Covid-19 News Updates

Lendlease to book at least $230m loss as COVID-19 devaluations bite

Property project developer Lendlease (ASX: LLC) has joined the likes of Stockland (ASX: SGP) and Mirvac (ASX: MGR) with portfolio devaluations due to COVID-19, and its bottom line will suffer as a result.

The company was already expecting to record restructuring costs due to the exit of its engineering services division, which Lendlease has today indicated will be in the upper range of estimates at $550 million.

In an unaudited results update released today the group forecast a loss of $230-340 million after tax.

This partly driven by an estimated $130-160 million after tax hit to investment valuations, or just over 1 per cent of Lendlease's $4 billion portfolio.

LLC shares dropped 5 per cent on the news to $11.75 each this morning, which was likely also influenced by the indication a final divident likely would not be paid.

But Lendlease's drop in asset values is relatively minor compared to Stockland - a comparably sized company in terms of market capitalisation - which took a six per cent cut to commercial property book values, or approximately $624 million.

Meanwhile Mirvac's property portfolio has been reduced by $349 million due to COVID-19 impacts, representing a 9.9 per cent fall.

Despite an expected loss in statutory terms, Lendlease anticipates a core profit after tax of $50-150 million, amidst plans to push ahead with billions of dollars' worth of projects in Sydney, Milan, San Francisco and elsewhere.

"The Development segment has experienced delay in the conversion of a number of opportunities across urbanisation projects due to the impact of COVID-19, including at Melbourne Quarter, Barangaroo and International Quarter London," the company said.

"The segment has also been impacted by delays in apartment settlements along with elevated cancellations across the Communities business.

"Performance of the Construction segment was impacted by COVID-19 in all regions. The impact was greater in our international regions, particularly in cities where mandated shutdowns were implemented. This has included lower productivity, projects being put on hold and delays in the commencement or securing of new projects."

Lendlease expects to complete the sale of its Acciona business in FY21, and the company retains the Melbourne Metro Tunnel Project, NorthConnex and Kingsford Smith Drive projects.

"As previously advised, the Cross Yarra Partnership consortium for the Melbourne Metro Tunnel Project is continuing to work with the Victorian Government on a confidential basis to resolve issues in relation to the scope and costs on the project," the group says.

"The NSW Government has indicated that NorthConnex will be operational in the coming months and the Kingsford Smith Drive project in Brisbane is scheduled to complete by the end of CY20.

"The Group will enter FY21 in a strong financial position with gearing at 30 June 2020 expected to be below 10 per cent and total liquidity above $5 billion, representing cash on hand and undrawn facilities."

The company recently raised $950 million in an institutional placement, followed by a further $260 million share purchase plan (SPP).

Updated at 10:31am AEST on 1 July 2020.

Land tax relief for Queensland businesses extended for four months

The application deadline for the Queensland Government's land tax rebate has been extended for a further four months to assist local businesses.

Queensland Treasurer Cameron Dick says the decision was made following consultation with the Property Council of Australia.

"As restrictions ease further in the week ahead, we know more businesses can look forward to increasing their trade, but for many small businesses the road ahead remains very challenging," says Dick.

"In order to enable landlords to better support their tenants, keeping businesses trading and supporting Queensland jobs, we will extend the rebate application deadline to 31 October 2020.

"This will give landowners more time to finalise relief agreements with their tenants and apply for the rebate."

Since the Queensland Government first announced relief measures to support landowners and tenants through the COVID-19 pandemic, more than $91 million in land tax relief has been approved, benefitting around 7,000 taxpayers.

Updated at 9:07am AEST on 1 July 2020.

Victoria to impose lockdowns in hotspots, Melbourne flights to be cancelled

The Victorian Government will enforce lockdowns in 10 postcodes after midnight tomorrow night, with urgent $5,000 grants for businesses in these areas that are forced to close as a result.

These drastic measures were taken following comprehensive genomic sequencing received by Premier Daniel Andrews this morning showing much of the recent spike in COVID-19 cases could be traced back to breaches of protocol in hotel quarantine.

