the first full year of TeePublic's inclusion in the group's results following Redbubble's acquisition of the t-shirt marketplace in October 2018.

Because Teepublic operates in a similar economic environment to Redbubble's main marketplace the revenue results for the two were bundled. Together, they generated $416 million in revenue for the umbrella company.

During the year there were 551,000 selling artists on the Redbubble platform, up 51 per cent, and artist earnings were $67 million, up 35 per cent.

The company now has 6.8 million unique customers, with repeat consumers accounting for 40 per cent of marketplace revenue.

Redbubble says the new financial year has started strongly, with July marketplace revenue growth more than doubling in July, and similar sales levels in the first two weeks of August.

The company has not paid and does not propose to pay dividends for the year ended 30 June 2020.

At the year end, Redbubble retained a cash balance of $58 million - an increase of $29 million.

Shares in Redbubble are up 0.28 per cent to $3.56 per share at 11:15am AEST.

Updated at 11:51am AEST on 21 August 2020.

Smiles Inclusive has three weeks to cough up $12m to NAB

Smiles Inclusive has three weeks to cough up $12m to NAB

For at least 14 months struggling Gold Coast-based company Smiles Inclusive (ASX: SIL) has barely put a dent into a $19 million debt to National Australia Bank (NAB), despite capital raisings and asset sales. 

Now the dental practice network, having burned around $7 million in cash in FY20, is expected to pay back more than $12 million of that amount by 11 September.

The outstanding debt to NAB includes a temporary $330,750 JobKeeper facility.

In a release yesterday, Smiles Inclusive said it was pleased to announce it had agreed to finalise the banking relationship with NAB under a formal release deed.

NAB agreed to release and discharge Smiles from liability under its various banking facilities on receipt of the $12 million and a $347,658 credit card facility by 11 September, and the JobKeeper facility within two business days of the company receiving ATO funds for September.

The company explains the deal was reached as part of a recapitalisation plan, and it noted various sales and consolidations had been reached but without providing dollar figures.

Smiles confirmed it had sold its Miranda and Yarram practices and the proceeds were used to reduce the NAB loan on 13 July and 12 August respectively - both payments prior to the 14 August when the balance stood at $19.29 million.

The company has also restructured its dentures and mobile divisions, resulting in the consolidation of 15 tenancies as part of a portfolio simplification and operational effectiveness plan.

Smiles Inclusive chief executive officer Michelle Aquilina explained the company was in advanced discussions with a professional underwriter to raise capital for the company, with a target completion date by the end of September 2020.

"We remain focused on our goals to manage our core business efficiently and effectively to maximise shareholder value," she said.

"The results to date have demonstrated the efforts, commitment and professionalism from our people during these challenging times and I am sincerely thankful to them."

The group also clarified that its long-awaited audited first half results - whose delay is the cause of a long-running suspension from trading - are just around the corner. 

"The Company expects the audit review of the interim financial statements for the half-year ended 31 December 2019 to be completed by no later than 31 August 2020," Smiles Inclusive said.

"The full year audit work for the year ended 30 June 2020 is in progress and the Company expects to have this finalised shortly in the near future.

"The Company will also be lodging Appendix 4C cash flow statements monthly and looks forward to providing the regular cash flow updates going forward."

ASX raised concerns over lodging of Aquilina's appointment

Yesterday's announcements come almost a week after Smiles' response last Friday to an ASX query regarding why formal documentation regarding Michelle Aquilina's CEO appointment was lodged almost four months late.

While Smiles Inclusive had reported on Aquilina's appointment in April following the departure of former CEO Tony McCormack, it lodged the Appendix 3X with more details on 11 August.

"As the Notice indicated that Ms Aquilina was appointed on 9 April 2020, it appears that the Notice should have been lodged with ASX by 20 April 2020," the ASX said in its query.

"As the Notice was lodged on 11 August 2020, it appears that SIL may have breached listing rules 3.19A and/or 3.19B.

"It also appears that Ms Aquilina may have breached section 205G of the Corporations Act 2001 (Cth)."

In its response, Smiles explained the late lodgement was an administrative oversight as the company was in the midst of managing the COVID-19 crisis.

"The lodgement of the Appendix 3X under Listing Rule 3.19A.1 was a requirement that was inadvertently overlooked at the time of the appointment of Ms Aquilina as CEO and Managing Director," the company said.

The company's filing also included information on Aquilina's remuneration of $360,000, which is 26 per cent more than her predecessor McCormack who was on $285,000. 

In order to ensure compliance with listing rules, Smiles noted it had an external consultant in place who provides company secretarial services to the company. The group has been without a CFO since mid-May, but in a letter to shareholders yesterday chairman David Usasz said the company was in the final stages of appointing one.

