Staying informed is more important than ever as the situation unfolds with Covid-19. Stay tuned here for our live updates, and be sure to let us know what your business is doing to face this unprecedented challenge.


 

Tabcorp stands down 700 staff as sport hiatus bites into betting

Tabcorp stands down 700 staff as sport hiatus bites into betting

Australia's largest gambling company Tabcorp (ASX: TAH) has taken a battering from the cancellation of major sporting events and the shutdown of licensed venues and TAB agencies where so many of its clients like to take a punt.

New and obscure sport betting options like the Belarusian Premier League and Tajikstan men's basketball have been unable to compensate for loss of revenue that would normally come from the world's most popular competitions in Australia and worldwide.

This state of affairs has led the group to temporarily stand down more than 700 employees to 30 June 2020 in businesses where there is no work due to coronavirus-related closures. 

A further 160 technology contractors have also been let go, representing a cut of 40 per cent. 

Business-as-usual expenditure for the current half is expected to be down by a quarter at around $120 million, and Tabcorp has expanded its banking facilities through an additional $226 million short-term facility payable in mid-2021.

Managing director and CEO David Attenborough has also taken a 20 per cent fixed remuneration pay cut until the end of the financial year.

"This continues to be a very challenging time for our people, businesses, partners and the community," says Attenborough

"We are committed to working proactively and collaboratively with all our stakeholders so that we can collectively emerge from the Covid-19 period as strongly as possible."

Meanwhile, chairman and non-executive director fees have been reduced by 10 per cent, following on from an earlier 10 per cent cut in September last year.

Tabcorp highlights its Lotteries & Keno and Wagering & Media digital channels continue to operate, as well as the lotteries retail network of newsagents, convenience stores and other outlets.

Thoroughbred, harness and greyhound race meetings in Australia (excluding Tasmania) are currently still being conducted in accordance with strict state government biosecurity and public health restrictions.

Fees owed in April by venues under Sky Racing, TAB, Keno and MAX contracts have been suspended, and will be reviewed every month in light of Covid-19 developments.

Updated at 9:56am AEST on 7 April 2020.


CSL forms global alliance for Covid-19 plasma treatment

CSL forms global alliance for Covid-19 plasma treatment

Australia's largest listed company CSL (ASX: CSL) has teamed up with Japan's Takeda Pharmaceutical Company and several international companies to develop a potential hyperimmune therapy for Covid-19.

The alliance formed by CSL Behring and Takeda to work on plasma-derived therapy for the virus now also includes Biotest, BPL, LFB and Octapharma.

Work will start immediately on the investigational development of an unbranded anti-SARS-CoV-2 polyclonal hyperimmune immunoglobulin medicine, which will be aimed at treating individuals with serious complications from Covid-19.

"Leaders lead during uncertainty. There is no question that we are all experiencing the impact of Covid-19," says CSL Behring executive vice president and head of research and development, Bill Mezzanotte.

"This effort aims to accelerate a reliable, scalable and sustainable option for caregivers to treat patients suffering from the impact of Covid-19.

"In addition to pooling industry resources, we will also collaborate with government and academic efforts as a single alliance whenever we can, including important activities like clinical trials. This will make it more efficient in these hectic times for these stakeholders as well."

The collaboration will leverage leading-edge expertise and work that the companies already have underway.  Experts from the alliance will begin collaborating across key aspects such as plasma collections, clinical trial development and manufacturing. Further companies and institutions may join the alliance as well.

"Unprecedented times call for bold moves," says Takeda's plasma-derived therapies business unit president Julie Kim.

"We collectively agree that by collaborating and bringing industry resources together, we could accelerate bringing a potential therapy to market as well as increase the potential supply. We invite companies and institutions focusing on plasma to support or join our alliance," says Kim.

Developing a hyperimmune will require plasma donation from many individuals who have fully recovered from Covid-19, and whose blood contains antibodies that can fight the novel coronavirus.

Once collected, the "convalescent" plasma would then be transported to manufacturing facilities where it undergoes proprietary processing, including effective virus inactivation and removal processes, and then is purified into the product.

Updated at 9:21 AEST on 7 April 2020.


Foodmach and Med-Con team up for 50 million surgical mask goal

Foodmach and Med-Con team up for 50 million surgical mask goal

Two companies from rural Victoria have joined forces to produce tens of millions of urgently needed surgical masks in response to the Covid-19 health crisis.

Shepparton-based Med-Con used to be a major player in the production of surgical masks, but competition from China has led its Australian market share to dwindle to just five per cent over the past decade.

With 5,795 cases of the virus now in Australia and some hospitals reportedly unable to provide masks that fit the doctors who are supposed to use them, the government has requested Med-Con to quickly increase annual production from two million to 50 million surgical masks.

One challenge with this request from the Department of Industry, Science and Technology was that only two of Med-Con's three mask-making machines were operational.

The machines were designed and built nearly 40 years ago, and no original drawings were available to reproduce them.

As part of this time-critical innovation challenge, Australian Defence Force (ADF) engineers disassembled and modelled the non-operational Med-Con machine. Several engineering firms were assessed for competency to reverse engineer and manufacture three new machines.

In came Echuca-based packaging automation manufacturer Foodmach, which has been appointed to engineer and build the new machines.

"Building packaging machinery requires strong expertise in mechanical engineering, electrical systems, pneumatics and motion control," says Foodmach director Peter Marks.

"Our pool of talent across all these fields and our one-stop-shop factory set-up means we can quickly build something new and complex like machines that produce surgical masks."

Marks says reverse engineering is usually a lengthy process that involves a lot of testing and adjustments.

"We have 60 days from start to finish to find ways to build a machine that uses parts which have long been obsolete. Although 3D models have been provided by the ADF, these still need to be detailed on a part by part basis, materials identified and checks made that they'll assembly correctly," he says. 

"There will be knowledge gaps around material specifications and possibly tolerances which need to be resolved. The old design will also need to be updated to current safety, controls, and interfacing standards."

Foodmach's 6,600 square metres of factory and machine shop space in Echuca will allow ts 100-strong team of skilled staff to work around the clock while maintaining enough distance from each other to manage Covid-19 risks.

"Keeping our workforce safe and productive in an epidemic that has the potential to threaten 40-70% of the Australian population is clearly a high priority for us," says Foodmach CEO Earle Roberts.

"Staff will be working in shifts 24/7 during the next eight weeks to meet the deadline.

"Normally with a good set of drawings we'd want 16 to 20 weeks to build something new like this, so to try and complete one machine in eight weeks, and three inside 12 weeks, is a stretch to say the least.

"The complexity of the Med-Con machines will provide us with an exciting challenge. We've obviously never built one before - but with all the necessary design, manufacture and assembly expertise under a single roof, we're well equipped for it.

Updated at 4:21pm AEST on 6 April 2020.


Queensland manufacturer Evolve pivots to mask making

Queensland manufacturer Evolve pivots to mask making

Logan-based Evolve Group has been granted $1.2 million in financial assistance by the Queensland Government to begin producing disposable N95 surgical masks in high volume.

Described by Evolve as "the most important move they've made" the company will soon begin producing 60,000 surgical masks per day at the manufacturing plant.

N95 masks are the highest quality surgical masks available for frontline healthcare workers and can help to filter out fine particles.

The pivot to manufacturing masks is not a drastic leap for the company which has produced a large variety of products for a wide range of sectors since its founding in 2006.

Evolve Group owns brands like plastic manufacturing business Marco Engineering, pool and spa equipment company Poolrite, and 4x4 recovery device TRED.

According to Queensland Premier Annastacia Palaszczuk local production of goods like face mask is imperative both now and into the future.

"We can and we must make these lifesaving products in Queensland," says Palaszczuk.

"We are prepared to back our manufacturers with long term offtake agreements to ensure they keep manufacturing them here."

The Government's partnership with Evolve is not just a short term solution either; Queensland Health and the Department of Housing and Public Works have both agreed to purchase masks from Evolve Group for a three-year period to support the health system.

Logan's Evolve Group is no one-trick-pony, and prides itself on flexibility and responsiveness according to managing director Ty Hermans.

"We have always prided ourselves on our ability to design award-winning products and rapidly solve complex engineering challenges, but this is certainly our most important project - something we have been training for since we started our reshoring mission back in 2006," says Hermans.

"We are proud of our ability to apply our Queensland-based advanced plastics manufacturing facility and skills to a mission-critical project like this, supporting our frontline medical teams and others that are sacrificing so much right now.

"Securing supply of critical products like this by reshoring the manufacturing in Australia has to be a priority for all Australians now and into the future. Being Australian-made also ensures the production of high-quality products."

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Business News Australia


Reece to raise $600m despite strong sales

Reece to raise $600m despite strong sales

Bathroom supplies distributor Reece (ASX: REH) is launching a pre-emptive $600 million capital raising even though trading has been strong and shares are down 27 per cent since late February.

The equity raising will include $170 million committed by major shareholder group the Wilson family, and will be offered at $7.60 per share.

This represents a 12.5 per cent discount to the trading price on Friday.

Proceeds will go towards balance sheet flexibility, increasing liquidity and reducing net debt, as well as supporting business during the current macro-economic uncertainty.

Reece's branches and distribution centres in Australia and the US remain open as plumbing is considered an essential service in both countries.

The group cites a "solid start to the calendar year with strong March quarter sales", with a shift to investment in home comforts, hot water units and repair and maintenance work.