In response to this revelation the Premier will have a former judge conduct an inquiry into hotel quarantine, and he has also informed the Prime Minister and asked for all flights to be diverted away from Melbourne for two weeks as a precautionary measure. 

There is yet to be an official response from the Commonwealth, but Andrews told a press conference he was "pretty sure the answer will be yes where there'll be no further flights arriving".

"Today's flights will have been the last ones for a period of two weeks," he said. 

Andrews said 10 suburbs would revert to Stage 3 restrictions with people only allowed to leave their homes for four reasons: work or school; care or caregiving; daily exercise; food and other essentials.

Residents of the following suburbs will need to comply with these restrictions for a four-week period until 29 July:

• 3012 - Brooklyn, Kingsville, Maidstone, Tottenham and West Footscray;
• 3021 - Albanvale, Kealba, Kings Park and St Albans;
• 3032 - Ascot Vale, Highpoint City, Maribyrnong and Travancore;
• 3038 - Keilor Downs, Keilor Lodge, Taylors Lakes, Watergardens;
• 3042 - Airport West, Keilor Park and Niddrie;
• 3046 - Glenroy, Hadfield, Oak Park;
• 3047 - Broadmeadows, Dallas, Jacana;
• 3055 - Brunswick South, Brunswick West, Moonee Vale and Moreland West;
• 3060 - Fawkner; and
• 3064 - Craigieburn, Donnybrook, Kalkallo, Mickleham and Roxburgh Park.

Residents of these postcodes who are already on holiday elsewhere will be able to complete their holidays, but if they have not gone on their holidays between now and tomorrow midnight they will not be permitted to leave. 

As this will inevitably lead to the cancellation of bookings, Victoria's Minister for Tourism and Industry Support Martin Pakula is expected to announce support measures tomorrow.

The Premier noted people would be well aware of the restrictions implied by going back to stay-at-home order settings, with takeaway-only options for cafés and restaurants while gyms will be closed.

"We know that that's going to be painful," he said.

"We know that that's going to be a really significant challenge, so I can announce today...for each and every business that has to close because of these new rules in those 10 postcodes, there will be an urgent grant of $5,000," he said, clarifying this was an initial response and more would be done if needed.

"That adds to the $10,000 that the vast majority of these businesses have already accessed under our business support program."

The Premier said Victorian Police would be actively enforcing the suburban lockdowns and will be stopping random vehicles in an organised and coordinated way, similar to "booze bus" checks.

"These are extraordinary steps. These are not things that we've had to do in the past but such is the nature of this virus," he said.

"It is so wildly infectious that if we don't take these steps now, we will finish up in a situation of rather than locking down 10 postcodes, we will be locking down every postcode. I don't want to get to that point."

The Premier also spoke about how genomic sequencing is giving experts and decision-makers a finer level of detail about chains of transmission; linkages that are not always apparent through contact tracing by talking to people.

He said the linkages provided by the science of genomic sequencing can show how an individual has contracted the virus and links between different cases.

"This morning I received the most comprehensive genomics briefing that I have received throughout the pandemic," he said.

"What that briefing provided and put to me very clearly is that at least a significant number - and potentially more - outbreaks in the north of the city are attributable via genomic sequencing to staff members in hotel quarantine breaching well known and well understood infection control protocols.

"That is unacceptable to me. I'm sure that will be unacceptable certainly to all of those who will be impacted by the restrictions that we have had to reimpose."

A former judge will be conducting an inquiry into those control breaches and any other issues in relation to hotel quarantine.

"I hasten to add, this sequencing relates to outbreaks and chains of transmission from some time ago - there is a time lag in getting this DNA work, this sequencing done," he said.

"More recent outbreaks that can in any way be attributable to hotel quarantine, I think are a separate issue. The point I want to make is the clear issues that this raises are from some weeks ago, in fact, perhaps even longer than that."

Out of an "abundance of caution" the Premier called on Prime Minister Scott Morrison to divert all flights away from Melbourne for the next two weeks.

"I'll have conversations with other state leaders to explain that and thank them in advance of the extra load that they will carry," he said.