Usasz added the proposed EGM to replace all of Smiles' existing directors represented an unnecessary distraction and cost for the company.

"A change of directors at this time would be disruptive, if not disastrous," he said.

"The call comes at a time when the Directors and management are leading a major turnaround in the operational and financial performance of the company to ensure a sustainable future and enhance shareholder value."

"The Requisitioning Shareholders have nominated Dr Joao Camacho, Dr Philip Makepeace and Dr Arthur Walsh as their proposed replacement directors of the company."

He noted this latest call for an EGM came only 14 months after the last EGM requisitioned by some of the current party.

"At that EGM, Dr Camacho failed in his bid to be elected to the Board. Subsequently, Dr Camacho and others sought to requisition a second EGM to consider the same resolutions that failed at the first EGM," Usasz said.

"In effect, this latest call for an EGM is the third time that Dr Camacho has sought to remove the Directors and to be elected to the Board.

"Dr Camacho, Dr Makepeace and Dr Walsh have never been directors of a publicly listed healthcare company. They and the Requisitioning Shareholders have not put forward any plan to improve the Company's balance sheet or any plan for turning around the performance of the business to create sustainable growth.

"Dr Camacho, Dr Makepeace and Dr Walsh terminated their facilities and services engagement with the Company some months ago and no longer work with the Company."

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Business News Australia

ASIC launches fees for no service cases against StatePlus Super, Westpac subsidiaries

ASIC launches fees for no service cases against StatePlus Super, Westpac subsidiaries

The Australian Securities and Investments Commission (ASIC) has today commenced its third and fourth legal actions over 'fees for no service' (FFNS) behaviour, this time with StatePlus Super, Asgard Capital Management and BT Funds Management in the firing line.

Like ongoing cases launched over the past couple of years against National Australia Bank (ASX: NAB) and two of its wealth management companies, the latest civil penalty proceedings stem from the findings of the Royal Commission. 

The corporate watchdog alleges State Super Financial Services Australia (StatePlus Super) charged fees to at least 36,592 members for advice it did not provide, with potential penalties of between $1.7-2.1 million per contravention if the fund is judged guilty.

ASIC alleges that from 1 April 2013 to 30 June 2018, StatePlus:

  • charged at least 36,592 members fees for financial advice it promised to provide (Fees for No Service) but did not provide. This included the promise of an annual financial planning review (Annual Review) and to contact members as part of the Annual Review;
  • issued defective disclosure documents or statements that included promises to provide annual financial advice to members in circumstances that StatePlus did not have reasonable grounds for believing it could provide;
  • failed to establish and maintain the appropriate internal procedures, measures and controls to ensure that, as far as reasonably practicable, it could provide or would be able to provide the promised annual financial advice; and contravened its overarching obligations as an Australian financial services (AFS) license holder to act efficiently, honestly and fairly.

Shortly after filing these proceedings in the Federal Court, ASIC commenced another case against Westpac subsidiaries Asgard and BT.

The regulator alleges Asgard charged adviser fees to 404 customers for financial advice that was not given, and both companies of making misleading representations in half-yearly or annual account statements regarding the charging of the adviser fees.

ASIC alleges that from September 2014 to August 2017:

  • Asgard charged customers around $130,006 for financial advice after requests were made for customers' financial advisers to be removed from their product accounts and after the advisers ceased providing advice;
  • In relation to superannuation products for which it is trustee, BT issued account statements which appeared to show that adviser fees were no longer being charged while the 'adviser fee' line item was removed from the account statement, an amount equal to that fee was added to the administration fee amount;
  • In relation to an investor directed portfolio service (IDPS) for which it is the issuer, Asgard issued account statements which appeared to show that adviser fees were no longer being charged while the 'adviser fee' line item was removed from the account statement, an amount equal to that fee was added to the administration fee amount;
  • The wrongly charged fees were retained by Asgard as revenue; and
  • Asgard contravened its overarching obligations as an Australian financial services (AFS) license holder to act efficiently, honestly and fairly.

ASIC Deputy Chair Daniel Crennan QC was reserved in his statement about the new cases.

"Today, ASIC has commenced a 'fees for no service' case against BT and Asgard as well as commencing a 'fees for no service' case against StatePlus Super," Crennan said.

"Both cases, which relate to superannuation, were subject to cases studies in the Royal Commission, were investigated by ASIC's Office of Enforcement and have been brought by ASIC to the Federal Court for determination."

Concise statements for the notices of filing can be found here for StatePlus Super and here for the Westpac subsidiaries.

ASIC is also overseeing FFNS remediation programs involving other financial services licensees including Bendigo Financial Planning Ltd, Police Financial Services Ltd (trading as BankVic) and Yellow Brick Road Wealth Management Pty Ltd.