As a result the company hasn't yet seen any material impact from the Covid-19 pandemic, but it notes it is impossible to forecast the future impacts of this health and economic crisis on trading and the supply chain.

In light of this, dividends have also been suspended, implying further erosion of shareholder value while the company offloads 14.1 per cent of its issued capital for the new share.

"Reece has a 100-year history of strengthening the business through tough times the current crisis is no exception," says chief executive officer Peter Wilson.

"We believe that Reece, and the plumbing and construction trades it supports, has an essential role to play in times of crisis.

"We want to continue to run our business with a long-term view, despite the short-term challenges. A more conservative balance sheet will give us the confidence to continue to act on long term objectives for the benefit of our shareholders."

He says the capital raising sets up Reece for the future.

"It will enable us to navigate through this period of uncertainty from a position of strength, and importantly it provides us with the flexibility to accelerate our growth strategy and pursue opportunities that may emerge," he says.

Updated at 11:36am AEST on 6 April 2020.


McGrath closes offices, slashes executive pay in response to Covid-19 uncertainty

McGrath closes offices, slashes executive pay in response to Covid-19 uncertainty

McGrath (ASX: MEA) CEO Geoff Lucas will take a sizeable pay cut as his real estate group embarks on a crisis management plan to save cash.

CEO and board remuneration will be slashed significantly by 40 per cent in May, June and July 2020, while all staff earning above $70,000 per annum will have their salaries cut by 30 per cent.

The company will also be closing certain company offices and immediately ceasing all discretionary expenditure and non-essential spending.

These new measures come in addition previously announced plans to cancel all public auctions and open house inspections.

"As previously announced, McGrath is well equipped to operate in this challenging environment," says McGrath CEO Geoff Lucas.

"We have moved quickly to use the latest technology to conduct online auctions and virtual inspections within the required safety guidelines. The last two weekends has been a good litmus test in terms of illustrating how we can continue to conduct real estate and in many cases multiple bidders participated from the safety of their own homes."

Lucas says McGrath's balance sheet is in a strong position with approximately $10 million in cash and no debt.

"With the support of all our highly valued employees, contractors and agents, we are well equipped to successfully overcome these unprecedented times."

Since early December 2019 McGrath's share price has dived by 51.35 per cent to $0.18 per share.

Updated at 10:56AM AEST on 6 April 2020.

 


SEEK billings fall 60 per cent

SEEK billings fall 60 per cent

Online job postings provider SEEK (ASX: SEK) saw its billings in Australia, New Zealand and Asia (except China) fall 60 per cent in the last week of March, as government responses to Covid-19 impact revenue across all its businesses and markets.

A $110 million sales cut to SEEK's Chinese business Zhaopin announced in February was a precursor of things to come here in Australia, where billing declines accelerated from 40 per cent in the week prior.

It appears year-on-year declines have stabilised around the 60 per cent mark, as the company takes steps to keep customers on board.

For April and May the group will relieve hirers of their minimum monthly ad spend obligations and will only charge them for ads used, while expiry dates will be extended to allow for longer use periods.

The current year-on-year reduction for SEEK ANZ and SEEK Asia is more or less in line with the drop-off seen for Zhaopin in February. 

But the Chinese business - itself a rapidly-growing enterprise until Covid-19 hit - has seen an improvement since then with its billings down just 30 per cent year-on-year in March.

SEEK notes the Chinese market is returning to normal trading conditions and its teams in the country have returned to the office.

"When the pandemic subsides, as it will, job creation will be at the core of economic recovery," says SEEK CEO and co-founder Andrew Bassat.

"This aligns directly with SEEK's Purpose and we are determined to ensure we have the capabilities to help facilitate the economic recovery process in all of our markets."

He highlights staff have been working hard from home to continue rolling out new functionality across the business, while there has been a dual focus on cash preservation and adapting business model to customer needs in this challenging environment.

"The near-term economic challenges will impact SEEK's short-term profitability. They will delay, but not fundamentally change our long-term aspirations.

"Our focus remains on executing against our existing long-term growth strategies and developing new employment and education solutions to meet the needs of our customers in the months and years ahead.

"We expect our long-term focus to unlock large new revenue pools and create significant long-term shareholder value."

The company has deferred its dividend until 23 July and has also released a potential FY20 outcome based on high-level assumptions, which it emphasises is not to be interpreted as guidance.

Under this hypothetical scenario, SEEK would book $1.6 billion in revenue and an EBITDA of $410 million, which would compare to $1.54 billion in revenue in FY19 and $455 million EBITDA in that same period.

Updated at 10:47 AEST on 6 April 2020.

 


Flight Centre to travel on with $700 million capital raising

Flight Centre to travel on with $700 million capital raising

Travel agency Flight Centre (ASX: FLT) is set for a significant dilution of ownership as it looks to raise $700 million in extra capital.

With total transaction value (TTV) sitting at 20-30 per cent of normal levels in March and further declines expected for the coming weeks due to travel restrictions, the Brisbane-based company is prepared to almost double the amount of shares on offer to stay afloat.

Flight Centre plans to issue around 97.2 million new shares at at $7.20 each, representing a 27.3 per cent discount to the last traded price of $9.91 on 19 March before the shares entered a trading halt. 

This compares to 101.14 million shares currently tied up in the company.

Shares have fallen from $39.84 on 25 February, and were trading as high as $65.30 in late July 2018.

The capital raising is fully underwritten by Macquarie Capital and UBS, and will include a $282m institutional placement as well as a $419 million 1 for 1.74 accelerated entitlement offer.

Flight Centre has also secured an extra $200 million in banking facilities, bringing the total up to $450 million.

As revenue streams dry up while the world hunkers down against the Covid-19 pandemic, Flight Centre expects its cost reduction measures - including standing down 6,000 staff and closing half its shops internationally - will result in annualised savings of $1.9 billion.

This translates to anticipated monthly operating cash costs of approximately $65 million, which will be implemented by the end of July. But one-off costs of $210 million will likely be spent to execute the plan.

"Flight Centre has moved to significantly reduce occupancy costs of the remaining retail network, by renegotiating rental agreements with landlords, discussions to date have been positive as FLT has pursued cost savings including rent-free periods and more flexible trading hours," the company said, adding it was also exploring the sale of its Melbourne head office site.

"FLT welcomes stimulus packages that governments throughout the world are delivering to help businesses retain as many workers as possible and overcome the extraordinary trading conditions they are facing.

"Flight Centre welcomes the Federal Government's JobKeeper initiative. The impact of the initiative is still being assessed; however, Flight Centre believes it will receive material support, both in terms of payments and an ability to retain more staff."

FLT says its package of initiatives provides approximately $2.3 billion of liquidity.

Despite travel restrictions and TTV declines, Flight Centre continues to generate some revenues through long-term travel bookings, intra-state and intra-region travel, repatriation services, essential services, government work, aircraft charters and alternative revenue streams.

The company has also continued to win and retain corporate accounts, and has secured contracts with annual spends in the order of $250 million during March 2020.

Managing director Graham Turner (pictured) says government-enforced restrictions are widespread globally and now typically include full bans on international travel, domestic border closures and the forced closures of shops that are not deemed to be providing essential services.

"Together, they mean that our people are currently processing a fraction of the normal volumes at this time of year and the vast proportion of work previously carried out by our people has stopped," he says.

"It is - without question - the most challenging period we have encountered in over 30 years in business and it is inevitable that some businesses across our industry will fail, given the significant loss of revenue that they will be experiencing now and for at least the next few months.

"With this funding in place and additional liquidity, we are in a much stronger position and are well placed to weather a prolonged downturn, which currently seems the likely scenario, and to then take advantage of the significant opportunities that will arise once conditions normalise."

Related story: Grounded Webjet to raise $275 million

Updated at 9:45am AEST on 6 April 2020.


Growers welcome visa extensions to prevent "fruit rotting on trees" during pandemic

Growers welcome visa extensions to prevent "fruit rotting on trees" during pandemic

The fresh produce industry has applauded the Federal Government's decision to temporarily extend visas for vital foreign workers in agriculture and food processing.

The government announced this morning that temporary changes would be made to visa arrangements to help farmers access the workforce they need to secure Australia's food supply during Covid-19.

The changes allow those within the Pacific Labour Scheme, the Seasonal Worker Program and working holiday makers to continue to work in these sectors until the coronavirus crisis has passed.

Temporary visa changes announced today include an exemption from the six-month work limitation with one employer for working holiday makers working in agriculture as well as a further extension of their visa if it is due to expire in the next six months.

"We can't afford to see fruit rotting on trees and vines and vegetables left unpicked. It is vital our farmers maximise their hard work and economic returns," said Deputy Prime Minister Michael McCormack.

"We are acting to enable seasonal workers to extend their stay and remain lawfully in Australia until they are able to return to their home countries.

"The agriculture sector relies on an ongoing workforce and we are committed to providing the means for that to continue while ensuring strict health and safety measures are adhered to, including visa holders following self-isolation requirements when they move between regions."

AUSVEG CEO James Whiteside, whose organisation represents Australia's vegetable and potato growers, says the announcement is a sensible and practical solution for fruit and vegetable growers who rely on a combination of local workers and foreign backpackers.

