Covid-19 News Updates

Stockland and Link join guidance withdrawal bandwagon

More companies have joined the growing list of guidance withdrawals today, including Stockland (ASX: SGP), Link Administration (ASX: LNK), JB Hi-Fi (ASX: JBH), nib Group (ASX: NHF), Abacus Property Group (ASX: ABP), Viva Leisure (ASX: VVA), Arena REIT (ASX: ARF), Coventry Group (ASX: CYG) and MMA Offshore (ASX: MRM).

This adds to a raft of similar actions on Friday from Sonic Healthcare (ASX: SHL), Vicinity Centres (ASX: VCX), Scentre Group (ASX: SCG), Carsales.com (ASX: CAR), Charter Hall Retail REIT (ASX: CQR), Credit Corp (ASX: CCP), Raiz Invest (ASX: RZI), Vita Group (ASX: VTG), Valmec (ASX: VMX) and iCar Asia (ASX: ICQ).

Other companies that have previously withdrawn guidance in response to the pandemic include: Boral (ASX: BLD), Downer EDI (ASX: DOW), Adairs (ASX: ADH), Village Roadshow (ASX: VRL), GPT Group (ASX: GPT),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).

Covid-19 uncertainty claims scalp of Freedom Oil and Gas

The Covid-19 pandemic - combined with lower oil prices driven by a reduction in demand and a price war between Saudi Arabia and Russia - appears to have claimed the scalp of Freedom Oil and Gas (ASX: FDM).

The company has seen its share price deteriorate to an eighth of its former value over the past 12 months, but it was planning to raise capital to stay afloat.

As equity markets are so volatile at the moment that is no longer on the cards, so Freedom Oil and Gas announced this morning it had appointed Mr Steven Nicols of Nicols + Brien as a voluntary administrator.

"The Company has been working closely with its primary lender Wells Fargo and preferred equity holder, Ramas Capital Management, over the past few months, however, the current oil price environment combined with COVID-19's impact on the global equity markets has impacted the Company's opportunities to recapitalise and contributed to the Directors decision to put the company into voluntary administration," the company said.

Updated at 11:13am AEDT on 23 March 2020.

Victoria rolls out the coronavirus enforcement squad

A squad of 500 police officers will enforce social distancing rules and conduct spot checks on those in self-quarantine in a bid to contain the spread of Covid-19.

Coordinated by the Police Operations Centre, the officers will be taking action against anyone caught breaking the rules.

It comes as part of a gradual shutdown of non-essential activity across the country, announced Sunday evening, which includes the mandatory closure of pubs, clubs, nightclubs, casinos, licensed venues in hotels and pubs, gyms, indoor sporting venues, places of worship, cinemas and entertainment venues. Restaurants will only be allowed to provide home delivery or takeaway services.

"This decision and other containment measures are meaningless if Victorians don't take them seriously or don't think they will be caught if they flout the rules," says Victorian Premier Daniel Andrews.

"Such thinking is wrong and the new coronavirus enforcement squad at Victoria Police will take action against anyone caught doing the wrong thing."

Updated at 11.02am AEDT on 23 March 2020.

Germany enforces drastic social distancing measures

Strict social distancing measures have come into force in Germany overnight just as Chancellor of Germany Angela Merkel goes into self-quarantine.

As reported by Deutsche Welle Germany's new social distancing measures include:

• Public gatherings of more than two people will be banned. There will be exceptions for families and those living together.
• General contact with others should be reduced to a minimum.
• A 1.5-meter (4.9 feet) distance should be kept at all times when in public.
• Gastronomy businesses must close. Businesses offering food delivery and collection will be allowed to remain open.
• Service providers such as hair-dressers, cosmetic, massage and tattoo studios where a 2-meter distance between people is not possible must also close. Businesses and centres offering medical treatments may remain open.
• Police and other law enforcement agencies will enforce any infractions of the new rules Merkel did not state what the punishment would be for anyone not abiding by the new measures.
• Hygiene regulations must be implemented for staff in the workplace, or for visitors.
• Commuting to work, helping others and exercising alone outside will still be permissible, as long as the activities are carried out in abidance with the guidelines.

The measures will remain in place, initially for the next two weeks. 

Merkel announced the new measures just before being forced into self-quarantine after coming into contact with an infected doctor.

Updated at 10:49am AEDT on 23 March 2020.

Sydney Airport withdraws capital expenditure plan

With no non-citizens or non-residents allowed into the country, coupled with heightened restrictions on domestic travel, Australia's largest airport is scaling back.

