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Covid-19 News Updates
Bank of Queensland (ASX: BOQ) may be seeing positive signs like a reduction in customers seeking pandemic-related relief packages, but updated economic forecasts have led the group to announce a $175 million loan impairment expense for FY20.
The Brisbane-based bank will also book a $11 million expense relating to an employee pay review.
BOQ has drawn upon RBA data as well as industry and sector impact assumptions to conclude there will be higher unemployment than its expectations in first half reporting, as well as downgraded property prices and a longer duration of the economic downturn.
The company has also increased the probability weightings to the downside and severe case scenarios from those in its previous modelling.
"The revised provision reflects the anticipated lifetime losses on the current portfolio relating to the impacts of COVID19 in line with AASB 9 Financial Instruments," says managing director and chief executive officer George Frazis.
The group reports 12 per cent of its housing customers are now on the banking relief package along with 16 per cent of SME customers. Of those who are on these packages, a quarter of them are continuing to make full or partial repayments.
"As we all know, this has been an unprecedented year and BOQ is committed to supporting our customers throughout this period," says Frazis.
"We are very pleased to see many of our customers returning to work and reopening their businesses and will continue to work closely with those that require further assistance."
Payment and entitlement review
After witnessing remuneration and superannuation issues elsewhere, BOQ made the call to start its own review of employees' pay and entitlements.
That initial internal review identified some irregularities in superannuation payments and then subsequently identified potential issues relating to people employed under an Enterprise Agreement (EA) and specific requirements under the 2010, 2014 and 2018 EAs.
BOQ has made a full and unreserved apology to people affected by these issues and will ensure people are remediated fully as a matter of priority as it completes a broader external wage analysis and review for EA employees.
The Fair Work Ombudsman and the Financial Services Union (FSU) have also been notified, with third parties appointed to assist with the analysis and remediation process.
Out of the expected $11 million expense, the bank has already made superannuation payments of $2.4 million to the Australian Taxation Office (ATO) as part of the Superannuation Guarantee Amnesty, with the remaining provision of $8.6 million set aside.
"We will get this right and we will make sure our people, past and present receive every cent they are owed. This is an absolute priority," says Frazis.
Updated at 11:08am AEST on 29 September 2020.
As Victoria moved to Step Two on its recovery path overnight with expectations the next step could be announced as early as mid-October, health authorities have today announced the lowest case numbers since mid-June.
In a tweet this morning Victoria's Department of Health and Human Services (DHHS) reported there were just five cases of COVID-19 yesterday, although three lives were lost to the virus.
Premier Daniel Andrews announced a couple of tweaks for Step Two yesterday including the resumption of private real estate inspections and allowing weddings for up to five people.
In addition, the lower case numbers prompted the government to allow on-site learning for apprentices or university students in their final year of study.
Under the new step, groups of up to five from across a maximum of two households can meet outdoors, outdoor pools will open, personal training can resume with a maximum of two people and their trainer, childcare centres can reopen, and kinder will be open from Term 4 as well.
"Recognising a number of important upcoming events for many of our religious communities, gatherings of up to five people can meet with their faith leader outdoors," Premier Andrews said.
"More of our medical, health and allied professionals will also be able to offer face to face services for non-urgent care.
"And of course, reaching the Second Step means we can begin to slowly ramp up elective surgery to 75 per cent of pre-pandemic levels."
One of the most encouraging signs in yesterday's announcement was that trigger points to move through the stages will now be solely based on meeting case number targets.
"That means the sooner we hit those targets the sooner we can consider our next steps," Premier Andrews said.
"Making sure we have enough time to evaluate the impact, movement between steps will be spaced at least three weeks apart.
"This, and based on the current projections, means we'll be in a position to consider our next Step by mid-October."
The Premier noted that seven weeks ago the state's average case numbers were peaking at more than 400 every single day, whereas yesterday the rolling case average was at 22.1.
"It's a remarkable thing and an achievement that belongs to every single Victorian. Because with grit and with guts and with heart we are beating this thing," he said.
"We are driving it down. We are winning."
However, the Premier explained people still needed to get tested if they felt sick, keep their distance when they're out, follow the rules and listen to the health advice.
"It also means continuing to wear a face covering. And with more people moving across our city, our public health team have advised the rules around wearing a mask need to be strengthened," he said.
"Victorians will now be required to wear a fitted face mask, covering the nose and mouth. Some of the concessions we made as we adjusted to this new normal - things like wearing a scarf or a bandana or a face shield - will no longer apply."