"The decision to temporarily extend the visas of seasonal workers and backpackers already working on farms in Australia will give growers confidence to plant their crops for the coming season, will help keep local businesses open in regional and rural areas that rely on agriculture to survive, and will ensure that locals, seasonal workers and backpackers alike are able to keep their jobs, work and live safely, and keep the economy running," says Whiteside.

"This is an important outcome for the Australian horticulture industry and demonstrates the value in the sector coming together and collectively advocating on behalf of fruit and vegetable growers towards an outcome that benefits growers, workers and the Australian public.

"Fruit and vegetables help Australians have a healthy, strong immune system and fresh produce is essential to a healthy, well-balanced diet Australians need fresh produce and growers need workers to supply this produce to consumers."

The sentiment was similar at the Australian Fresh Produce Alliance (AFPA), highlighting the sector employs around 80,000 people including significant numbers of Australians, seasonal workers from the Pacific and Timor-Leste, and backpackers from around the world.

"The reality is a number of these workers, particularly those from the Pacific and Timor-Leste are unable to return to their home countries due to travel restrictions," says AFPA CEO Michael Rogers.

"The alternative to the extension of their visa arrangements was leaving these people unemployed in regional communities with minimal access to healthcare.

"Enabling their ongoing employment is a great outcome for workers, farmers and their communities."

The National Farmers Federation (NFF) has developed best practice guidance for farmers regarding requirements for the living and working arrangements of farm workers (either domestic or migrant) during the Covid-19 outbreak.

"We have asked the Chief Medical Officer to review these guidelines and it is critical that they are then considered by the Australian Health Protection Principal Committee," says Minister for Agriculture David Littleproud.

"Sadly, there's been a significant number of Australians who've lost their jobs due to the economic impacts of Covid-19.

"I know some farmers have seen strong interest from job ads and we are keeping market testing requirements in place to ensure recruitment of Australians first."

Whiteside says growers will always have a preference to employ a local workforce.

"But the reality is that our industry relies on international workers to supplement the workers they need that cannot be sourced from the local labour pool," he says.

"he extension of Seasonal Worker Program, Pacific Labour Scheme and Working Holiday Maker visas is a much-needed short-term solution to what will become a larger problem as the ongoing COVID-19 pandemic continues to limit the number of foreign workers who can come to Australia."

Rogers says AFPA members have already put policies and procedures in place to safely manage their workforce and reduce risk of Covid-19 transmission on their farms, packing sheds and in the regional communities in which they operate.

"Food security in Australia relies on a healthy and safe workforce, so AFPA members and all growers are taking this seriously to ensure the continued supply of produce," he says.

Updated at 11:46am AEDT on 4 April 2020.


Government to introduce mandatory commercial tenancy code of conduct

Government to introduce mandatory commercial tenancy code of conduct

Update (7 April): The mandatory commercial tenancies code has been formally announced by the PM. Click here for more

Prime Minister Scott Morrison has today announced a mandatory "give and take" tenancy code will be introduced to help struggling businesses get through the Covid-19 crisis.

Following a tentative draft code that was reached by industry bodies in retail, pharmacy and shopping centres, the National Cabinet has been working on an enforceable code that is close to being finalised. 

Companies wishing to apply for the code to come into force will need to meet the similar conditions as those applying for the JobKeeper package, with a prerequisite that they have experienced at least a 30 per cent drop in revenue. The tenant will also need an annual turnover of less than $50 million.

"If you're in that situation and you're a tenant, we'll be working on a mandatory code of practice to ensure the landlord and the tenant can get through this period, and on the other side be able to go back to business as usual," Morrison said.

"What is important as part of this code is that both parties negotiate in good faith," he said.

The PM says the idea is that the code be incorporated in the state and territory legislation. It should not be prescriptive but ought to follow the proportionality principle.

"The turnover reduction of the tenant needs to be reflected in the rental waiver of the landlord," he said.

"How that is done inside the lease is up to the landlord and the tenant. There are many different ways you can achieve this.

"If for example there was a three or a six-month rental waiver because a lessee or a tenant would have had to have closed their doors, and there's just no money coming in, one way to achieve that is to extend the overall lease by six months on the other side."

Another scenario could be that the parties agree to a different level of rent over the entire term of the lease.

"The banks will need to come to the party as well. The banks are not parties to those arrangements, and so that makes it legally a little more difficult.

"The banks are already moving to providing all sorts of new facilities and arrangements to their customers, and we would expect banks to be very supportive of the agreements reached by landlords and tenants who would be working under this mandatory code."

New measures for backpackers

The Prime Minister announced additional containment measures for backpackers on working holiday visas, whereby those wanting to work in a new area will need to undergo 14 days of self-isolation beforehand.

"There are particular places in the agricultural sector that rely on those workers each year as you go into the seasons either planting or for harvesting or for fruit picking and so on. And it's important that those businesses and those producers are able to continue to conduct their business," he said.

"Of course Australians who want to do that work, then please do get out there and do that work. And there'll be opportunities there for working holiday makers who are looking to engage in those occupations as they regularly do.

"They will be required to self-isolate and to go onto Australia.gov.au, and register for self isolation and do that where they are now for a period of 14 days before they transfer to another part of the country out in a rural or regional area."

He said this measure was being taken to ensure there is no lift-up of the virus moving from metropolitan to rural areas.

"This has been done to ensure that those producers can get the work done, but also to ensure that the communities are protected.

"At the same time working through the states and territories and local governments, we will be working to ensure that the workers' accommodation that will be in those places is also respecting strict health requirements.

"You can't have six backpackers in a caravan up out in rural parts of the country. That's not on. Not going to happen."

Update on results of social distancing measures

The Prime Minister started off his speech today highlighting how if it weren't for the actions taken to date and the virus were allowed to keep spreading at the rate of 12 days ago, we'd be looking at more than 10,500 cases in Australia compared to the current level of 5,315.

"In fact, some commentators who are doing the maths were suggesting that we would have had 8,000 cases just as recently as last weekend," he said.

"That is a tribute to the work that has been done by Australians in getting around and supporting the very sensible measures that have been put in place all around the country by the state and territory governments, but we must continue to do this.

"We need to continue to keep the pressure on. We need to continue to suppress the virus. We are now at single digit rates of growth, but we need to do more."

He said discussions are now focused on a six-month period, but that is no guarantee and the situation could be like this for longer.

"We pray it's shorter, but a six-month period should give people a good indication of what they have to ready themselves in terms of the changes they're making in their daily lives," he said.

"We are in what we described today as a National Cabinet as the suppression phase. We are now In a place where we're seeking to put the pressure down on constraining this virus in Australia.

"We then need to look at the recovery phase which is beyond, and I want to assure Australians that the National Cabinet is very focused on those issues as well."

Chief Medical Officer Brendan Murphy added the number of cases internationally is likely five to 10 times the one million-plus figure that is being reported.

"In Australia we're pretty confident that our testing has been the best in the world," he said.

"The growth rate has been falling, it's about five per cent per day at the moment."

In terms of community transmission, there have been 300 cases in Sydney, 60 in Melbourne and 30 in Brisbane. 

Starting this afternoon the government will be publishing a daily dashboard on Health.gov.au with all the key statistics and data, including a simple summary of key features from the Chief Medical Officer.

Murphy said the government's modelling for the virus' spread will be released next week.

Updated at 2:20pm AEDT on 3 March 2020.


Wearing face masks in public could become new normal in the US

Wearing face masks in public could become new normal in the US

The use of surgical face masks has been the norm in many Asian countries over the last two months, especially in China following the outbreak of Covid-19 in Wuhan.

But for citizens in Western nations like Australia and the United States the concept of leaving the house with a face mask on is still quite an alien concept.

As new information pertaining to how Covid-19 spreads becomes available, the US is considering changing its guidelines around the use of face masks.

According to TIME, The New York Times and the Washington Post, the US Federal Government is expected to advise all Americans to wear cloth masks in public.

Until now US citizens have been told to only wear a face mask in public if they are sick or expressing symptoms of Covid-19. As new concerns arise about Covid-19 spreading by infected people who have no symptoms the Federal Government is considering ramping up its response.

At a White House briefing on Thursday evening US time President Trump told reporters to expect clarification around mask regulations soon.

While the Centres for Disease Control and Prevention is expected to encourage wearing face masks for all citizens Trump says the guidance will be entirely voluntary.

"If people want to wear them, they can," said Trump.

Whether Australia will follow in the footsteps of the US is yet to be clear.

Updated at 12:22PM AEDT on 3 April 2020.


Remote working trend bolsters demand for Superloop

Remote working trend bolsters demand for Superloop

Cloud services connector Superloop (ASX: SLC) has experienced a "significant" increase in traffic across its network in recent weeks as companies take up video conferencing and remote working to ride out the Covid-19 pandemic.

In a letter to shareholders today, chairman and founder Bevan Slattery (pictured) said this rise was particularly the case across Superloop's global IP transit backbone and international networks.

Shares in the company rose 25 per cent to $0.70 this morning by 11:40am AEDT.

Superloop subsidiary SubPartners played a key role in building the INDIGO subsea cable project connecting Australia with Singapore.

"As a result, Superloop expects to realise increased revenues from its wholesale IP transit and international capacity products during this quarter, particularly its Indigo international cable system," Slattery said.

"These new contracts are predominantly multi-year, recurring revenue agreements, structured with high cash contributions, and are able to be provisioned by Superloop within 30-60 days."