Photo courtesy of Adz, via Wikimedia Commons.

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Business News Australia

$10m of emergency funding now available for Melbourne CBD businesses

$10m of emergency funding now available for Melbourne CBD businesses

From today, businesses based in Melbourne's CBD can apply for up to $5,000 in funding as part of the city's COVID-19 business support scheme.

Worth $10 million in total, the funding package includes $8 million in grants for business transformation and $2 million for mentoring and business support services.

The grants are available for businesses that:

  • Have a valid ABN,
  • Are a bricks and mortar business based in the CBD, Southbank or Docklands,
  • Employ up to 50 full time equivalent staff, and
  • Are a participant in the Federal Government's JobKeeper program.

Hospitality and entertainment businesses are not eligible for these particular grants, as they are able to receive funding through the Victorian Government's Small Hospitality Grants program.

Non-employing sole traders, political organisations, fundraising groups and government departments are also ineligible.

"These businesses are a critical part of the fabric of our city and they are more than just numbers on a balance sheet," said Melbourne Lord Mayor Sally Capp.

"They are Melburnians who have taken a risk to pursue a passion and provide employment for others.

"The continued viability and success of Melbourne businesses is critical to Victoria, as our economy accounts for one quarter of the overall Victorian economy."

The City of Melbourne anticipates the business transformation grants will support around 1,600 businesses.

Applications for the grants opened at 6am today via the City of Melbourne website, and will close at 11.59pm on Thursday 3 September.

Mentoring and business support will be available over the coming weeks.

Updated at 12:49pm AEST on 20 August 2020.

IDP Education overcomes disruption as profits rise on digital pivot

IDP Education overcomes disruption as profits rise on digital pivot

With a business that revolves around international students, IDP Education (ASX: IDP) could have easily been one of the scores of companies reporting losses due to COVID-19 travel restrictions. 

But the Melbourne-based group has done just the opposite, reporting a 29 per cent increase in EBITDA to $148.6 million.

While the company's English language testing and student placement levels in Australia were down, operations were buffered by IDP's digital strategy while declines were offset by a 52 per cent surge in multi-destination student placement revenue. 

IDP Education is led by Andrew Barkla, who according to the Australian Council of Superannuation Investors (ACSI) was the highest paid CEO on the ASX in FY19 with earnings of $37.76 million.

Financials revealed in today's FY20 results show fewer available CEO incentive options meant Barkla likely took home an estimated $11 million during the period, which would still place him - the head of a mid cap - amongst the nation's highest executive earners.

In today's announcement, Barkla commended his global team for delivering solid results, which in statutory terms led to a 3 per cent rise in NPATA despite the disruption to travel markets and student movements.

"Our results reflect strong momentum in the first of the half year, followed by a pivot towards disciplined capital management and product innovation in the second half," he said.

"Our recent investment in digital talent and our technology platform has enabled us to respond to COVID-19 restrictions with agility and customer centricity."

Adapting to a near-global shutdown of the International English Language Testing System (IELTS), which constitutes the majority of the group's revenue, the company rapidly rolled out an online IELTS test to help students progress applications where in-centre testing was suspended.

As a result, the company's English language testing segment revenues fell by 9 per cent to $325.5 million. There was however a slight increase in sales from its much smaller English language teaching business.

While student placements in Australia were down by 13 per cent, the shift to multi-destination volumes led the segment's revenue to jump by 12 per cent to reach $190 million.

Barkla said although many international students' plans were on hold due to travel restrictions, demand for international education remained strong.

"Gaining an international education is a lifelong aspiration. Our research shows 74 per cent of IDP students with current university offers are holding on to their study goals," he said.

Similarly, IELTS is regaining momentum after social distancing requirements put it in a stranglehold.

"While IELTS volumes were impacted in the second half of FY20, we are encouraged to see our testing centre network has safely reopened in 53 of the 55 countries in which we operate," Barkla said.

The executive said the group's focus remained on accelerating its rebound and capturing market opportunities.

"Throughout this period of disruption, we continued to execute on our vision of building the world's leading platform for international students," he said.

"Our global dataset and insights have been sought-after by policy makers and educators around the world. We will continue to share our insights to help the sector and ensure the interests and behaviours of students remain at the fore of all decision making.

"The world needs educated and globally ambitious people now more than ever. We are proud of our role in helping connect the next generation of business leaders, doctors, nurses, planners, policy makers to their global study goals."

Updated at 1:24pm AEST on 20 August 2020.