Updated at 10:37am AEST on 28 September 2020.
The Federal Government has announced a new funding package to help regional tourism operators pivot to domestic travellers in the short-term, while putting them in the strongest position to receive international visitors when borders reopen.
The new $50 million Regional Tourism Recovery initiative is aimed at assisting businesses in regions heavily reliant on international tourism, while the $841.6 million Building Better Regions Fund (BBRF) will get a $200 million top-up.
Deputy Prime Minister Michael McCormack said yesterday $100 million of the new BBRF funding would be dedicated to tourism-related infrastructure.
"We know every dollar spent on building local communities is a dollar well spent and that is at the heart of our economic plan for a more secure and resilient Australia," said McCormack, who is also Minister for Infrastructure, Transport and Regional Development.
Federal Tourism Minister Simon Birmingham said tourism regions had been hit hard by the COVID-19 pandemic and this would help them to bounce back firstly by attracting more Australians, and then overseas visitors when the country's international borders re-open.
"Tourism is such an important job creator and driver of many regional economies. We want to make sure that our tourism regions are in the best possible shape on the other side of the COVID-19 pandemic," Minister Birmingham said.
"This targeted new fund will support internationally dependent tourism regions to adapt their offerings, experiences and marketing to appeal to domestic visitors in the short-term and be in the strongest possible position to welcome back international tourists down the track.
"Increasingly we are targeting sectors hardest hit, with this regional support sitting alongside our $50 million business events program to get meetings, conventions and conferences up and running again, which is so crucial to the visitor economies of our capital and larger cities."
Assistant Minister for Regional Tourism Jonno Duniam emphasised regional tourism was the lifeblood of so many Australian towns and regional communities.
"Tourism will never be the same again, but there is opportunity in this challenge and the greatest opportunity is in our regions," Assistant Minister Jonno Duniam said.
"Our $50 million package will help to realise this opportunity, it will assist in saving thousands of businesses and jobs in the first and worst hit regional tourism areas across the country."
BBRF Round 5 will be delivered like its previous four rounds, with Infrastructure Project and Community Investment streams. Grant Opportunity Guidelines will be made available shortly, consistent with the existing BBRF framework, to assist potential applicants.
The Australian Tourism Industry Council (ATIC) has welcomed the new regional tourism recovery initiatives to tackle the serious, lasting impact of the COVID-19 recession.
ATIC Executive Director Simon Westaway said major funding of impactful tourism infrastructure for Australia's regions kept and created new jobs via more visitor dispersal and spending.
He said the new $50m federal funding package for nine internationally reliant regions would also genuinely support and more likely better sustain and future-proof iconic tourism assets.
"From Tropical North Queensland, Victoria's Phillip Island and WA's South West with Margaret River, these regions all delivered to a once rising international market," Westaway said.
"Yet international visitors have rapidly evaporated under a closed national border due to the public health response to COVID-19, ensuring depressed conditions to many regional economies.
"Last year Australia generated record international tourist visitation and spending through strong support of our regions. Sadly in 2020 the direct opposite has transpired due to the pandemic."
Westaway explained the ATIC had repeatedly called for a "compelling and captivating" regional tourism product to be enabled to sustainably grow for the future.
"These new Federal programs can contribute to this," he said.
"ATIC will work proactively with federal officials to outline how we believe this new funding can be more effectively spread across the nine international tourism reliant regions of need.
"We welcome the immediate consultation process. ATIC will push for a fast delivery of negotiated program funding of successful initiatives and to enterprises due to the state of tourism regions."
Photo: Visit Phillip Island
Updated at 9:46am AEST on 28 September 2020.
While online still only accounts for more than a quarter of Premier Investments' (ASX: PMV) sales, the segment's growth and high profit margins have emboldened the retailer's negotiating stance with landlords for physical stores.
Solomon Lew's group - the owner of such retailers as Smiggle, Portmans and Peter Alexander - has urged property owners to reduce rents in line with shopper behaviour that is increasingly shifting online, or else store closures will be "inevitable".
Premier Retail has booked an $8.7 million channel optimisation expense to potentially close up to 350 stores in Australia and New Zealand, and recorded one-off store asset impairments of $31.4 million in case suitable rental agreements cannot be reached.
Even including this impairments and expenses, the company's net profit after tax (NPAT) rose 29 per cent to $137.8 million in FY20.