Sydney Airport (ASX: SYD) announced today it no longer expected to implement its previous capital expenditure forecast of $350-450 million in 2020.

The airport's entire capital expenditure program is under review with the objective of only continuing with critical projects and deferring less critical until there is more clarity on the persistence of current travel impacts.

"Last year we demonstrated strong operating cost control. We are accelerating this focus in the current environment, and we are eliminating all discretionary spend in order to keep operational costs to a minimum," the company said.

"This includes working with our airline and other business partners to optimise the safe and secure facilitation of our passengers at a lower cost.

"Based on the information presently available to us we are confident in Sydney Airport's strong balance sheet and liquidity position."

Between Sydney Airport's cash reserves, undrawn bank facilities bond market debt, it has around $2 billion in available funds.

Updated at 10:43am AEDT on 23 March 2020.

Helloworld puts 1,575 jobs on the chopping block

As the travel industry draws to a standstill, tourism deal provider Helloworld (ASX: HLO) is slashing jobs to keep its costs down while CEO and executive director Andrew Burnes will forego his salary for the next three months.

All the cost-cutting and cash preservation measures being put in place are expected to reduce monthly outlays by 80 per cent.

The company announced today it would be actioning 275 redundancies in various countries at an estimated cost to the business of $1.4 million.

Today the group has also initiating the stand down of approximately 1,300, or 65 per cent of its workforce around the world. These will begin at 5pm tomorrow and last for an initial period of 10 weeks to 31 May 2020.

All remaining personnel will be offered reduced working hours, which will be assessed further depending on work volume in the weeks and months ahead.

As part of its cost-cutting initiatives, Helloworld is in the process of re-negotiating rents with its major landlords who have agreed to more favourable terms over the next six to nine months.

For its 2,500 network members around Australia and New Zealand, membership and marketing fees have been frozen for six months.

All discretionary expenditure has ceased along with marketing and advertising, while major project expenditure has been materially curtailed or put on hold.

HLO has also welcomed stimulus packages in Australia and New Zealand, and will draw on all available government assistance in both countries as well as elsewhere to support the business and personnel.

Elsewhere in the travel agency, Webjet (ASX: WEB) and Flight Centre (ASX: FLT) announced suspensions from official quotation today.

Updated at 10.21am AEDT on 23 March 2020.

Sales rise at JB Hi-Fi, The Reject Shop

"Essential services" is a term that has become the new holy grail for Australian retailers amidst the pandemic, and two companies that have benefited include JB Hi-Fi (ASX: JBH) and The Reject Shop (ASX: TRS).

JB Hi-Fi, which also owns home appliances retailer The Good Guys in addition to its eponymous electronics stores, reported year-on-year sales growth of 9.1 per cent in Australia between 1 January and 22 March.

Sales growth at The Good Guys was higher still at 10.4 per cent, but JB Hi-Fi sales were down 2 per cent in New Zealand.

"The Company continued to see strong momentum in Australia through the quarter, with an acceleration in recent weeks as both JB HI-FI and The Good Guys provided retail and commercial customers with the essential products they need to respond to and prepare for COVID-19," the company said in an update this morning.

These essential products include technology products that enable remote working, learning and communication, and essential home appliances for food storage and preparation.

Despite the positive sales scenario, uncertainty arising from the Covid-19 outbreak has led the company to withdraw its guidance for FY20.

The Reject Shop has announced a material increase in sales driven by customer concerns around coronavirus over the past four weeks.

Comparable sales for the first 12 weeks of the second half of FY20 now sit at 8.2 per cent for TRS.

But this figure belies a more sudden spike in the last week alone, as for the first 11 weeks the year-on-year growth rate was much lower at 5.7 per cent.

Comparable sales for the week between 16 March to 22 March 2020 were 36.1 per cent, driven by strong category performances in groceries, cleaning, toiletries and pet care.

"In these extraordinary times, The Reject Shop will continue to serve all Australians through providing access to essential grocery and household products at everyday low prices while doing everything we can to keep our customers and our team safe and healthy," says TRS chief executive officer Andre Reich.

Updated at 9:54am AEDT on 23 March 2020.

Victorian Government announces $1.7 billion stimulus package

A $1.7 billion 'survival package' will assist Victorian businesses and workers to overcome the impacts of the coronavirus pandemic according to the state government.

The stimulus package includes full payroll tax refunds for FY20 to SMES with payroll of less than $3 million.

Payments will begin flowing soon and will save eligible businesses up to $113,975 per year.

