Woolworths is postponing the demerger of its Endeavour liquor and hotels business after the government ordered licensed venues to close.
The supermarket giant said the separation and spin-off of Endeavour would be deferred until 2021 due to the temporary hotels closure and financial market conditions.
Woolworths was given the go-ahead to restructure the $10 billion segment in December ahead of a planned demerger and likely spin-off in late 2020.
Endeavour’s Australian Leisure and Hospitality Group operates 323 hotels, nightclubs, restaurants, cafes and sports bars.
The federal government on Monday ordered these types of venues – where people gather – to close to prevent the spread of the coronavirus.
These venues may still operate bottle shops and takeaway services.
Woolworths chief executive Brad Banducci said affected staff would be redeployed if possible.
Endeavour also has bottle shops such as BWS and Dan Murphy’s, which continue trading.
Woolworths said the venue closures, and changes to shopping behaviour at its supermarkets, meant it could not estimate the impact of the virus on its full year financial results.
Panic buying has led to a shortage of goods on supermarket shelves around Australia.
Mr Banducci said unprecedented demand had challenged the supply chain, but there were early signs of more moderate shopping behaviour.
In other sectors, Seven West Media says the postponing of the Olympics and AFL competition, along with a falling advertising market, means it must scrap its earnings guidance.
The media group pays hefty fees to broadcast the two sporting competitions, which have this week been suspended due to coronavirus concerns.
AFL officials were forced to postpone until May due to border restrictions, while Olympics organisers had little support from athletes to proceed in July.
The Olympics will likely go ahead next year.
Seven West said its rights payments for the Olympics would likely be deferred due to the revised scheduling.
However the media group may suffer cancellation costs from suppliers it engaged for Olympics coverage.
It also said local productions faced challenges with travel restrictions, although were using contingency measures.
Meanwhile, Michael Hill Jeweller has shut its 304 stores around Australia, Canada and New Zealand for an indefinite period due to health concerns from the coronavirus.
The jeweller on Tuesday said it was acting in the health and safety interests of staff and customers, and fewer customers were visiting stores in Australia.
The decision to close stores in Australia and New Zealand follows the shuttering of those in Canada on March 20.
Staff will be stood down with access to leave, but management will cut corporate support jobs.
Michael Hill has postponed its interim dividend payment of 1.5 cents per share for six months.
The business continues to trade online.
Shaver Shop is another to withdraw its earnings guidance.
It also cancelled an interim dividend payment of 2.1 cents per share.
Chief executive Cameron Fox said record sales and earnings had been expected, but in the last week store sales plunged by 23 per cent.
The economy did receive some help on Monday after federal parliament passed two sets of economic stimulus measures.
The first package was worth $17.6 billion, and the second worth $66 billion.
Jobseeker, youth allowance, parenting and special benefit payments will be boosted by $550 a fortnight.
In separate legislation, the government set aside a further $40 billion for urgent and unforeseen spending associated with the pandemic, likely to cause a recession.
AAP
Be the first to comment