COVID-19 alert in Brisbane: cases linked to The Jam Pantry café, youth detention centre

COVID-19 alert in Brisbane: cases linked to The Jam Pantry café, youth detention centre

Queensland Health has issued a public health alert after a woman who spent time in Brisbane tested positive for COVID-19 upon returning home to Japan.

The woman arrived in Sydney in mid-July where she spent two weeks in hotel quarantine, before visiting her unwell father in Brisbane.

The asymptomatic case, confirmed as a positive COVID-19 infection by Japanese health authorities yesterday, returned two negative test results when she was in Sydney.

In Brisbane the woman dined at The Jam Pantry café at Greenslopes on Sunday 16 August, meaning anyone who visited there should monitor for COVID-19 symptoms and get tested if any appear.

Queensland Health is also working with NSW Health to contact people from Virgin flight VA962 from Brisbane to Sydney on Monday, 17 August, who were in close contact with the case.

Queensland Health is cooperating with Japanese authorities to determine where she might have picked up COVID-19.

"On her arrival to Japan on 18 August, she was asymptomatic but returned a positive COVID-19 result," said Queensland chief health officer Dr Jeannette Young.

"While we are still determining where the virus may have been acquired, we are working with Japanese authorities to gather necessary information.

"We have been in touch with six close contacts in Brisbane identified by the woman. These people have been tested and are now in quarantine."

Anyone else who dined at The Jam Pantry café outside these hours on that day should come forward for testing if they develop any COVID-19 symptoms.

Youth detention centre worker tests positive

The Queensland Government has also confirmed a new positive case in the state - a 70-year-old woman from the Ipswich area who worked at the Brisbane Youth Detention Centre in Wacol while unwell.

It is believed she developed the symptoms on 10 August, but authorities are still in the process of finding out more details.

Dr Young noted the good news was that the detention centre in question had not been receiving any visitors, as a precautionary measure following the incident of three women (two who were COVID-19 positive) who travelled to Melbourne and failed to declare it.

Updated at 9:03am AEST on 20 August 2020.

Qantas drops $2.7 billion into the red, significant loss flagged for FY21

Qantas drops $2.7 billion into the red, significant loss flagged for FY21

Qantas (ASX: QAN) has reported a $2.7 billion loss for FY20 amidst what CEO Alan Joyce has described as the worst trading conditions in the airline's 100-year history, with significant losses expected in the current financial year as well.

Despite a few bright spots such as Qantas International actually turning a $56 million profit thanks to record freight performance and a huge increase in e-commerce, the situation has been grim for Australia's leading airline.

"To put it simply, we're an airline that can't really fly to many places - at least for now," says Joyce.

"The impact of that is clear. COVID punched a $4 billion hole in our revenue and a $1.2 billon hole in our underlying profit in what would have otherwise been another very strong result."

Around half of the statutory loss is non-cash, including a $1.4 billion write down of assets including the A380 fleet which are currently in storage in the USA's Mojave Desert, and more than $600 million in redundancies and other costs.

Joyce says COVID-19 will continue to have a huge impact on the business and an underlying loss is expected in FY21. With the exception of New Zealand flights which are still in limbo, international operations are unlikely to restart until at least the following financial year - July 2021.

Qantas collected $267 million in JobKeeper payments this year which helped buffer the pandemic's blow, but the group still had to let thousands of staff go. Joyce highlights these problems are industry-wide.

"It's devastating and it will be a question of survival for many. What makes Qantas different is that we entered this crisis with a strong balance sheet and we moved fast to put ourselves in a good position to wait for the recovery," he says.

"We've had to make some very tough decisions in the past few months to guarantee our future. At least 6,000 of our people will leave the business through no fault of their own, and thousands more will be stood down for a long time.

"Recovery will take time and it will be choppy. We've already had setbacks with borders opening and then closing again. But we know that travel is at the top of people's wish lists and that demand will return as soon as restrictions lift."

Joyce says the FY20 result, including a $124 million underlying profit, shows how the COVID crisis derailed what would have been a strong financial performance.

"We were on track for another profit above $1 billion when this crisis struck. The fact that we still delivered a full year underlying profit shows how quickly we adjusted when revenue collapsed," he says.

"Qantas Loyalty's profit was down less than 10 per cent and member satisfaction increased in the fourth quarter, which shows the strength of that business.

"Qantas Freight has been a major beneficiary of the shift to people shopping online and our charter flying for resources companies is strong."

The airline notes current border restrictions have meant 20 per cent of pre-pandemic capacity is scheduled for domestic operations in August, but recent sales activity shows high levels of latent travel demand for when restrictions are eased.

"Looking further ahead, we're in a good position to ride out this storm and make the most of the recovery," says Joyce.

"Our market position is set to strengthen as the only Australian airline with a full service and low fares domestic offering as well as long haul international services."