"I would also make the point that just as we are having to focus exclusively on tracking and tracing these the spikes in numbers, and the enforcement of the stay-at-home Stage 3 in effect restrictions we've imposed on those 10 postcodes, we need to have all of our focus on that."

Updated at 3:52pm AEST on 30 June 2020.

Queensland sticks to 10 July border opening date, Victoria barred

Queensland will be open for visitors from all states and territories except Victoria as of 10 July, while this Friday small businesses will be allowed more patrons under a 2sqm rule.

Premier Annastacia Palaszczuk (pictured) has today delivered on her promised date to open up to the rest of the country, but high levels of community transmission in Victoria mean an exception had to be made for the state.

As of noon on 3 July, anyone travelling to Queensland from Victoria - including Queenslanders - will be prevented from entry unless they are willing to spend two weeks in hotel quarantine at their own expense. 

People arriving from other states or territories will also have to declare that they haven't been to Victoria in the past 14 days, and anyone who falsifies their document could face fines of up to $4,000.

"Queensland has very large concerns about the state of Victoria. There have been 250 cases in the past seven days - yesterday 75 and today 64. There is community transmission," Palaszczuk said.

"We just can't risk removing border restrictions for people coming from areas of Victoria right now."

"There's also one proviso here and I hope Queensland families will understand this - if the Chief Health Officer reviews any state or territory at any time and there is [sic] outbreaks of community transmission like Victoria, we may have to take further actions."

Premier Palaszczuk and Deputy Premier Steven Miles also outlined the easings of various restrictions will take place on 3 July, bringing aspects of Stage 3 forward by a week:

• Limits on private gatherings will increase from a maximum of 20 to 100 people. This means up to 100 guests will be allowed at weddings, funerals, house parties and fitness classes;
• The reopening of contact community sport, with no limits on spectators outside although social distancing must be observed with 1.5 metres between household groups;
• Small businesses under 200sqm size - such as cafes, pubs, restaurants, surf clubs and RSLs - will have a one person per 2 square metres, up to a maximum of 50 people. Drinks can be ordered at the bar;
• For venues of a larger size, 20-person limits will be lifted and replaced with a one person per 4 square-metre rule;
• A 50 per cent capacity or one person per 4 square-metre rule at concert venues and theatres;
• A 50 per cent capacity or 25,000 limit - whichever is the lesser - at stadiums;
• A reopening of casinos;
• A reopening of food courts; and
• Family households will be able to sit together in places of worship, with 1.5 metres between family groups.

Approved COVID Safe plans will be needed for contact indoor and outdoor community sport, as well as events of more than 10,000 people. 

The Premier emphasised today's decision was not taken lightly, with careful consideration from the Chief Health Officer and from government.

"We believe we have the balance right. We will do everything to preserve Queensland's good record at preventing the spread of COVID-19 in our state - we are in a very good position at the moment but we know at any time anything could change.

"We have good systems in place and we must do everything we can to help Victoria during this time," she said, noting Queensland's chief health officer has travelled to Victoria to assist."

Deputy Premier Miles said there have only been nine new COVID-19 cases in Queensland since the state entered Stage 2 restrictions on 1 July, of which seven were from overseas and two were acquired interstate.

"That's in stark contrast of course to what we have seen recently in Victoria. Today they surpassed twice the number of total cases as we have had here in Queensland since the outbreak commenced," Miles said.

"They have had more locally acquired cases than Queensland has had in total; they've had more than six times the number of cases where the source of the infection could not be identified than we have had.

"They have more than 288 active cases right now compared to just two in Queensland and seven in New South Wales."

Miles emphasised Victoria was managing multiple outbreaks on multiple fronts, but there was "no interstate rivalry here".

"We're all in this together and we all need to work together. It's in all of our interests for us to suppress this virus across the country, including right now in Victoria," he said.

"We've now offered and sent our Deputy Chief Health Officer to Victoria to assist them. We are undertaking testing every single day of Victorian-taken samples. We have called today for expressions of interest for 14 nurses that we will deploy to Victoria to assist them.