Online sales rose 48.8 per cent to $220.4 million, but in the first six weeks of FY21 the rate was much higher at 92 per cent. In addition, Premier Retail notes the online business has a significantly higher EBIT margin than bricks-and-mortar stores.
The company also highlights "maximum flexibility" in reviewing each store's profitability as more than 70 per cent of stores in Australia and New Zealand are either in holdover or with leases expiring this year.
"Premier Retail's highly profitable online capability and the flexibility of our property portfolio, combined with the decisions we have taken in response to COVID-19, leave the Group best placed to maximise our position in the accelerating retail industry restructure," says executive director and Premier Retail CEO Mark McInnes.
"Our record result during this global health crisis is no accident but rather a function of our targeted strategic investments over the last decade, our high quality culture and the commitment of our global teams together with the strong support of our suppliers."
Premier is also a major shareholder in home appliances manufacturer Breville (ASX: BRG), which in contrast to another key holding - Myer (ASX: MYR) - has seen a steady rise in its share price over the past six months. PMV's stake in the group is now worth more than $1 billion.
Stationery store Smiggle has been particularly hard hit by the pandemic, so in response the group will be closing up to 55 Smiggle stores out of 131 outlets in the UK in FY21, along with the four remaining Smiggle stores in Hong Kong by 31 October.
Premier plans to significantly invest in Smiggle's highly profitable global online presence, but in relation to physical store closures will impair assets in the UK, Ireland, Hong Kong, Singapore and Malaysia.
Updated at 12:23pm AEST on 25 September 2020.
Australia's corporate watchdog has taken legal action against embattled dental group Smiles Inclusive (ASX: SIL) over its inability to produce an audited financial report for the December 2019 half, delivering on a threat made three months ago.
The announcement yesterday came after the shock departure of director Peter Evans yesterday, following in the footsteps of former CFO Emma Corcoran whose position is yet to be filled, and former CEO Tony McCormack.
The situation at the group has been so woeful that McCormack no longer includes Smiles Inclusive in his LinkedIn profile.
On the same social media platform current chairman David Usasz has also distanced himself from Smiles prior to his appointment to the role in March 2019, despite having been a founding director of the Gold Coast-based company since 2017.
In a letter to shareholders this week, Usasz claimed there were "green shoots" of improvement in the business as it executes its turnaround strategy, although it missed a deadline to pay back a $12 million loan to NAB.
After the loan was due the group announced it had requested an extension, but an update on the matter is still forthcoming.
To add insult to injury, the company was served yesterday with documents filed in the Magistrates Court of Queensland by the Australian Securities and Investments Commission (ASIC), seeking orders to supply the accounts within 28 days of receiving a court order to do so.
ASIC has confirmed it will withdraw the matter if Smiles is able to comply no later than a week before a 10 November court hearing.
"The Company confirms it is still working towards launching its capital raise, and expects to be in a position to lodge its 31 December 2019 accounts before the date of the hearing," Smiles said yesterday.
Last week shareholders received a notice of meeting for a vote that is due to take place on 23 October, in which a group of requisitioning shareholders led by dentists is calling for a board overhaul.
The group led by aggrieved former partners Dr John Camacho, Dr Philip Makepeace and Dr Arthur Walsh had sought to remove Evans, but the forms also include a vote to remove any director appointed after the notice of requisition.
This means that like Usasz, CEO Michelle Aquilina and director Peter Fuller, Evans' replacement - former Pacific Smiles Group founding executive Dr Genna Levitch - will have his role in question less than one month into the job.
The full notice of meeting was not published in Smiles' announcement to the ASX this week, and included questionable information about directors' time at the company.
On the penultimate page of that document, a joint statement from the current directors states that Usasz, Fuller and Evans were appointed in November 2019 following a period of multiple changes in the leadership team.
However, ASIC records state Usasz was appointed in August 2017, Evans was appointed in August 2018, and Fuller was appointed in June 2019.
Why or how the directors could get their own starting dates wrong is a mystery shareholders will no doubt be considering at the EGM vote next month.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia
Hospitality venues in Queensland will be able to have more patrons outdoors as of 1 October, while there will also be less bureaucracy for event organisers and more sports fans allowed into stadiums.
Deputy Premier Steven Miles said this morning the permitted density for outdoor spaces such as beer gardens, courtyards, al fresco dining and verandahs would go from the current 4 square metres to 2 square metres next month.
"We're also increasing the size of events that can go ahead with just a checklist, rather than a COVID Safe plan from 500 to 1,000 for outdoor events, as well as allowing our stadiums to operate at 75 per cent capacity - an increase from the current cap of 50 per cent capacity," Miles said.