Updated at 9:27am AEST on 20 August 2020.

COVID-19 uncertainty sees Vocus post $178m loss

COVID-19 uncertainty sees Vocus post $178m loss

Internet service provider Vocus (ASX: VOC) has seen its profits fall away in FY20 as it grapples with how COVID-19 will impact the small-to-medium business sector.

The company posted a loss for FY20 of $178.2 million today, down from a profit of $34 million last year, with revenue also dipping by 6 per cent.

Vocus attributes this downturn to an $202 million impairment to its goodwill and brand, relating to the uncertainty faced by its Australian SME clients.

"Due to the uncertainty caused by COVID-19, the outlook for the small to medium business sector is more challenging for the foreseeable future," says Vocus.

As such, the company has reduced the carrying value of intangible assets related to its retail business unit from $500 million to $298 million.

"The strong growth of the Vocus Network Services and New Zealand business units continues to support carrying values of intangible assets of $781 million and $366 million respectively," says Vocus.

The Sydney-based telco delivered EBITDA growth of 3.5 per cent to $361.3 million in FY20, with recurring revenue up 6 per cent.

In addition, revenue from high-margin data networks grew by 3 per cent for the full year, with NBN revenue up 42 per cent year on year.

"Vocus' FY20 results show that we are firmly on track in our three-year turnaround, meeting all aspects of financial guidance that was first provided in July 2019," says Vocus managing director and CEO Kevin Russell.

"The Group operated strongly throughout the year and especially during COVID-19, which has reinforced the essential nature of telecoms infrastructure and services.

"Revenues have been resilient and cash collections strong across the organisation."

Shares in Vocus are up 7.51 per cent to $3.15 per share at 2:52pm AEST.

Updated at 4:01pm AEST on 19 August 2020.

WiseTech shares jump on bullish FY21 profit forecast

WiseTech shares jump on bullish FY21 profit forecast

Shares in logistics solutions provider WiseTech (ASX: WTC) have risen 32 per cent to $27.51, hitting their highest levels since a February crash when FY20 guidance was cut by 17 per cent due to the onset of COVID-19.

Today the group founded by former music executive Richard White reported an EBITDA of $126.7 million, above the midpoint of guidance and representing year-on-year growth of 17 per cent.

The increase in NPATA was not as pronounced at 3 per cent to reach $64.6 million, with WiseTech attributing the difference to increased depreciation and amortisation expenses due to greater R&D investments and new product development.

A slowdown in the movement of goods led to volatility in global logistics markets from late January through to May, but WiseTech started to see signs of moderate recovery in June. 

User numbers for the Sydney-based company's CargoOne logistics software platform were close to pre-COVID levels by the end of July, giving the board the confidence to forecast optimistic revenue and profit guidance for FY21.

The company expects EBITDA to rise by 22-42 per cent to a range of $155-180 million, along with a 9-19 per cent rise in revenue to $470-510 million.

"The COVID-19 challenges faced by the global logistics and supply chain sectors are accelerating the longer term trend towards consolidation and integration," says White.

"Within this environment, we are seeing increased demand amongst large global logistics service providers for our technological and digital solutions that drive efficiencies and productivity improvements.

"WiseTech is ideally placed to address this growing demand, with our logistics execution technology and 40 development centres delivering seamless, global capabilities that improve productivity, functional depth, data integration and visibility, regulatory compliance and value for over 17,000 customers worldwide."

This bullish outlook has pushed the WTC share price closer to the $29 mark they were trading at on 19 February before a frenzied sell-off, likely giving some investors déjà vu of movements that followed a short seller report from J Capital in October last year that wiped billions from WiseTech's value.

J Capital has made repeated criticisms of WiseTech. In its most recent report in June the fund's co-founder Anne Stevenson-Yang raised doubts about the acquired business Containerchain, which she believed to be "bleeding accounts" as a "loss-making business that could now potentially collapse".

"The total of $97.6 million in cash that WiseTech paid in early 2019 was clearly too rich for this company, whose revenue we now expect to halve in next financial year while losses increase as customers abandon the platform," Stevenson-Yang said.

In its reports today, WiseTech notes Containerchain contributed $4 million to group revenue and around $100,000 in net profit from the date of the acquisition. The Goodwill on Containerchain has been reduced by $10.6 million, while for other acquisitions it is down $23.5 million.

These numbers are significantly lower than Stevenson-Yang's warnings for investors to expect goodwill write-downs of around $200-300 million.

In contrast, the company has reported a non-cash, non-taxed fair value gain of $111 million generated as a result of the renegotiation of acquisition earnout obligations and adjustments in the first half of 2020.