The expected increase in revenue has been factored into guidance, which Slattery said was still tracking within the $12-15 million announced on 18 February.

Business hasn't been entirely smooth sailing though, with uncertainty surrounding the company's Guest WiFi and student accomodation clients as a result of social distancing measures and travel restrictions for many international students.

"As foreshadowed in our guidance update on 18 February 2020, for conservatism, we anticipated a potential temporary reduction in Guest WiFi revenues from possible restrictions on international students returning to Australia for their studies and disruptions to international travel," Slattery said.

"With Universities recommencing in late February-early March, Superloop has now been able to quantify the level of that impact to date, which is currently in line with our initial assumptions.

"Since that time, we have seen consistent device activations during the month of March within the student accommodation facilities we service."

He says international student numbers are expected to remain relatively constant, but the number of domestic student numbers using these services may decline as some return to families over the Easter break and decide to undertake distance learning during the next term.

The announcement comes just a day after another Slattery-founded company, NEXTDC (ASX: NXT), embarked on a $672 million capital raising for expansion to support growing demand.

In the early stages of the virus' spread, Slattery's cloud technology company Megaport (ASX: MP1) pre-ordered around six months worth of critical supplies such as optics and transceivers, as well as equipment for planned rollouts for the financial year.

A new subsea cable for Australia

The serial entrepreneur has also recently achieved a milestone for his infrastructure group SUB.CO, which is building a subsea cable to connect Oman to Perth.

Early last month the project entered Contract In Force status (CIF) with its final system connection expected to be completed in December 2021.

At the time, Slattery said the cable manufacturing was expected to begin in April, with installation of the cable and repeaters expected to start in about a year from now.

What makes this project's business case so compelling for him is the fact a lot of internet traffic demand already exists from Europe and the Middle East to Australia.

"This would be the first express route between Australia and Europe," Slattery told Business News Australia, adding it would involve a start-to-finish expenditure of close to US$200 million.

"The real key here is all the cables that come out of Australia to the west, all basically go up through Singapore through the Sunda Straits in Indonesia -  it's pretty shallow through there. Singapore is absolutely the right place to go, but there are no cables to avoid that route.

"And because it's quite shallow for about 1300km, the likelihood of impact is higher."

The big difference with the Oman-Perth cable is that it will run through mostly deep ocean water, making it "the fastest, most secure route", according to Slattery.

"But it also provides redundancy and diversity to the existing investments they have made. This isn't about replacing other routes; this is about complementing other routes," he said.

"SUB.CO is obviously different to Superloop. One of the things we've made sure of is we have a certain upfront commitment from certain customers, which we've been able to secure.

"It's not really about external holders, we've got significant pre-sale capacity that we've already done on this and we're prepared to take the longer term view on the remaining investment, primarily because it will be the only express route from Australia to Europe."

He says for any business that is latency sensitive, the SUB.CO route is the one they'll need to be on.

In that interview in early March, Slattery said he was really excited by Superloop despite some of its challenges recently including the collapse of takeover talks with QIC and a general decline in the share price.

"It's been a difficult couple of years, but we really focus incredibly hard for quite a while to get the business fit. It's much fitter now than it's ever been.

"The infrastructure we've got on Superloop for example is 25, 40, 50-year assets, and people are valuing it on how much you can make within a year or two of an asset going live.

"The ASX at times can be your friend in terms of getting investment for longer term projects...but when people talk about the shorter term, I think having infrastructure assets that are in the growing phase of what they do, the ASX is probably not where you want to be.

Updated at 11:40am AEDT on 3 April 2020.

 


NSW Government announces $10,000 fast relief for small businesses

NSW Government announces $10,000 fast relief for small businesses

Small businesses impacted by Covid-19 shutdowns will receive grants of up to $10,000 under a new assistance scheme announced by the NSW Government this morning.

The State Government will add $750 million into the Small Business Support Fund as part of a third wave of stimulus measures.

The grants will go to small businesses like restaurants, venues, gyms and bars that have been forced to shut because of social distancing measures imposed by the Federal Government.

To be eligible businesses will need to:

  • Have between 1-19 employees and a turnover of more than $75,000;
  • Have a payroll below the NSW Government 2019-20 payroll tax threshold of $900,000;
  • Have an Australian Business Number as at 1 March 2020, be based in NSW and
  • employ staff as at 1 March 2020;
  • Be highly impacted by the Public Health (COVID-19 Restrictions on Gathering and
  • Movement) Order 2020 issued on 30 March 2020;
  • Use the funding for unavoidable business costs such as utilities, overheads, legal
  • costs and financial advice;

Applications will be available within a fortnight and remain open until 1 June 2020.

The fund mirrors the approach taken by the NSW Government in the wake of the Australian bushfire crisis earlier this year which provided $42 million to 4,200 businesses within the first ten days of launching.

"This is about getting cash into small businesses when they are struggling right now in the face of an unprecedented situation," says NSW Premier Gladys Berejiklian.

"These grants will provide a big boost, and we will make the application process easy to ensure small businesses can receive some cash-flow as soon as possible to meet pressing needs."

The $750 million grant program adds to a suite of stimulus initiatives announced by the NSW Government over the past fortnight including:

  • More than $5 billion in payroll tax waivers, deferrals and other tax deferrals;
  • A $1 billion Working for NSW fund to create jobs;
  • $700 million in additional funding for the health system;
  • $250 million to bring forward capital works and maintenance on public assets;
  • $500 million to bring forward capital works, maintenance and shovel ready
  • infrastructure projects;
  • $80 million to waive a range of fees and charges;
  • $80 million to help the vulnerable through a range of measures.

The measures come as Australia records 5,315 confirmed cases of Covid-19.

At the time of writing there are 179 new confirmed cases of the virus. Yesterday there were 272 new confirmed cases, down from 303 on Wednesday.

NSW has the bulk of the total cases with 2,389 confirmed Covid-19 results, followed by VIC with 1,085, QLD with 873, WA with 400, SA with 385, the ACT with 87, TAS with 74 and the NT with 22.

Updated at 11:33AM AEDT on 3 April 2020.


Servcorp stands down staff, suspends market guidance

Servcorp stands down staff, suspends market guidance

More than 100 team members at workspace provider Servcorp have been stood down as the company comes to terms with the Covid-19 economic reality.

In addition to the stand downs, the majority of remaining team members have agreed to reduce their salary by 20 per cent.

This includes non-executive directors who have also agreed to a reduction of fees by 20 per cent, while longstanding CEO Alf Moufarrige will see a 50 per cent pay cut.

Given the current uncertainty and market volatility, Servcorp has decided to suspend current guidance.

The group has also eliminated all discretionary spending to keep operational costs to a minimum.

"We are working through the exact impacts on our global footprint but we anticipate, and are planning for, a significant but temporary reduction in serviced office occupancy and coworking utilisation, with some offset from our virtual office products," says Servcorp.

"Our priority in any crisis is the health and safety of our people, and that of our clients who utilise our locations globally."

The company says it is working with landlords, teams, and clients to minimise costs across the business.

Servcorp's Landlords so far are favourably considering rent reductions to mitigate to some degree rising vacancies and small business' inability to fulfil their obligations under lease agreements.

The company has no external debt, but despite this Servcorp has suspended all capital expenditure programs at this time.

"Servcorp has proven, over more than forty years of its existence, to be a robust business, and this remains the circumstance today," says Servcorp.

"We are confident that Servcorp will emerge from the Covid-19 crisis in a financially sound position and full of determination."

Updated at 10:06AM AEDT on 3 April 2020.

 


Retail Food Group frustrated by lack of landlord compassion

Retail Food Group frustrated by lack of landlord compassion

Retail Food Group (ASX: RFG) has come out swinging against its commercial landlords claiming an inherent power imbalance makes the process of negotiating rent relief impossible.

According to RFG executive chairman Peter George the company is frustrated by the lack of progress when dealing with landlords and the unwillingness he has seen from lessors to provide meaningful assistance.

This is despite the Federal Government encouraging landlords and tenants to come to agreements and a national Code of Conduct crafted by The National Retail Association (NRA), Australian Retailers Association (ARA), the Pharmacy Guild of Australia (PGA) and the Shopping Centre Council of Australia (SCCA) intended to give landlords and tenants some guidance.

"The National Cabinet has encouraged landlords and tenants to engage and agree on commercial arrangements that can see both through this crisis, and has provided a list of principles which should underpin those discussions," says George.

"Whilst the key elements of this guidance are conceptually sound, they fail in terms of practical application due to the significant power imbalance which exists in favour of landlords. In reality, it is our experience that tenants have very limited bargaining power to drive meaningful and timely outcomes in these circumstances."

Further, the chairman says landlords simply deferring payments of rent for RFG's franchisees, who run food and beverage outlets like Gloria Jean's, Brumby's, Pizza Capers and more, will only serve to delay a significant financial impact.

"It is abundantly clear that the reduction in foot traffic attributable to government restrictions intended to combat the coronavirus has materially reduced the benefit otherwise derived by RFG and its franchisees from their leases within shopping centres," says George.

"Deferral of rent in these circumstances is simply unacceptable, and will achieve nothing for our franchise network other than to delay the adverse financial consequences arising from the current situation."

Ultimately, George believes the Federal Government must step in to address the considerable uncertainty faced by retail tenants nationwide.