"This virus does not respect state borders, and so we must enforce them. These new stricter rules will ensure that we contain the virus in Victoria our message to Queenslanders is please do not go there. Our message to Victorians is please do not come here until these outbreaks under control."

Updated at 2:16pm AEST on 30 June 2020.

SA will not relax Victorian border on 20 July

South Australia's border with Victoria will not be reopened on 20 July as planned due to the worsening situation with COVID-19 in Melbourne. 

The state will also reassess the date on which it will open its border to the Australian Capital Territory and New South Wales, indicating today that it may actually be sooner than 20 July.

"At this point we cannot relax [the border with Victoria] on the 20th of July," says SA Premier Steven Marshall (pictured).

"We're gathering information on a daily basis, we're very hopeful that Victoria will be able to bring their outbreak under control, but at this stage we cannot possibly lift that border on the 20th July as we were hoping to do.

"It could be that we bring the ACT and New South Wales before the 20th, or it could be on the 20th, or it could also be delayed. It's unlikely to be delayed, they have done extraordinarily well."

South Australia will provide a firmer update with regard to NSW and the ACT later this week.

Borders to travellers from Western Australia, the Northern Territory, Tasmania and Queensland into South Australia are already open, meaning visitors from those jurisdictions do not have to complete a two week period of self-isolation.

Travellers from NSW, ACT and VIC are currently required to self-isolate for 14 days on entrance into South Australia.

South Australia reported just three new cases of COVID-19 yesterday. All three were travellers from overseas that are currently in hotel quarantine.

Updated at 10:54am AEST on 30 June 2020.

Seafolly appoints voluntary administrators

One of Australia's most iconic swimwear and women's beachwear brands is all at sea after 45 years in business, and will be sold off as part of an administration process announced yesterday.

A "crippling impact" from the COVID-19 pandemic led Seafolly to make the tough decision, appointing Scott Langdon and Rahul Goyal of KordaMentha Restructuring as voluntary administrators.

The appointment also includes entities relating to Sunfolly's bikini and swimwear business Sunburn.

The future of Seafolly, its 56 stores and more than 120 employees is now uncertain, although Langdon is optimistic there will be strong demand for a buyer.

"Given the quality of the brand and its reputation, there will inevitably be a high level of interest in purchasing the business," says Langdon.

Interested parties can contact KordaMentha's Sydney office, while Langdon explains it will be business as usual for customers.

"All Seafolly gift cards and the popular Beach Club Rewards points will continue to be redeemable at all Seafolly stores," he says.

"We encourage all loyal Seafolly customers to come to the retail stores and redeem their Beach Club Rewards, plus earn more points."

Seafolly was founded in 1975 by Holocaust child survivor Peter Halas, and currently has a retail network of 44 stores throughout Australia and 12 stores overseas.

Updated at 9:56am AEST on 30 June 2020.

Victoria confirms 75 new COVID-19 cases

The Victorian Minister for Health Jenny Mikakos has confirmed 75 new cases of COVID-19 today, bringing the state's total to 2,099.

In Victoria, this is the highest new daily case rate since 31 March when 96 new cases were reported.

The highest peak in Victoria to date was on 28 March when there were 111 confirmed new COVID-19 cases.

Of the cases confirmed today, 71 are new with the other four reclassified after being indeterminate.

One of the new cases is a person quarantining in a hotel, 14 are from local outbreaks and 37 have come from routine testing. The other 23 cases are still being investigated.

There have been no new deaths, but there are 288 active cases in Victoria. Nine of these cases are in hospital with one in intensive care.

15,000 tests have been completed since yesterday as part of the state's testing blitz which has seen 53,000 tests completed since commencement.

The new cases are "overwhelmingly" concentrated in Melbourne's 'hot spot' areas according to Mikakos, particularly in the inner northern and western suburbs of the Victorian capital.

The news comes as Victoria has officially hit its "second peak" in COVID-19 cases over the weekend, according to Chief Health Officer Brett Sutton.

New measures for overseas travellers were imposed on Sunday: the state has made testing mandatory for those quarantining in hotels after returning from overseas. For those that do not comply with the order an extra 10 days will be added to the two-week quarantine period.

