08-Apr-2020: COVID-19 Update and Withdrawal of FY20 Guidance
“To date, COVID-19 has had limited impact on WesTrac, where mining and construction activities have, at this stage, been largely unaffected with year-to-date revenue up 15 per cent on prior period and 5 per cent on budget. Coates Hire’s general hire operations continue to perform broadly to expectations, however, events revenue has been curtailed. Coates Hire’s year-to-date revenue is up 3 per cent on prior period and down 1 per cent on budget. Both businesses continue to provide essential services to support the resources and construction industries, and State Governments, to ensure that our support of critical services continue.”
SGH is in a strong position. The company has $803 million of undrawn facilities and cash of which $430 million is committed. Furthermore, the next substantial refinancing is due in 18 months with the average duration of the drawn debt being 3.5 years. As a policy, we retain a $300 million crisis liquidity buffer to ensure the company has sufficient liquidity to support our operations through any government mandated actions. The company will pay the 21cps fully franked interim dividend on 20 April as previously announced.
Our businesses which include WesTrac, Coates, Allight, and interests in Seven West Media and Beach each provide essential services to help support Australia through this current COVID-19 pandemic. These services include critical support to key areas including the resources and construction sectors, provision of domestic gas, and informing the public through news and information.
However, the measures put in place by Governments have suppressed the short term outlook for non-essential services including impacting the advertising market and major sporting events and thus our earnings referable to Seven West Media. The fall in oil price will also impact our earnings from Beach Energy. Both businesses have independently amended their guidance.
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