"This is a further reward for Queensland as a further loosening of restrictions that will come into effect at 1am on 1 October. It's perfect timing I think to be able to get out, get about and enjoy Queensland."
Next month the state's border bubble with northern NSW will also be expanded to Byron Shire, Ballina Shire, the City of Lismore, Richmond Valley and Glen Innes.
Gathering restrictions have been lifted to 30 as of today in Brisbane and Ipswich, and the state will also be letting in travellers from the ACT so long as they arrive by plane and have filled out a border declaration pass.
Photo: Plough Inn
Updated at 9:49am AEST on 25 September 2020.
The government has announced reforms to facilitate an increased flow of credit to households and businesses.
A key change will be that banks and other lenders will be able to rely on the information provided by borrowers, unless there are reasonable grounds for doubting it.
The current practice of "lender beware" will be replaced with a "borrower responsibility" principle, under which borrowers will be made more accountable for providing accurate information to inform lending decisions.
The new arrangements will be designed to ensure credit assessment is more attuned to the borrower's needs and the credit product.
At present lenders have to obtain and verify extensive information about the expenses of borrowers, regardless of the loan product involved. Under the new system the obligations on the lender will be proportionate to the risk. This will simplify the assessment and speed up the process.
The government says the reform should reduce the "excessive risk aversion" that had been restricting the flow of credit.
Reserve Bank Governor Philip Lowe said recently: "We can't have a world in which, if a borrower can't repay the loan, it's always the bank's fault. On a portfolio basis, we want banks to make some loans that actually go bad, because if a bank never makes a loan that goes bad it means it's not extending enough credit. The pendulum has probably swung a bit too far to blaming the bank if a loan goes bad."
The government says its cutting of red tape under the new regime will reduce the cost and time it takes consumers and businesses to access credit.
The changes are also aimed at strengthening consumer protection for those who need it. This will include protection from predatory behaviour by debt management firms.
The announcement of the new credit regime follows the government earlier this week outlining proposed changes to the insolvency provisions, to give distressed businesses their best chance of pulling through the recession.
Treasurer Josh Frydenberg said that as the country recovered from the pandemic, "it is more important than ever that there are no unnecessary barriers to the flow of credit to households and small businesses."
"With billions of dollars extended to borrowers each month, credit underpins the Australian dream of home ownership while allowing businesses to invest, grow and create jobs," he said.
"By simplifying the loan application process for borrowers it will reduce barriers to switching between credit providers, encouraging consumers to seek out a better deal."
The government says these will be the most significant changes to the credit regime in a decade.
Repeated breaches of COVID-19 safety standards have forced New South Wales authorities to close The Rivers Restaurant in Thredbo for one week.
It is the second such venue in NSW to be shut down after authorities closed Unity Hall Hotel in Rozelle last month.
NSW Police and Liquor & Gaming NSW visited The Rivers Restaurant four times in July and September.
The authorities identified several breaches including:
- Patron numbers exceeding the venue capacity per square metre,
- A lack of spacing between seated patrons,
- Mingling between tables and in queues, and
- Alcohol being consumed while standing.
As such, the venue will be closed for seven days from 5am tomorrow.
Liquor & Gaming Director of Compliance Dimitri Argeres said messaging about COVID safety did not get through to the operators of The Rivers Restaurant.
"This venue has consistently failed to maintain COVID safety standards and has not complied with its own COVID safety plan," said Argeres.
"Police officers and Liquor & Gaming inspectors observed situations where the venue was repeatedly over capacity, groups were seated almost back to back, and queues of up to 30 people stood shoulder to shoulder. They also observed patrons drinking shots at the bar and consuming liquor while standing, including one of the business owners.
"First the venue was warned, then its manager and event promoter were fined $5,000 each. After finding yet more breaches on the fourth visit, it was clear that the ongoing operation of the premises presented a clear and significant risk to public health."
Argeres hopes other venue operators will take notice of this action.
"As we come into party season with major events such as the Spring Racing Carnival, Bathurst 1000 motor race, the footy finals, and schoolies celebrations, we're warning all hospitality providers and function operators to stick to the limits around venue capacity and group bookings," Argeres said.
"Distance and space are crucial: to avoid sharing close contacts groups must stay seated at a distance from other groups."
NSW has recorded one new case of COVID-19 today - a returning traveller in hotel quarantine.