"Where the government's objective is to hibernate business so that it is able to contribute to restarting the economy and preserve jobs, RFG considers that robust and urgent government intervention is necessary to address fixed cost bases such as occupancy costs, and limit the uncertainty that is necessarily influencing current decision making," says George.

The plea for government intervention comes as Retail Food Group announced around 90 domestic franchisees have chosen to temporarily close their stores.

The main impact on franchisees has come from a lack of foot traffic in stores as the population dutifully self-isolates.

The situation is most evident in shopping centres where RFG franchisees have experienced 50 per cent reduction in customer count.

Ultimately franchisees have seen a consistent and increasing decline in revenues compared to this time last year and have shut up shop because trading conditions have become untenable.

Internationally temporary closures because of government restrictions have increased to 481, with a further 141 outlets limited to take-out orders. Just 51 outlets continue to operate normally but are subject to increasingly difficult trading conditions.

RFG has implemented a number of measures to support franchisees and preserve the long-term sustainability of its network.

"The steps we have taken differ by brand system, are directed at those franchisees most in need, and include the waiver or reduction of certain fixed and percentage based fees, waiver of fixed royalty and or marketing levy 'floors' so that these are calculated solely by reference to a percentage of, albeit declining, sales, and the deferment of outstanding debt and RFG provided finance," says George.

The trading update comes just days after the group announced it would be standing down or reducing the working hours of the majority of its staff.

RFG employs around 500 people directly, but there are thousands of staff employed by its franchisees around the country.

The company does not actively track the total number of staff employed by the franchisees themselves. However, in a submission to the Franchising Code of Conduct Inquiry, which released its findings in March last year, the company claimed the network employed approximately 15,000 team members across the country.

Shares in RFG are down 11.36 per cent to $0.04 per share at 3:28PM AEDT.

Updated at 4:55PM AEDT on 2 April 2020.


Free childcare for working families

Free childcare for working families

The Federal Government has today announced an extra $300 million in subsidies to allow free childcare for working parents and carers, adding to existing support schemes and $1 billion from the JobSeeker package to assist wages in the sector.

Normally the fees paid to childcare centres are split between the Commonwealth Childcare Subsidy (CCS) and parents.

But today the government has announced it will pay 50 per cent of the sector's fee revenue up to the existing hourly rate cap, which will be based on a point in time before parents started withdrawing their children in large numbers.

The sector would have received an estimated $1.3 billion if current revenues and subsidies had continued, but now that has been lifted to $1.6 billion. 

Childcare eligibility will no longer be means tested and the new measures are expected to assist one million families Australia-wide, not just with traditional childcare and early learning services but also after-school care and vacation care. 

The initiative is designed to ensure anyone with a job can continue to work without needing a trade-off with their family's wellbeing, while also ensuring doors remain open for the sector's 13,000 child care and early learning services

"Relief is on its way for around a million Australian families and thousands of early learning educators and carers," Prime Minister Scott Morrison said, emphasising we would likely be dealing with coronavirus-related restrictions and challenges for the next six months. 

"These services are vital for so many parents so they can provide for their family, and children need as much familiarity and continuity as we can help provide at this unsettling time.

"Priority will be given to working parents, vulnerable and disadvantaged children that need early education more than ever and parents with pre-existing enrolments."

The new system will see payments start flowing at the end of next week. The system will be reviewed after one month, with an extension to be considered after three months. The payments will be paid in lieu of the Child Care (CCS) and Additional Child Care Subsidy payments.

Minister for Education Dan Tehan said the assistance package would ensure services remained open to serve families that needed to work and support vulnerable children.

"The Federal Government is working with states and territories and the sector to minimise the impact of coronavirus," Tehan said.

"This package will help support families during these difficult times, particularly those who have lost their job and are doing it tough.

He said until payments arrive the government would be allowing services to waive gap fees for families who keep their children home, and families will be able to use the 20 extra absence days the government has funded for coronavirus-related reasons without giving up their place in a child care centre.

"If you have terminated your enrolment since 17 February, then I encourage you to get back in contact with your centre and re-start your arrangements," he said.

"Re-starting your enrolment will not require you to send your child to child care and it certainly won't require you to pay a gap fee. Re-starting your enrolment will, however, hold your place for that point in time when things start to normalise, and you are ready to take your child back to their centre.

"We will also make payments of higher amounts available in exceptional circumstances, such as where greater funding is required to meet the needs of emergency workers or vulnerable children."

There is a range of government assistance available to early learning and child care operators. Most services operate as small businesses, with 79.9 per cent of providers operating a single service, while 95.9 per cent operating fewer than five. The available assistance includes:

  • The $130 billion JobKeeper payment;
  • A cash flow boost of at least $20,000 and up to $100,000 with payments equal to 100 per cent of businesses' and not-for-profits' salary and wages withheld; and
  • Loan guarantees so businesses can get working capital.

National Cabinet is also considering short-term intervention for commercial tenancy arrangements.

Updated at 1:59pm AEDT on 2 April 2020.


NSW social distancing powers will last until end of June

NSW social distancing powers will last until end of June

The battle to flatten the Covid-19 infection curve is far from over, with NSW Police Commissioner Mick Fuller (pictured) announcing the state's strict social distancing measures will be in place for 90 days.

The commissioner told a press conference he won't be seeking an extension at the end of that period and "hopefully people will have gotten the message by then".

Fuller noted there had been three tickets issued in the previous 24 hours relation to isolation.

"Four men in a park drinking alcohol [is] not exercise. Three of the men left, one refused to go, he got a $1,000 ticket. I think it's entirely appropriate," he said.

"I'm reviewing all of these tickets personally, which would never happen again for any other time, and I'll continue to do that and if I think it's unreasonable it will be withdrawn immediately and we will make personal contact.

"But police are out there, we're doing our best to protect the community in a very different way than what we normally do."

He called on the community to work with police and understand they are trying to slow the spread of the virus by minimising unnecessary contact.

"The safest place is at home in isolation, and of course there are lots of carve-outs for people who need to work and we want you to go to work," he said.

"There's been a lot of questions about exercise and I get it, we want people to be able to say fit and physically and psychologically healthy, and we're trying to make sensible decisions in relation to that.

"But of course, if I said it's OK to sit on a park bench then everyone's going to go to the park, and we're going to end up back where we started."

The commissioner explained 500 more people were expected to arrive in the state from overseas today - more than expected, and including military personnel would would go into isolation just like all other arrivals.

There were 116 new cases of Covid-19 reported in NSW in the past 24 hours, taking the state total to 2,298.

Nationwide there are now 5,103 confirmed cases of the virus (NSW 2,298; VIC 1,036; QLD 835; WA 392; SA 367; ACT 84; TAS 72; and NT 19) and there have been 23 deaths.

Yesterday the new national case count was marginally lower at 303, and it is already at 239 today before lunchtime with several parts of the country yet to issue their updated numbers.

Updated at 11:38am AEDT on 2 April 2020.


Radio Rentals to close all stores

Radio Rentals to close all stores

All 62 Radio Rentals stores nationally will close tomorrow until further notice in light of Covid-19 restrictions.

Thorn Group (ASX: TGA), Radio Rentals' parent company, says its focus is on protecting the health, safety and welfare of customers, team members, and the greater public.

"The decision to close the stores is a result of government's moves to limit the spread of the Covid-19 virus across Australia," says Thorn Group.

Radio Rentals' online store will continue to operate through the Covid-19 disruptions with the support of the company's back office customer service staff.

Shares in Thorn Group are down 11.54 per cent to $0.05 per share at 10:40am AEDT.

Updated at 11:01am AEDT on 2 April 2020.


CSIRO starts pre-clinical trials for potential Covid-19 vaccines

CSIRO starts pre-clinical trials for potential Covid-19 vaccines

The first stage of testing Covid-19 vaccine candidates has commenced at CSIRO's high-containment biosecurity facility in Geelong today.

The testing, which is expected to take around three months, is being conducted in partnership with the Coalition for Epidemic Preparedness Innovations (CEPI) - a group that aims to derail epidemics by speeding up the development of vaccines.

In consultation with the World Health Organisation (WHO), CEPI has identified vaccine candidates from the University of Oxford and Inovio Pharmaceuticals to undergo the first pre-clinical trials at CSIRO, with further candidates likely to follow.

"Beginning vaccine candidate testing at CSIRO is a critical milestone in the fight against COVID-19, made possible by collaboration both within Australia and across the globe," says CSIRO chief executive Dr Larry Marshall.

"CSIRO researchers are working around-the-clock to combat this disease which is affecting so many whether it's at the Australian Animal Health Laboratory (AAHL) or at our state-of-the-art biologics manufacturing facility we will keep working until this viral enemy is defeated."

While the focus of the testing program will focus on how effective the vaccines are against the coronavirus the CSIRO is also investigating the best way to administer the vaccine for better protection, whether that be an injection or via a nasal spray.

The CSIRO's work on Covid-19 goes back all the way to January when CEPI engaged the Australian organisation to start researching the virus SARS CoV-2 which causes the disease Covid-19.

Director of AAHL and the leader of the CSIRO's Covid-19 virus and vaccine program Professor Trevor Drew says the team is now in the best position to begin vaccine trials.

"We have been studying SARS CoV-2 since January and getting ready to test the first vaccine candidates as soon as they are available," says Professor Drew.