In her report in June, Stevenson-Yang alleged Wisetech was trying to sweep its failed acquisition strategy under the carpet by writing down earn-outs without writing off the equivalent item - goodwill.

"WiseTech frantically rid itself of 40 per cent of the earn-outs from 17 poor-performing acquisitions in May," she said.

In its report today, WiseTech highlighted a "robust" financial position and explained COVID-19 provided the impetus for WiseTech to renegotiate and completely or partially close-out 22 acquisition earnout obligations.

"These close-outs included the replacement of various cash payouts with equity resulting in improved overall liquidity and better alignment of the acquired businesses to the company's objective of accelerating technology development and improving commercial efficiency."

The company also reported today that 29 per cent of its revenue growth in FY20 came from acquisitions, mostly driven by the full-year impact of 14 acquisitions in FY19 and five acquisitions in FY20.

Updated at 3:06pm AEST on 19 August 2020.

Crown profits take a hammering from closed casinos

Crown profits take a hammering from closed casinos

With its casinos closed in line with COVID-19 restrictions for a chunk of the last financial year, Crown Resorts (ASX: CWN) witnessed an 80.2 per cent dive in profits after tax down to $79.5 million.

The group was forced to close all of its gaming facilities as well as a significant part of non-gaming operations at Crown Perth and Melbourne - the latter is still not operational because of the city's Stage 4 lockdown.

As such, Crown stood down 95 per cent of its workforce and take up the Federal Government's JobKeeper program, receiving $111.3 million in wage subsidies through to 30 June. Crown has announced today it will not declare a final dividend for the full financial year.

Closure costs added up to $81.6 million for the financial year, and the company recorded impairments worth around $75 million relating to its operations in London and restaurant chain Nobu.

CEO and managing director Ken Barton describes the year as "extremely challenging".

"Given this backdrop, Crown has been focussed on liquidity management to ensure it is well placed to withstand this extended period of closure," says Barton.

"Despite the challenges of COVID-19, the construction of Crown Sydney has continued throughout this period and it's a credit to our team that it remains on track for its scheduled December opening."

Crown's earnings also suffered because of the COVID-19 pandemic, down 40.6 per cent to $504.6 million, as did its resort revenue streams which were down 25.7 per cent to $2.2 billion.

Naturally, with international travel off the cards, the company witnessed occupancy at its Melbourne hotels of 82 per cent and at its Perth hotels of 66 per cent on average, with both its Melbourne and Perth hotels used as quarantine facilities.

Without a physical place to gamble, punters tried their luck with Crown's digital wagering businesses Betfair and DGN Games.

EBITDA from the digital gaming operations was $34.7 million, up 32 per cent year-on-year.

At 30 June Crown's net debt position was $891.5 million, with the company securing an agreement from its lenders for a waiver of banking covenants due to the ongoing closure of Crown Melbourne.

Crown says it has been encouraged by initial trading performances from its recently reopened casino in Perth, especially given the operating restrictions which remain in place like physical distancing requirements and limited product availability.

For the period from 1 July to 16 August Crown Perth's main floor gaming revenue was up approximately 18 per cent on the pcp, but non-gaming revenue was down 24 per cent.

Based on current trading levels, Crown Perth is not expected to qualify for the JobKeeper program beyond 27 September.

Shares in Crown are up 2.85 per cent to $9.76 per share at 1:48pm AEST.

Updated at 2:26pm AEST on 19 August.

Tabcorp to raise $600m as COVID-19 closures spark massive loss

Tabcorp to raise $600m as COVID-19 closures spark massive loss

All bets are off for gambling giant Tabcorp (ASX: TAH) as it looks to raise capital to offset the impacts of more than $1 billion in impairment charges due to COVID-19.

The company posted a $870 million loss today, which is a far cry from the company's FY19 profit of $362.5 million.

Despite recent reopenings in most of the country CEO David Attenborough said closures form 23 March were a major challenge for the company.

"The COVID-19 pandemic has been very challenging for Tabcorp's people, partners and customers, and materially impacted our FY20 results," says Attenborough.

"COVID-19 restrictions meant that hotels, clubs and TAB agencies were closed for significant periods of time during FY20.

"We continue to support our venue partners and have waived more than $100 million in fees to date."

To mitigate the impacts of this disastrous year, Tabcorp has announced a $600 million equity raise.

Attenborough says the proceeds of the entitlement offer will be used to pay down existing drawn bank debt facilities and strengthen the company's balance sheet during uncertain times.

"The continued significant uncertainty regarding the severity and duration of the COVID-19 impact has led Tabcorp to reconsider its previous capital management targets in order to improve its credit metrics and conserve more capital over time," says Attenborough.