Testing is also ongoing in 10 Victorian hotspots: Keilor Downs, Broadmeadows, Maidstone, Albanvale, Sunshine West, Hallam, Brunswick West, Fawkner, Reservoir and Pakenham.

Despite the large increase in COVID-19 cases today the Chief Health Officer Brett Sutton has not announced a lockdown for Victoria or COVID-19 hotspots yet.

"We know what will turn this around, and it's people stepping forward for testing, but also isolating when they've got symptoms," says Sutton.

"I think there's still an opportunity for that to turn around. But if it isn't, absolutely public health directions, changing the law, is something that we have to consider because we have to do whatever is required to turn this around.

"It would be a harder step, but it's got to be proportionate. We know what the consequences are of a lockdown in terms of fatigue and people's behaviours, we don't want to drive people out of suburban areas into new unaffected areas. So there's a balancing act in terms of making the call on lockdown."

10 million COVID-19 cases confirmed worldwide

It also comes after globally confirmed COVID-19 cases surpassed the 10 million mark on Sunday, with the global death toll inching past 500,000 too.

2.5 million of those 10 million cases are in the United States, with Brazil (~1.3 million), Russia (~600,000), India (~500,000) and the United Kingdom (~300,000) rounding out the top five global hot spots for COVID-19.

The rate of new COVID-19 cases in Victoria is comparable to Austria and the Netherlands, where those two countries reported 74 and 73 cases respectively. However, both the European countries have significantly higher total COVID-19 numbers than Australia, with 17,654 in Austria and 50,147 in the Netherlands.

In Australia there have been seven new confirmed cases of COVID-19 today in New South Wales, whilst in Queensland there have been no reported cases of the coronavirus.

In South Australia restrictions ease further today as the state moves to Stage 3, with pub gaming areas, spas and saunas able to reopen.

Physical distancing requirements in SA venues will halve today and seated food court dining will reopen too.

Updated at 11:37am AEST on 29 June 2020.

Tasmania to open borders from 24 July

If everything goes to plan, Tasmania will open up its borders to the rest of the country on 24 July.

This plan to further ease COVID-19 restrictions in the state will be reassessed regularly over the next four weeks, with a formal review into the situation in Victoria to be conducted in a fortnight from now.

Tasmanian Premier Peter Gutwein says the state will not reopen its borders if medical advice says it is not safe to do so.

"If the public health advice, at that time or in the immediate lead up to that date, is that it is not safe to open and remove our restrictions then, very simply, we will not open up our borders," says Premier Gutwein.

"Over the next four weeks we'll put in place a plan to support a safe relaxation of our border restrictions and we'll include the reviewing of the circumstances of other states and territories on a weekly basis and we will have a full review of Victoria's situation in two weeks."

The Premier says the situation in Victoria as it is today would mean Tasmania would remain closed to its northern neighbour.

"I want to be absolutely clear, as the circumstances stand today, if we were opening up tomorrow we would not be opening up our borders with Victoria tomorrow," says Gutwein.

The opening up of Tasmania's borders on 24 July will include heightened measures at the State's borders, including at airports and seaports.

Border safety will be supported by an app, currently under development, that incoming travellers to Tasmania will have to download and use. This app will be complemented by a manual record system too for those unable to download the app.

The app will replace Tasmania's current arrivals form and will include the use of a QR scanner.

Updated at 4:17pm AEST on 26 June 2020.

Retail Food Group sees customers return, but permanent closures inevitable

Retail Food Group (ASX: RFG), the owner of Gloria Jean's Coffees, Brumby's Bakeries, Donut King, Michel's Patisserie and others, has observed an increase of customers returning to its outlets as COVID-19 restrictions ease across most of the country. 

However, the pandemic has sped up the permanent closure of a number of its outlets in Australia as 17 stores remain temporarily closed.

Of those 17 stores RFG executive chairman Peter George says approximately seven will be permanent closures.

"These were forecast to close in the near future, and COVID-19 has simply expedited that outcome," says George.