"We are carefully balancing operating at speed with the critical need for safety in response to this global public health emergency."

CSIRO's COVID-19 research so far:

  • CSIRO was the first research organisation outside of China to generate sufficient stock of the virus using the virus strain isolated by the Doherty Institute to enable pre-clinical studies and research on COVID-19.
  • CSIRO successfully established a biological model in February 2020, the first in the world to confirm ferrets react to SARS-CoV-2. Researchers have quickly progressed to studying the course of infection in the animals a crucial step in understanding if a vaccine will work.
  • CSIRO researchers confirmed, after studying SARS CoV-2's genomic sequence that the virus is presently changing into a number of distinct 'clusters' and are now starting to look at how this may also impact on the development of a vaccine.

Updated at 10:20AM AEDT on 2 April 2020.


Profiteers could face jail under new Government regulations

Profiteers could face jail under new Government regulations

The Federal Government has introduced a raft of measures aimed at dissuading the export and price gouging of items considered "essential" in the fight against Covid-19.

Minister for Home Affairs Peter Dutton says these practices needs to stop, and the Government has stepped in by introducing tough penalties for those attempting to rip off Australians in need.

"We have acted decisively to address concerns about the hoarding and profiteering of essential goods, such as personal protective gear, disinfectants and other medical products and have introduced tough penalties for price gouging," says Dutton.

"These temporary measures will ensure that essential goods are distributed to those with the highest need, such as vulnerable communities, front line health workers and law enforcement, while safeguarding legitimate trade."

As reported by The Daily Telegraph, changes to the Customs (Prohibited Exports) Regulations 1958 include potential jail sentences of up to five years for those caught exporting essential goods or selling these goods for exorbitant prices.

Minister for Health Greg Hunt has also made a determination under the Biosecurity Act 2015 to allow the Border Force to add essential goods already in their custody to the National Medical Stockpile.

As the practice of price gouging becomes a worry for the Government, Minister Hunt has introduced a requirement that will crack down on those attempting to extort Australian consumers.

The Health Minister's requirement prevents a person who has purchased essential goods at retail on or after 30 January 2020, and for the duration of the human biosecurity emergency period, from selling or offering to sell these goods for more than 120 per cent of the price for which they were purchased.

This measure will not apply to manufacturers or legitimate business activities, ensuring that it does not apply to key suppliers that are vital to maintaining Australia's supply chains.

Where individuals have been found to be engaging in 'price gouging', they will also be required to surrender the essential goods to the Australian Federal Police for provision to the National Medical Stockpile, or destruction if the goods are defective.

"These measures have become necessary because we have seen a small number of individuals engaging in the bulk purchasing of essential goods from retail outlets in Australia, with the intent of profiteering from exploitative exporting and price gouging," says Dutton.

"These goods are essential to preventing the spread of COVID-19."

Updated at 4:32PM AEDT on 1 April 2020.


Grounded Webjet to raise $275 million

Grounded Webjet to raise $275 million

Update (2 April): The institutional component of the offer was oversubscribed raising $231 million. When the retail component of the offer is completed, Webjet is expected to have raised a total of $346 million.

Travel company Webjet (ASX: WEB) hopes a $275 million equity raise will help the group survive the next few months as Covid-19 continues to disrupt tourism globally.

Webjet says proceeds of the raise will be used to strengthen its balance sheet and are expected to be enough to cover operating costs and capital expenditure through to the end of 2020.

The raise, at an offer price of $1.70 per new share (a discount of 32.2 per cent), includes a fully underwritten placement to raise $101 million and a partially underwritten entitlement offer to raise between $174 million and $231 million.

Approximately 195.1 million new shares will be issued under the offer, more than doubling the amount of shares currently issued in the company (135.6 million shares).

New shares will rank equally with existing shares but will not be entitled to the dividend for the six months ended 31 December 2019.

"This equity raising importantly positions Webjet to weather the severe disruption caused by COVID-19 to the travel industry," says Webjet managing director John Guscic.

"Equally significantly, travel is a core part of life and as the travel landscape recovers, this equity will help the company emerge in a strong position relative to its competitors."

To manage the near-term financial impact of Covid-19 Webjet has taken a number of steps to cut costs including reducing board and executive remuneration, deferring the 1H20 dividend payment, making over 440 staff redundant, reducing the working week to four days, and freezing all non-essential spending (including travel, hiring, consultants, contractors, etc).

These initiatives are expected to result in cash flow savings of around $13 million per month, with further cost reduction plans available if the Covid-19 situation drags on longer than six months.

Post-coronavirus Webjet believes its WebBeds hotel booking platform will be in a position to consolidate a larger share of the market should smaller competitors come under financial strain.

As for its main business, the flight booking platform, Webjet says it is well placed to capture the pick-up in travel activity once Covid-19 passes.

"When travel activity begins to normalise, it is expected to occur at various points in time and in different regions due to differences in timing and severity of the impact of COVID-19 in each region," says Webjet.

"As other regions are reaching their peak rates of infection, China is slowly beginning to see early signs of normalization hotel bookings in the week to 1 March 2020 increased 40 per cent over the previous week, while peak daily bookings for domestic flights were up 230 per cent from the lowest level recorded in February."

The Covid-19 crisis has already forced Webjet to withdraw its earnings guidance of between $147 million to $165 million.

Updated at 3:16PM AEDT on 1 April 2020.


Twiggy Forrest's foundation commits $160m for medical supplies

Twiggy Forrest's foundation commits $160m for medical supplies

Mining magnate Andrew 'Twiggy' Forrest's Minderoo Foundation will donate up to $160 million to address Australia's extreme shortage of personal protective equipment (PPE), with the first plane loaded with supplies on its way to Perth today.

The foundation has joined forces with Fortescue Metals Group (FMG) - which is 30 per cent owned by Forrest's Minderoo Group - to procure and distribute the life-saving medical supplies and equipment.

The first flight was due to depart from Shanghai today, with two more flights are due to arrive on Friday and Saturday this week. Together they are expected to bring more than 600 cubic meters of supplies with a total weight of more tha 90 tonnes.

This includes more than one million N95-equivalent face masks, 400,000 surgical masks, 2.3 million medical-grade gloves, 100,000 nasal swabs, 200,000 medical coveralls, 10,000 medical goggles, 5,000 touch-less thermometers and over 33 ICU grade ventilators.

Forrest says Fortescue's deep and enduring relationships with China are what allowed the foundation to supercharge procurement efforts, on behalf of and in collaboration with the Western Australian and Federal Governments.

"Unprecedented times cannot be met with a precedented response," says Forrest.

"The trusted relationships, procurement expertise and logistics knowledge of the FMG and Minderoo Foundation teams, have been fundamental in rapidly securing this vital equipment."

He says the country is facing a threat not seen in our lifetimes.

"China's Ambassador to Australia, His Excellency Ambassador Cheng, and the Chinese people have been great mates to Australia," says Forrest.

"They are now doing all they can to help us in our hour of need. I thank the People's Republic of China for protecting our critical medical orders in the face of intense pressure from other nations.

"Without this, there would be no plane loads of equipment that we celebrate today for our first responders and suffering Australians."

Minderoo Foundation co-chair Nicola Forrest says the equitable distribution of supplies will be coordinated with WA Health across key stakeholders in primary and aged care, private and public hospital systems, and other front-line services based on the areas of greatest need.

"We are working with the WA Government, the Australian Medical Association (AMA), WA's private hospitals, National COVID-19 Coordination Commission, National Incident Room and Aspen Medical to determine how we can best meet projected surges in demand for critical supplies," she says.

WA Health Minister Roger Cook has thanked Minderoo Foundation and Fortescue for their "extraordinary support" in finding these "incredibly difficult to obtain supplies" for WA's broader health system, other stakeholders and frontline staff.

"To allow this generous commitment to continue to scale, the WA Government will reimburse Minderoo Foundation at cost for the supplies purchased so that Minderoo Foundation can further leverage its incredible commitment of up to $160 million over the coming weeks and continue to source these critical medical supplies for Australia," says Cook.

Updated at 3:46pm AEDT on 1 April 2020.


Brisbane car engineering firm changes gear to develop ventilator

Brisbane car engineering firm changes gear to develop ventilator

Brisbane-based Triple Eight Race Engineering is steering its manufacturing skills in a new direction in response to the increased strain on the health sector due to the Covid-19 pandemic.

The company's engineering team has developed a low-cost ventilator prototype with input from medical professionals, local intensive care unit experts and the Queensland Department of State Development.

"We were able to utilise in-house 3D printing services provided by our team partner HP and we believe the ventilator could be put into production within a short space of time but we are now continuing development with the help of the Department to improve our unit further," says team principal Roland Dane.

"The Department of State Development have helped us identify and build supply chains for required componentry and ventilator accessories such as alarm circuitry, tubing and masks.

"This is very early days, and we have to make sure all regulatory requirements are met, but we stand ready to help in whatever way we can."

Minister for State Development, Manufacturing, Infrastructure and Planning Cameron Dick says the local race car company has been working around the clock for the past two weeks to develop the prototype.

"This is what Queensland manufacturing is all about. Hard work, ingenuity and solving problems," says Dick.

"It's so impressive that, within just a few weeks, this company has transitioned their capability, intellect and resources to a product that could ultimately save lives."

The minister says it is also fantastic to hear Triple Eight has focused on using readily available, local materials.

