Yesterday's stimulus package and an emphasis on "essential services" have lifted shares in shopping centre owners and operators, despite two major players withdrawing guidance.
Vicinity Centres (ASX: VCX) suspended its guidance yesterday evening, and its shares jumped by more than 10 per cent to $1.147 this morning.
Vicinity's CEO Grant Kelley noted a deterioration in the retail trading and operating environment, with increasing uncertainty around the impacts of COVID-19.
"Given this, we have made the decision to withdraw our FY20 earnings and distribution guidance provided at that time," Kelley said.
"Our shopping centres continue to play an essential role for our communities, especially during this time of concern, providing access to food, household items, products, medical services and banking for everyday needs."
He highlighted shopping centres were defined as providing 'essential services to the community' by the Federal Government, and as such would remain open.
"Vicinity has a solid balance sheet. We are currently operating well within our covenants and have $1.3 billion of undrawn facilities," he said.
"We also have flexibility to defer capital expenditure on major projects until COVID-19 uncertainties are resolved. However, as part of our prudent approach to capital management, and given volatile market conditions, the securities buy-back program has been suspended."
Scentre Group (ASX: SCG), an owner and manager of Westfield shopping centres across Australia and New Zealand, suspended its guidance this morning citing volatility due to the pandemic. Nonetheless, SCG shares rose 23 per cent this morning to $1.85.
Shares also rose 6.3 per cent for Shopping Centres Australasia Property Group (ASX: SCP), and 2.7 per cent for Moelis Australia (ASX: MOE).
Carsales.com (ASX: CAR) has withdrawn guidance due to continued uncertainty in Australian market conditions.
"With the continuing spread of COVID-19, our overriding priority is the safety and wellbeing of our employees and customers in these difficult times," says carsales CEO Cameron McIntyre.
"We have a strong plan in place to reduce exposure to our employees and we have strong business continuity measures in place.
"As a business, we had good momentum prior to the impact of COVID-19 and we are confident in the underlying performance and resilience of our business model. We have a strong balance sheet and prudent gearing, which positions us well to deal with this challenging environment."
On a positive note, the company claims the international business remains resilient with continued good growth in revenue and earnings in South Korea, as well as a similar pattern in Brazil.
Shares drop for Covid-19 frontline player
Sonic Healthcare (ASX: SHL) was another company to withdraw guidance today, and its shares plummeted a further 8.68 per cent this morning.
"As a global laboratory company, Sonic is currently playing a crucial frontline role in combating the pandemic," says Sonic's CEO Dr Colin Goldschmidt.
"Our laboratories in Australia, the USA and Europe are testing thousands of patients every day for COVID19, and we continue to increase our testing capacity to meet the needs of the communities in which we operate.
"Our expert and experienced management teams and medical staff are working with governments and other healthcare organisations to provide as much assistance as possible."
Sonic Healthcare is also working with its major suppliers to ensure it has the necessary materials and equipment for testing.
"In addition to our focus on meeting the diagnostic testing needs of our communities, we remain focussed on the well-being of our 37,000 staff. I could not be prouder of the reaction of Sonic's people to this crisis," Goldschmidt said.
Other companies that have withdrawn guidance today include Credit Corp (ASX: CCP) and Raiz Invest (ASX: RZI), while Vita Group (ASX: VTG).
Other companies that have previously withdrawn guidance in response to the pandemic include: Boral (ASX: BLD), Downer EDI (ASX: DOW), Adairs (ASX: ADH), Village Roadshow (ASX: VRL), GPT Group (ASX: GPT), Nine Entertainment (ASX: NEC), Bluescope Steel (ASX: BSL), Redcape Hotel Group (ASX: RDC), Prospa Group (ASX: PGL), Hills (ASX: HIL) Accent Group (ASX: AX1), EML Payments (ASX: EML), Ramsay Health Care (ASX: RHC), Aristocrat Leisure (ASX: ALL), Mirvac Group (ASX: MGR), REA Group (ASX: REA), Monadelphous Group (ASX: MND), Coca Cola Amatil (ASX: CCL), Cochlear (ASX: COH), oOh!media (ASX: OML), Qantas (ASX: QAN), Webjet (ASX: WEB), Helloworld (ASX: HLO), Flight Centre (ASX: FLT), Corporate Travel Management (ASX: CTD) and Apollo Tourism & Leisure (ASX: ATL).
Updated at 11:24am AEDT on 20 March 2020.
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