The same eligible businesses will be able to defer any payroll tax for the first three months of the 2020/21 financial year until 1 January 2021, freeing up a further $83 million in cashflow.

Commercial tenants in government buildings can apply for rent relief and 2020 land tax payments will be deferred for eligible small businesses.

The Government will pay all outstanding supplier invoices within five business days releasing up to $750 million into the economy earlier.

Liquor licensing fees for affected venues will be waived for 2020 to support businesses in the hospitality sector.

A $500 million Business Support Fund will also be established to support sectors hit hardest by Covid-19 including hospitality, tourism, accommodation, arts and entertainment, and retail.

Another $500 million Working for Victoria Fund will be established in consultation with the Victorian Council of Social Services and Victorian Trades Hall Council. The fund will help workers who have lost their jobs find new opportunities, including work cleaning public infrastructure or delivering food.

"We've listened to business and workers and now we're taking unique and unprecedented action to help businesses and their workers through this crisis," says Premier Daniel Andrews.

"Cash is better in the hands of struggling businesses than in a Government bank account right now Victorian workers need us to step up to help get them through."

Updated at 9:49am AEDT on 23 March 2020.

Theme parks, casinos and cinemas shut down

Theme parks on the Gold Coast will close from today in order to comply with restrictions on non-essential indoor and mass gatherings.

Dreamworld and Whitewater World, owned and operated by listed entertainment group Ardent Leisure (ASX: ALG), will retain minimal staff during this period to ensure the ongoing care of animals and maintenance of rides and attractions.

The theme parks will cease operation until 31 May 2020, but this date may change as further information becomes known.

"The decision to close our parks is a direct result of the COVID-19 outbreak," says Ardent Leisure chairman Dr Gary Weiss and theme parks CEO John Osborne.

"We are deeply aware that the decision to close our parks will create a great deal of uncertainty for our team members, their families and the broader community."

All Ardent Leisure board members will not take fees until further notice.

Village Roadshow (ASX: VRL), the operator of Gold Coast theme parks Warner Bros. Movie Word, Sea World, Wet'n'Wild, Paradise Country and Topgolf Gold Coast has also announced the closure of its parks this morning.

Sea World Resort, as an accommodation provider, will remain open at this stage and all cinemas operated by VRL will also close today.

Some staff will be retained to look after animals and conduct theme park maintenance, while others have been stood down.

Casino operators SkyCity (ASX: SKC) and Acquis Entertainment (ASX: AQS) have similarly announced closures.

SkyCity's Adelaide casino will be closed by 12.00pm (ACST) today, leaving 1,000 employees in a precarious position.

The closure requirements do not impact SkyCity's construction sites, meaning the company will continue to work on its Adelaide expansion project.

As a result SkyCity has withdrawn its FY20 earnings guidance.

Acquis Entertainment will also close its Canberra-based casino from 12pm today and will not be reopened until advised it is safe to do so by the Government.

Cinema operator EVENT Hospitality & Entertainment (ASX: EVT) has announced its cinemas in Australia and New Zealand will close with effect from today until the end of May 2020.

EVENT will stand down the majority of cinema employees during this time, and the company will allow employees to draw down on annual leave and long service leave. Negative annual leave balances up to five days will be offered.

Ginger processor Buderim Group (ASX: BUG) has announced that it will close The Ginger Factory Tourism Park from today until further notice.

Updated at 8:46am AEDT on 23 March 2020.

Australia will go into lockdown with restaurants and pubs to close

After Australians flouted social distancing recommendations this weekend by flocking to public beaches and clubs, the country's federal, state and territory governments have determined an escalation to "Stage 1" restrictions is necessary.

Following a national cabinet meeting, Prime Minister Scott Morrison announced the country would go into lockdown starting midday tomorrow, with closures to the following categories of indoor venues:

• Registered and licensed clubs;
• Licensed premises in hotels and clubs;
• Restaurants except for takeaway and delivery;
• Places of worship; and
• Cinemas and other indoor entertainment venues (this includes casinos).

With 1,315 cases of Covid-19 now in Australia, Chief Medical Officer Brendan Murphy observed a disregard of social distancing measures by some younger Australians.

He noted many had taken the attitude they would not be high risk, and for most younger people this is true, but he urged them to take greater care in order to protect older and more vulnerable people.

The government has also decided to keep schools open, with Murphy pointing to discussions with the Australian Health Protection Principal Committee (AHPPC) that found there was very little evidence of transmission between schoolchildren both here and overseas.

It comes as a number of Australian states and territories begin to place restrictions on those coming in.