"Triple Eight suspended its usual operation following the cancellation of the Australian Grand Prix, and the positive, forward-looking approach of this company has been heartening to see," he says.

"I'm so proud of the innovation and agility of my team, and what we can do when we put our minds to it," adds Dane.

Leanne Linard, Member for Nudgee says the prototype is a wonderful initiative by a great local company.

"While there is still a long way to go, I know the engineering capability at Triple Eight is second to none," she says.

"It's great to see so many local companies stepping up at this time."

Deputy Chief Medical Officer Dr Nick Coatsworth says the country currently has 2,200 ventilated beds and is aiming for 7,500. Companies like ResMed (ASX: RMD) have also risen to the challenge.

Updated at 1:32pm AEDT on 1 April 2020.


Agri-exporters receive $110m air freight boost

Agri-exporters receive $110m air freight boost

An explosion of freight costs for agricultural goods and limited capacity have prompted the Federal Government to put forward $110 million to help agricultural and fishing exporters reach export markets.

Deputy Prime Minister Michael McCormack says the International Freight Assistance Mechanism will help secure freight flights into Australia's key export markets, with an initial focus on China, Japan, Hong Kong, Singapore and the UAE.

The package will apply to freight leaving Melbourne, Sydney, Brisbane and Perth, with flights to return loaded with vital medical supplies, medicines and equipment.

In parallel, the government will inject an extra $49.8 million into the Export Market Development Grants (EMDG) program for the remainder of this financial year - a scheme that applies to exporters generally as well as the tourism sector.

Meanwhile, fisheries will have around $10 million in levies waived for the remainder of 2020.

"We are doing everything possible to help our high-value agricultural and fisheries exporters get their produce on airplanes and into overseas markets," says McCormack.

"This will help restore key freight routes for our farmers until commercial capacity can be restored again.

"Everything we are doing as a Government in response to this pandemic is focused on saving lives and saving livelihoods and we know our agriculture industry is key to this."

Federal Trade Minister Simon Birmingham says the Covid-19 pandemic has led to major air freight shortages and had disrupted supply chains around the world.

"This temporary action will help Australian producers to protect the jobs of those who rely upon Australia's export of safe, quality food into the world," says Birmingham.

"Getting our export sector back on its feet is crucial to reduce job losses through the crisis and a critical part of the ultimate economic recovery.

"By getting flights off the ground, full of Australian produce, we're supporting our farmers and fishers who have been hit hard by this crisis."

Federal Agriculture Minister David Littleproud says this initiative will focus on high-demand agricultural and fisheries exports that have been hit hard by the Covid-19 crisis.

"We're backing our farmers by making sure they can get more of their high-quality product into overseas markets," says Littleproud.

"The more agricultural exports we can secure, the more regional jobs we can protect.

"We've seen an explosion in costs of exporting agricultural goods under the belly of planes because of the sheer lack of numbers. The reality is this is a subsidisation; it will not pay for all of it."

He adds Australians should take comfort in knowing the country can not only produce enough food for ourselves here through this crisis, but we can continue to supply the rest of the world.

"This is about showcasing Australian agriculture as not just having the best produce in the world, but also being one of the most reliable suppliers in the world," he says.

"There's a calm confidence out there. The Australian agriculture sector is just getting on the job calmly and methodically producing the best food and fibre in the world - we've got to continue to make sure that supply chains are kept open.

"Farmers still need to make a living. We're a nation of 25 million people who produce enough food for 75 million, so our farmers can't stop exporting. People shouldn't panic about the fact that Australian produce is going around the world - it's a good thing."

Assistant Minister for Forestry and Fisheries Jonno Duniam explains the fishing industry was one of the first hit when access to China was cut off in January, bringing many in the industry to their knees.

"Unlocking key international markets will get thousands of fishers, divers, deckhands and processors back on the job, and the levy relief will help to keep fishers financially afloat," says Duniam.

"Our seafood industry has been built on the back of some of the toughest and most resilient Australians, and this assistance will ensure that the sector can build a bridge to recovery."

The $110 million package will come from the Federal Government's $1 billion Relief and Recovery Fund.

Market Development

It is one thing to get agricultural products to market, but cultural differences and supply chain structures mean Australian produce won't necessarily be top of mind for foreign nations grappling with their own health crises due to the pandemic.

This means marketing will be essential.

The additional $49.8 million for the market development program will allow exporters and tourism businesses to get additional reimbursements for costs incurred in marketing their products and services around the world.

"We recognise the current COVID-19 crisis is placing immense pressure on Australian exporters and tourism businesses, many of whom felt the earliest and deepest aspects of the economic downturn," says Trade and Tourism Minister Simon Birmingham.

"This funding injection will put more cash in the pockets of thousands of Australian businesses when they need it most.

"The EMDG scheme has been a popular vehicle to support the costs associated in reaching new markets, and this additional funding will give Australian exporters and tourism businesses extra help in these tough times."

The minister explains businesses who have spent their own money to market and grow Australian exports get back up to 50 per cent of their total eligible marketing expenses.

"This investment addresses the reality that businesses invested in good faith to lift Australia's exports, but are unlikely to see immediate return on those investments. These entrepreneurial and outward looking businesses will be crucial to our future economic recovery," he says.

"This extra $49.8 million to supplement the additional $60 million already committed by the Morrison Government will bring EMDG funding to its highest level in more than 20 years at $207.7 million for the 2019-20 financial year.

"This support is in addition to other measures our Government has announced to help small and medium businesses manage cash flow challenges and retain employees such as increasing the instant asset write-off, cash payments of up to $100 000 and supporting apprentices."

Any business which has incurred eligible EMDG expenses for promotional activities in 2019-20 financial year will be able to seek reimbursement for 50 per cent of these expenses without the Export Performance Test applying, when they apply from July 1.

This is in recognition that many exporters would have spent more on marketing expenses with the expectation they would see export income high enough to meet the export performance test.

More than 200 businesses that will benefit from this change are in the tourism sector, one of the hardest hit sectors of the economy.

Additionally, applications lodged in the 2020-21 financial year can claim expenses even if events have been cancelled due to circumstances beyond a company's control.

Photo: Australian Table Grape Association 

Updated at 12:00pm AEDT on 1 April 2020.


R.M.Williams shuts down Adelaide workshop

R.M.Williams shuts down Adelaide workshop

Iconic Australian apparel brand R.M.Williams has been "stopped in its tracks" by the Covid-19 crisis and forced to shut down all production at its South Australian workshop.

Effective today its workshop in Salisbury, Adelaide, will be closed until further notice, resulting in the standing down of 709 employees.

The company says it is working closely with the South Australian Government to navigate through the financial crisis to ensure it comes out the other end.

R.M.Williams, famous for its leather boots and majority owned by Singapore-based private equity firm L Catterton backed by luxury retail conglomerate LVMG, closed all of its stores and Boot Rooms in Australia, the US, UK and New Zealand on 28 March.

To support its staff the company will be offering all 709 permanent and part-time Australian team members two weeks salary, as well as encashment of accrued annual leave.

Founded in Adelaide in 1932 R.M.Williams has survived its fair share of crises; it has been through the worst of World War II and has continued to operate ever since.

"Now, 88 years later, the Covid-19 crisis has stopped us in our tracks," says R.M.Williams.

"At this moment in these unprecedented times, it is hard to see past the headlines and understand what lies ahead. Australia, and central to that fabric, R.M.Williams, has shown through the decades and through recent times with the drought and bushfires that we are a people who adapt through tenacity, perseverance and a pioneering spirit."

"We will always represent the Australian bush and the spirit of Australia."

 

 

The company's customer service team will remain available to field enquiries regarding boot repairs, online services and Made to Order and R.M.Williams' online store continues to be open for business.

While R.M.Williams has made the decision to close down its workshop, fellow iconic Australian brand Akubra says it will continue to work during the crisis.

"We are proudly still manufacturing the Australian Army Slouch hat in these tough times the world is facing," says an Akubra spokesperson.

Updated 11:31AM AEDT on 1 April 2020.

 


News Corp to suspend 60 community print publications

News Corp to suspend 60 community print publications

A rapid decline in advertising revenue has forced News Corp to suspend 60 community titles in NSW, Victoria, Queensland and South Australia as of 9 April.

In an announcement yesterday the company said community mastheads would continue to publish digitally, with reporters and photographers expanding News Corp's hyper-local news coverage for consumers across Australia.

News Corp Australasia executive chairman Michael Miller said the decision to suspend printing of its community newspapers was not taken lightly.

"The suspension of our community print editions has been forced on us by the rapid decline in advertising revenues following the restrictions placed on real estate auctions and home inspections, the forced closure of event venues and dine-in restaurants in the wake of the Coronavirus emergency,' he said.

Miller noted as consumers increasingly turned to digital for local news, News would be increasing and developing its community coverage.

He said the impact on community print titles came on top of the toll on media from the refusal of digital platforms to pay publishers to use their content.

For now, the group's top priority is to preserve jobs and best position itself to counter the crisis.

"During this unprecedented time it is imperative that we reduce costs while continuing to keep the community informed and doing all we can to retain jobs," he said.

"The print suspension will allow us to assess the shape of the market itself and future conditions, taking into account how the Coronavirus situation unfolds in the coming period."