"We remain confident that the strength and resilience of Tabcorp's diversified portfolio of businesses will allow Tabcorp to manage current market challenges and we continue to focus on executing strategies to create value for shareholders."

The offer, at a price of $3.25 per new share, represents an 11.4 per cent discount to Tabcorp's closing price on 18 August.

While the company's wagering and gaming businesses suffered because of COVID-19 venue closures, the group's lotteries & Keno business did most of the heavy lifting in FY20.

Lotteries & Keno revenues were up 1.8 per cent to $2.9 billion, and EBITDA was up 5.7 per cent to $542 million.

Tabcorp says while distribution partners like newsagents and convenience stores buoyed the lotteries division during COVID-19 lockdown periods, it was the company's digital product that witnessed the most revenue growth, up 23.5 per cent and accounting for 28 per cent of the division's total turnover.

Wagering revenues were down 10.1 per cent to $2.08 billion in FY20, impacted by COVID-19 enforced closures and restrictions.

As a result of those closures Tabcorp says the pivot to digital has been accelerated, with digital wagering turnover growing by 3.8 per cent compared to a 27.9 per cent decline to retail turnover.

"This is the first time digital turnover has exceeded retail turnover in Tabcorp's Wagering business across a full year," says Tabcorp.

Similarly, the company's gaming division was impacted by venue closures, resulting in a 27.3 per cent revenue dive to $221 million.

The company appears to be cautiously emerging from lockdowns in Australia (except for in Victoria), with group revenues up 2.8 per cent on the pcp in July.

In terms of Tabcorp's three business units, lotteries & Keno revenues were up 4.7 per cent, wagering was up 6.8 per cent, and gaming was down 52.2 per cent.

"There continues to be uncertainty associated with COVID-19 in terms of both the severity and duration of the impact," says Attenborough.

"It remains a challenging time, especially for the Victorian community which is in the middle of a difficult Stage 4 lockdown.

"With the integration of Tatts substantially complete, we are focused in FY21 on capturing the value from the digital opportunity across Lotteries, Keno and Wagering and on unlocking the value of a more competitive TAB."

Updated at 11:27am AEST on 19 August 2020.

Corporate Travel Management surprises market with underlying profit

Corporate Travel Management surprises market with underlying profit

After Flight Centre (ASX: FLT) last week reported a loss equivalent to around 39 per cent of its market capitalisation, Corporate Travel Management (ASX: CTD) has today reported a marginal loss while recent monthly revenue is tracking well above expectations.

The group reported a statutory loss of $8.2 million for FY20, which is less than 1 per cent of that reported by its Brisbane-based peer FLT. 

Corporate Travel Management would have been in the black if it weren't for one-off costs, and the company does not expect any items of this nature in the current financial year.

Non-recurring costs after tax reached $33.8 million and mostly stemmed from COVID-19 related issues such as $15.1 million paid out in redundancies, bad and doubtful debts of $13 million from market impacts and supplier failures including problems with Virgin Australia, and $9.1 million in the amortisation of intangible assets due to lower client demand.

CTM's underlying net profit after tax (NPAT) of $32 million, a Q4 average monthly revenue rate of $11.5 million compared to expectations in May of $2-5 million and 97 per cent client retention all helped shares take off this morning by 9.3 per cent to $13.27 each.

As a recipient of the JobKeeper wage subsidy, the group has acted in the spirit of the scheme and cancelled its dividends.

"Revenue has been ahead of our May market update expectations with high exposure to domestic essential travel," says managing director Jamie Pherous (pictured).

"This coupled with our flexible business model and rapid response to COVID-19 enabled CTM to deliver full-year results that exceeded our market update provided in May.

"Because we moved early and rapidly with redundancies and other cost reductions, we have been able to stem our losses very quickly, and do not expect any further significant one-off costs in the current FY21 financial year."

Pherous says CTM's business model positions the company for a "rapid return to profitability" with only a marginal increase in domestic travel activity from current levels.

In the fourth quarter the company recorded an average a monthly EBITDA loss of $3 million, but as of Monday 17 August it had $55 million cash in the bank, zero debt and undrawn committed facilities of $180 million.

That monthly loss was trimmed back to $2.2 million in July, while its European and Australia/NZ businesses broke even.

The group highlights client activity has begun to recover from a low point in April. Monthly revenue is typically lowest in July, reflecting the northern summer vacation.

However, bookings in July were greater than in June, suggesting a broad-based recovery in corporate travel activity is underway, especially in the northern hemisphere as corporate clients return to work in August. 

The group is also looking to potentially make acquisitions as an extended period of no international travel is likely to create opportunities for industry consolidation.

Updated at 11:29am AEST on 19 August 2020.