NSW eases wedding restrictions, NYE fireworks may go ahead
Restrictions on weddings have been eased today by the NSW Government, meaning bridal parties of up to 20 people can be on the dance floor at the same time.
Premier Gladys Berejiklian said the permitted group would need to be the same 20 people for the entire event.
"This is really important because weddings, and unfortunately funerals and other gatherings, is where the virus is most contagious and spreads the most readily because people know each other," said Berejiklian.
"It is still a high risk environment and we ask both the patrons but also the function organisers to make sure that the bridal party, up to 20, is clearly identified and is not different multiples of 20."
The Premier has also expressed hope that the iconic New Year's Eve fireworks display at Sydney Harbour will go ahead, acknowledging it will be very different this year.
"Whilst the New South Wales Government is working our way through holding some type of fireworks event on New Year's Eve, can I stress it will not be like any other New Year's Eve we have had," said Berejiklian.
"I want to be clear that the New South Wales Government would never support or condone any activity which was not consistent with the health orders.
"It would be extremely limited in a COVID safe way that is within the health orders."
Updated at 11.40am AEST on 24 September 2020.
As Queensland goes 14 consecutive days without any confirmed community transmission of COVID-19, today the state government has decided to lift restrictions on gatherings.
As such, strict 10 person limits on gatherings inside a home or outdoors in Brisbane and Ipswich will be eased from 1am on Friday to allow for 30-person gatherings.
Queensland Deputy Premier Steven Miles has told Brisbane and Ipswich residents to invite some friends over this weekend.
"People can go ahead and organise that house party for Friday night," said Miles.
The easing of restrictions in the two areas will also mean that people can visit aged care facilities and hospitals again.
The measures will coincide with the state government lifting the classification of the ACT as a COVID-19 hotspot, allowing travellers from Canberra to enter Queensland by plane.
Updated at 10.44am AEST on 24 September 2020.
Within seven weeks of its fast COVID-19 tests gaining approval from Australian health authorities, Sydney-based Atomo Diagnostics (ASX: AT1) expects to take its technology to one of the countries worst-hit by the pandemic.
Atomo has entered into an agreement with PinkTech Design Private Limited, trading as DIVOC Laboratories, to launch its AtomoRapid COVID-19 antibody test in the Indian market.
AtomoRapid has been approved by Australia's Therapeutic Goods Administration (TGA) and has the European Union's CE marking, but before it enters the Indian market it will still need to be approved by the country's authorities.
The company explains DIVOC expects to obtain product registration approval for professional use in the second quarter of FY21.
DIVOC sees potential for the product's distribution to government, corporate and lab-to-lab settings, as well as through an established home visit network for testing that is supported by medical professionals.
Under the deal, Atomo will initially provide 77,000 antibody test kits with one per container, and the agreement will terminate if DIVOC fails to order one million units over the following 12 months following receipt of regulatory approval in India.
In return, Atomo will receive a fixed transfer price per unit and will also receive a percentage of revenues received by DIVOC on final product sales above this transfer price.
Globally, India is currently experiencing the highest rate of daily infections, with the seven-day average currently exceeding 90,000 daily cases.
The South Asian nation has been the second-worst-hit in terms of total recorded cases at more than 5.6 million, of which almost one million are still active.
India's testing rate per capita is a fourth of the US and its death rate per capita is similar, amounting to more than 90,000 lives taken to date.
The right to the non-exclusive sale of the AtomoRapid COVID-19 rapid test in India is a further expansion of Atomo's agreement with NG Biotech, its French partner that manufactures the device's strip while the product itself is made by the Australian company.
The device uses Atomo's locally-developed 'Galileo integrated diagnostic test platform, which has been in use for HIV self-testing and is also TGA-approved for that purpose.
"We are delighted to be able to offer our antibody rapid test in another large international market," says Atomo Diagnostics co-founder and managing director John Kelly.
"Rapid testing forms a significant pillar of India's response to managing the COVID-19 pandemic with the numbers of daily rapid tests increasing significantly in recent months.
"Our Indian partner is a high-quality provider of diagnostic services, being one of the few laboratories in India that has been able to secure NABL [Indian National Accreditation Board for Testing and Calibration Laboratories] accreditation.
"We are confident of their ability to rollout the AtomoRapid COVID-19 antibody testing across a number of high value channels in India in the coming months."
AT1 shares rose 7.14 per cent today to $0.375 each.
Updated at 4:13pm AEST on 23 September 2020.
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