The announcement follows Elliott Newspaper Group's decision last week to suspend its traditional newspaper publishing in Mildura, Swan Hill and Kerang in response to the pandemic, as reported by the Sunraysia Daily - one of the mastheads affected along with Sunraysia Life, The Guardian - Swan Hill, Gannawarra Times and Loddon Times.

Elsewhere, News Corp's parent company in the States has reached a deal to sell its News America Marketing business to Charlesbank Capital Partners for US$235 million.

Updated at 11:14am AEDT on 1 April 2020.


Rex returns to Queensland skies after State Government performs a barrel roll

Rex returns to Queensland skies after State Government performs a barrel roll

Regional airline Rex (ASX: REX) will resume services in Queensland after the State Government caved in to the carrier's force majeure declaration.

A last minute intervention from the Queensland Department of Transport and Main Roads (TMR) will allow Rex to resume full services in Queensland from today, with a reduced schedule to come into place from tomorrow.

While a final agreement between the TMR and Rex has not yet been reached, the airline says it will continue to run the reduced schedule in good faith until 8 April.

If a final agreement cannot be reached Rex will once again suspend all of its services in Queensland.

The change of heart from the Queensland Government came after Federal Minister for Agriculture, Drought and Emergency Management David Littleproud called upon the Queensland Premier to "show leadership and sit down with Rex".

"The people in remote towns like Birdsville and Bedourie need access to medicine and medical services," said Littleproud.

"The communities of Charleville and Cunnamulla should have the right to the same essential services as those in Brisbane.

"This is not an inconvenience, this is dangerous. The State Government has got to find some way of keeping Rex in the air and keeping regional and rural Queenslanders safe."

The airline first announced it would be pulling all services from Queensland yesterday morning, blaming a lack of State Government support for the shutdown of all services in the State.

The proposed shutdown was going to take place despite a sizeable $198 million support package for Australia's regional air networks which are struggling to stay airborne because of the Covid-19 crisis.

Because the funding from the Federal Government would only to cover one return weekly flight per route for regional airlines Rex said it would be unable to continue operating in Queensland without State Government support.

Rex will continue to service its remaining network in Australia outside of Queensland on a scaled back basis.

Updated at 10:23AM AEDT on 1 April 2020.

 


NSW Government calls on manufacturers to re-tool for Covid-19

NSW Government calls on manufacturers to re-tool for Covid-19

With global supply chains more or less kneecapped and exports of essential medical supplies in high-demand, the NSW Government is calling on local manufacturers to re-tool.

The State hopes local manufacturers will redeploy spare capacity to manufacture medical equipment and hygiene products that are urgently needed to help fight Covid-19.

NSW Premier Gladys Berejiklian says the world is running short on hand sanitiser, handwash, soap, gloves, cleaning products, protective clothing, masks, eyewear and paper products.

"This is a call to arms for NSW manufacturers to look at ways to convert production lines into making the items we so desperately need," says Berejiklian.

"We have the ability within NSW to meet our local demand and the Government is moving to help manufacturers re-tool quickly to achieve this.

"Importantly, providing this opportunity to manufacturers will also allow some businesses to keep people in jobs when they may not have been able to do so."

Of particular importance is the urgent need for personal protective equipment and disinfectant, the supply of which will be greatly constrained globally for at least 12 months.

The "call to arms" comes as manufacturers around Australia have re-tooled to manufacture things like masks, gloves and hand sanitiser.

Just yesterday Adelaide food packaging company Detmold announced it will be producing hundreds of millions of respirator and surgical mask for South Australia and the Federal stockpile.

Distilleries nationally have been converting their boozy production lines into high-capacity hand sanitiser factories to meet national demand from hospitals and individuals alike.

Minister for Jobs, Investment, Tourism and Western Sydney Stuart Ayres says the NSW Government has set up an online portal to connect the supply chain so more finished products can be provided where needed.

"This is an opportunity for businesses to not only diversify their supply but produce incredibly important products for our State in a time of need," says Ayres.

"We will work to find solutions to provide our hospitals and our people with the protection they need, while keeping as many workers as possible in a job."

Businesses can register their interest to manufacture urgently needed goods via the NSW Covid-19 Emergency Supplies registration portal here.

The announcement comes as NSW hits 2,032 confirmed cases of Covid-19, with 114 new cases recorded in the state yesterday.

Nationally there are now 4,561 confirmed cases of the coronavirus, with 917 in VIC, 743 in QLD, 364 in WA, 337 in SA, 80 in the ACT, 69 in TAS, and 19 in the NT. 19 people have died of Covid-19 in Australia to date.

Updated at 9:17AM AEDT on 1 April 2020.


Retailers and landlords unite with leasing code of conduct

Retailers and landlords unite with leasing code of conduct

While Australia's banks will be given a $90 billion funding facility from the RBA and the country's Federal and State governments are offering unprecedented stimulus packages, there is still no clear-cut solution as to who foots the bill when retailers struggle to pay rent.

Thousands of retail outlets nationwide have closed in recent weeks including just about any clothing brand you can think of, as well as a raft of discretionary retailers like Michael Hill Jewellers, Adairs and Nick Scali.

In addition, social distancing restrictions have extended restaurant and café bans (except takeaway) to shopping centre food courts.

And while a welcome $130 billion has been pledged to subsidise wages for businesses that are suffering due to the pandemic, this is no panacea to pay the high fixed cost of retail space or the debts of the landlords who own it.

It is an inherently frictional relationship, and one that lends itself to blame game politics.

But the nation's retailers and shopping centre owners have shown goodwill today in an attempt to push through the crisis, following meetings over the past two days to establish a draft Code of Conduct for retail leasing.

The National Retail Association (NRA), Australian Retailers Association (ARA), the Pharmacy Guild of Australia (PGA) and the Shopping Centre Council of Australia (SCCA) have announced their shared commitment to ensuring business continuity.

The groups agreed no two retailers are the same and circumstances needed to be addressed on a case-by-case basis, but in general they agreed to the following leasing principles:

  1. A short term, temporary moratorium on eviction for non-payment of rent to be applied across commercial tenancies impacted by severe rental distress due to coronavirus;
  2. Tenants and landlords are encouraged to agree on rent relief or temporary amendments to leases;
  3. The reduction or waiver of rental payment for a defined period for impacted tenants;
  4. The ability for tenants to terminate leases and/or seek mediation or conciliation on the grounds of financial distress;
  5. Commercial property owners should ensure any benefits received in respect of their properties should also benefit their tenants in proportion to the economic impact caused by Covid-19;
  6. Landlords and tenants not significantly affected by coronavirus are expected to honour their lease and rental agreements; and
  7. Cost-sharing or deferral of losses between landlords and tenants, with Commonwealth, state and territory governments, local government and financial institutions to consider mechanisms to provide assistance.

A full copy of the joint statement by all major Australian retail groups is attached and was sent to all states and territories today, calling for an implementation of the code.

"We sat down immediately after the Prime Minister's announcement to come together in good faith and continue our ongoing discussions to ensure landlords and tenants are working together," says NRA CEO Dominique Lamb.

"Our industry has a track record of working together, including on challenging issues, and this is about working together and assisting policy makers in the next phase given our group's longstanding engagement on retail leasing issues," adds ARA CEO Russel Zimmerman.

PGA national president George Tambassis notes pharmacies are under "immense pressure" as frontline health resources during the Covid-19 crisis, and they need the certainty and consistency that can be provided by this code.

SCCA executive director Angus Nardi highlights the work retailers and shopping centre owners can do to keep business going.

"Shopping centre owners and retailers have a mutual interest in business continuity and it's positive to have a unanimous and timely approach to tackle the pressing challenges we all confront in the current environment in a way that is fair and balanced to everyone," says Nardi.

Updated at 5:07pm AEDT on 31 March 2020.


Adelaide's Detmold Group to produce millions of respirator and surgical masks

Adelaide's Detmold Group to produce millions of respirator and surgical masks

A South Australian food packaging company famous for its Detpak brand will pivot to manufacturing surgical and respirator masks to assist in the fight against Covid-19.

Up to 160 extra staff will be hired at Detmold's Adelaide factory to produce 100 million masks for the Federal Government's National Medical Stockpile and 45 million for SA Health.

Specialised machinery will soon be installed at Detmold's Brompton-based facility, with production expected to commence in May.

Detmold CEO Alf Ianniello (pictured left) says he is proud that he and Detmold can step up to the plate and help fellow Australians in the fight against the coronavirus.

"Detmold is a South Australian company with a long history of employing locals, so to be able to assist with both flattening the curve in this time of crisis and helping keep South Australians in work is immensely rewarding," says Ianniello.

"We expect to have the capacity to manufacture over 20 million masks per month by June, and the facility will produce both surgical masks and respirator masks."

Detmold's pivot to manufacturing medical equipment is the latest example of private industry working with the public sector to achieve outcomes in the best interests for all Australians.

Minister for Industry, Science and Technology Karen Andrews says the initiative, spearheaded by SA Health, demonstrates the strength of Australian manufacturers.

"This is a fantastic example of how our strong manufacturing base in Australia puts us in a position to be able to make more of the medical supplies we need during the outbreak of this virus," says Andrews.

While Detmold's focus is on supplying SA Health and the Federal Government's National Medical Stockpile the company says it will be looking for ways to support other businesses and the broader community. Those interested in securing future supply should contact Detmold here.

Updated 3:44PM AEDT on 31 March 2020.


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