Tasmanian border measures to remain in place until 1 December

Tasmanian border measures to remain in place until 1 December

Victoria's ongoing outbreak of COVID-19 is still of serious concern for the state's southern neighbour, forcing Tasmania to keep current restrictions and border measures in place until 1 December.

As such, the island state will keep its hard border up with the rest of the country, and current gathering restrictions on businesses, households, venues and workplaces will not change.

Tasmanian Premier Peter Gutwein (pictured) says the extension of restrictions will allow sufficient time for the outbreak in Victoria and the threat posed to other states to be clearly controlled.

"This will enable our community and our businesses to understand and prepare for border relaxations, and to ensure appropriate planning and risk mitigation processes are in place," Gutwein said.

"At the moment the risk posed to Tasmania by the situation in Victoria is considerable. There are many Tasmanian businesses, which have had to close their doors, who are only just returning to reasonable levels of trade, and many others who are still doing it very tough.

"But we must avoid a situation like Victoria or NSW, as we would have to impose serious restrictions once again. We would see shrinking business confidence and the jobs regained, lost once more."

Current restrictions imposed on Tasmanians businesses include:

  • A maximum of 250 people for an undivided space in an indoor businesses;
  • A maximum of 500 people in an undivided space outdoors; and
  • The maximum density limit is one person per 2 square metres.

Household gatherings can have up to 20 people at any one time, not including the residents of the household and Tasmanians are also still encouraged to work from home if possible.

$7.5 million in travel grants for Tasmanians

With the border closures extended yet again Premier Gutwein has announced his government will be subsidising costs for intra-state travel.

From 1 September the 'Make Yourself at Home travel voucher' will be made available as part of a $7.5 million program.

$2.5 million each month will be made available to support Tasmanians who travel outside of their municipality, to stay midweek in accommodation, to enjoy a tourism experience, or visit an attraction on any day of the week.

The support will provide up to $100 toward the cost of a room in commercial accommodation or up to $50 per booking to participate in a tourism experience.

"Tasmanians we know, have been very supportive of local businesses, with hotel and accommodation occupancy rates being relatively strong during the recent school holidays and on the weekends especially," Gutwein said.

"However, midweek overnight occupancy remains weak, and many of our tourism experiences and attractions have significant capacity to share their product with Tasmanians.

"We want Tasmanians to experience this wonderful state and support these businesses."

Updated at 3:00pm AEST on 18 August 2020.

WA extends Phase 4 restrictions for another two months, Royal Show cancelled

WA extends Phase 4 restrictions for another two months, Royal Show cancelled

Current COVID-19 restrictions in Western Australia will be extended for another two months to allow for the outbreak in Victoria to come under control.

As such, WA will move to Phase 5 of its restriction easing roadmap on Saturday 24 October.

The delay also means the 2020 Perth Royal Show has been cancelled.

"I know this will cause some frustration and problems for some parts of our community," says WA Premier Mark McGowan (pictured).

"We're trying to find the right balance here between protecting our community and keeping our economy as open as possible.

"While we have had no community transmission in Western Australia for 129 days now, we simply can't afford to get complacent because the virus could sneak back into Western Australia it spreads like wildfire."

As such, the following Phase 4 restrictions will remain in place:

  • Gathering limits only determined by WA's reduced 2 square metre rule
  • The 2 square metre rule will only include staff at venues that hold more than 500 patrons
  • Removal of seated service requirements at food businesses and licensed premises
  • No requirement to maintain patron register at food businesses and licensed premises
  • Alcohol can be served as part of unseated service arrangements
  • All events permitted except for music festivals
  • Unseated performances permitted at venues such as concert halls, live music venues, bars, pubs and nightclubs
  • Gyms operating unstaffed, but regular cleaning must be maintained
  • The casino gaming floor reopening under agreed temporary restrictions.

Phase 5 would see remaining restrictions removed, except WA's hard border and access to remote Aboriginal communities.

It would also see the removal of WA's 2 square metre rule and the 50 per cent capacity limit for major venues.

"We have been fortunate enough to remain in Phase 4," says McGowan.

"This has been crucial to kickstarting our economy and providing West Australians with the freedoms we experience.

"By remaining in Phase 4 for longer it assists us in reducing the numbers of people who could be potentially exposed, or requiring health responses, should an outbreak occur."

The extension comes as Western Australia records just one new case of COVID-19 today: a returned overseas traveller in hotel quarantine.

On the east coast Victoria has recorded its lowest number of new confirmed cases of COVID-19 in a month today, with 222 new cases.

The state also confirmed 17 new deaths from COVID-19, down from 25 on Monday.

New South Wales reported just three new cases today including one in hotel quarantine.

Updated at 1:03pm AEST on 18 August 2020.





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