"Customer count has continued to improve, with recent trading data reflecting a weighted average decline amongst all brands of 13.76 per cent versus the previous corresponding period, albeit this remained well below pre-pandemic levels.

"The Company is also closely monitoring the situation in Victoria given a recent spike in COVID-19 infections and speculation regarding the potential re-introduction of restrictions within that State."

The company has also provided FY20 underlying EBITDA guidance of approximately $35 million today and anticipates net debt at 30 June 2020 will be around $25 million.

Rental relief for franchisees has been obtained in respect of approximately 415 outlets, according to George.

"This is a positive outcome for both franchisees and RFG which provides both cash-flow support and added certainty," says George.

"Negotiations with landlords regarding relief arrangements are ongoing and are anticipated to persist for the duration of the pandemic and a reasonable recovery period thereafter."

Internationally around 138 international outlets remain closed, 30 of which are now permanently shut. Around 150 international outlets are operating with limited dine-in options and a further 230 on a takeaway only basis.

"RFG expects trading conditions to remain challenging in the foreseeable term and therefore anticipates a continuation of those measures implemented by the Group in response to the pandemic to support franchisees," says George.

"That said, there are a number of positive developments within the Group's business that provide optimism for the future."

Shares in RFG are up 0.01 per cent to $0.07 per share at 10:32am AEST.

Updated at 11:10am AEST on 26 June 2020.

Stylerunner, The Athlete's Foot drive profit lift at Accent Group

A shift to online has put a spring in the step of footwear retail company Accent Group (ASX: AX1), pushing up digital sales in the June quarter by 150 per cent.

The group, which owns the Australia-New Zealand distribution rights to footwear brands like The Athlete's Foot, Stylerunner, Skechers, Vans and Dr. Martens, is now forecasting a 10 per cent lift in EBITDA to almost $120 million for FY20.

However, FY20 final operating profit below the EBITDA line is expected to include a non-cash impairment of assets of $3-4 million on several store and other assets where revenue has been impacted by the current environment.

The outbreak of COVID-19 and associated restrictions forced Accent to close down 470 stores in March, but demanad for active footwear and apparel as well as Skechers' range for health professionals contributed to a quadrupling of online sales.

All of Accent's stores in Australia had opened by 11 May, and the same was true in New Zealand by 22 May, but there has now been a "seismic and most likely enduring" shift to digital. 

While customers had physical store options at their disposal the company still achieved a new daily record of $2 million in digital sales during the Click Frenzy event from 19-22 May.

Digital sales in May reached $29 million, while this month they are currently accounting for around 23 per cent of revenue.

"The strong trading performance over the last two months driven by digital has been well ahead of expectations," says Accent Group CEO Daniel Agostinelli.

"It is clear that there has been a seismic and most likely enduring shift in consumer behaviour. With 18 websites and our leading digital capability, Accent Group is capitalising on this trend.

"Through this period Accent has attracted many new customers online who have never shopped with us before. We will continue to drive digital growth as the number one priority in our company."

In general, sales in New Zealand, Western Australia, South Australia, Queensland and regional areas have bounced back more strongly than the metro centres in Melbourne and Sydney.

Accent Group reports the customer trend towards activewear and performance running continues to remain very strong in Stylerunner and The Athlete's Foot, with a broad-based recovery in spend across all banners and product categoriesthrough May and June.

The company's sales in May and June (to week 51) have been strong with like-for-like sales up 7 per cent, and at the start of this month the group stood up all its 1,500 permanent employees to full employment and full pay, which enabled a further acceleration of sales results in June.

Successful negotiations have also been concluded with landlords and Accent has continued to pay rent.

"We are committed to maintaining our position as the largest multi-channel footwear retailer in our market," says Agostinelli.

"The mix of Accent's superior digital capability and the magic of our stores gives us a key competitive advantage, but it is important that we reach agreement with our landlords for sustainable and fair rental deals.

"With landlords where this cannot be achieved, we will close stores. We are delighted to report that to date we have been able to reach agreement with the vast majority of our major and independent landlords."

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