Western Australia, South Australia, Tasmania and the Northern Territory are imposing restrictions on those entering for 'non-essential travel', subjecting those coming into the states/territories to a 14-day quarantine period on arrival.

This mirrors the Federal Government's restrictions on those arriving in Australia from an overseas country who must self-quarantine for 14-days on arrival.

Updated at 9:39pm AEDT on 22 March 2020.

PM commits an extra $66.1 billion to businesses and households

PM commits an extra $66.1 billion to businesses and households

The Federal Government has announced a third stimulus package targeted at those receiving government benefits and Covid-19 affected business.

Included in the $66.1 billion package is support for Australia's households, and assistance for SMES struggling to pay their employees.

It brings the total injected into the economy by the Government to $189 billion, and follows the $17.6 billion first economic stimulus package, $90 billion from the RBA and $15 billion from the Government to make access to finance easier.

"We want to help businesses keep going as best they can and for as long as they can, or to pause instead of winding up their business. We want to ensure that when this crisis has passed Australian businesses can bounce back," says the Prime Minister.

"Our focus is on cushioning the blow and providing hope to every Australian that we will get through this and come out the other side together.

"The next few months are going to be a difficult journey but we all have a role to play to adapt to the changes we're facing, to cushion the impact of what is happening and to pull together so we can bounce back when we get to the other side."

Support for SMES

In addition to previously announced support for Australian businesses affected by the coronavirus the Government has committed a further $31.9 billion to try and keep employees in jobs.

Eligible SMES can apply for up to $100,000 to employ people, with a minimum payment of $20,000.

Under the enhanced scheme from the first package, employers will receive a payment equal to 100 per cent of their salary and wages withheld (up from 50 per cent), with the maximum payment being increased from $25,000 to $50,000. In addition, the minimum payment is being increased from $2,000 to $10,000. The payment will be available from 28 April 2020.

"By linking the payments to business to staff wage tax withholdings, businesses will be incentivised to hold on to more of their workers," says the Federal Government.

Small and medium business entities with aggregated annual turnover under $50 million and that employ workers are eligible.

The payments are tax free, there will be no new forms and payments will flow automatically through the ATO.

The Government says this measure will benefit around 690,000 businesses employing around 7.8 million people and around 30,000 not-for-profits.

A Coronavirus SME Guarantee Scheme will also be established under which the Government will guarantee 50 per cent of new loans issued by eligible lenders to SMES.

It comes in conjunction with last week's announcement form the Reserve Bank of Australia of a $90 billion term funding facility intended to reduce the cost of lending.

The Government will guarantee up to $20 billion to support $40 billion in SME loans.

Support for workers and households

The Government will establish a new, time-limited Coronavirus supplement to be paid at a rate of $550 per fortnight to existing and new recipients of the JobSeeker Payment, Youth Allowance jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit.

This supplement will be paid every fortnight for the next six months and will be paid on top of regular payments already received by those on income support.

This measure is estimated to cost $14.1 billion over the forward estimates period.

In addition to the $750 stimulus payment announced on 12 March 2020, the Government will provide a further $750 payment to social security and veteran income support recipients and eligible concession card holders, except for those who are receiving an income support payment that is eligible to receive the Coronavirus supplement.

This second payment will be made automatically from 13 July 2020 to around 5 million social security, veteran and other income support recipients and eligible concession card holders. Around half of those that benefit are pensioners.

Those in financial stress as a result of Covid-19 will be allowed to tap into their superannuation.

Eligible individuals will be able to apply online through myGov for access of up to $10,000 of their superannuation before 1 July 2020. They will also be able to access up to a further $10,000 from 1 July 2020 for another three months. They will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans' Affairs payments.

CBA to extend $10 billion to small business support

In addition to the Australian Government's SME Guarantee Scheme Commonwealth Bank (ASX: CBA) will make available up to $10 billion of additional unsecured credit to support SMES.

The measure will mean SMES can access an unsecured business loan through the Commonwealth Bank for three years of up to $250,000 at historically low rates.

Interest rates on unsecured small business loans will be up to 500 bps lower than current rates. No interest will apply unless the loan is used, no repayments will be required for six months, and there will be no establishment or monthly account fees.

Australian businesses with less than $50 million turnover are eligible.

"We welcome today's announcement by the Government, which will help hundreds of thousands of small businesses stay afloat and millions of workers keep their jobs over the next six months," says CBA CEO Matt Comyn.

"It will help businesses reopen and help people get back to work following this unprecedented set of circumstances."

Updated at 1:41pm AEDT on 22 March 2020.