- Fluctuations in the market have been the only thing constant these days with S&P/ASX 200 ending in the red zone following an improved performance a day earlier.
- IOOF Holdings has divested 19.7 million shares in Australian Ethical Investment Ltd. and now holds only a 4.9% stake in this business.
- Ardent Leisure Group obtained financial support for its Theme Parks division under the Queensland Government’s COVID-19 Industry Support Package and Queensland Tourism Icons Program 2020. The stock surged ~23% by the close.
- Village Roadshow signed the Implementation Agreement with BGH.
- Link Administration Holdings announced changes in the Board.
As the uncertainty in the market continues, the S&P/ASX 200 index witnessed a slight fall on 7 August, closing in the red zone following a favourable performance the previous day.
Australia continues to witness a rise in the new COVID-19 cases. In the last 24 hours, there were 483 new cases. With this, the total cases reported in Australia stood at 19,862 (as on 6 August).
The impact was seen on businesses belonging to diverse industries while some zoomed up on the ASX. Sectors like Materials, metals and mining were the worst performers while a marginal improvement was seen in sectors like Real Estate and Consumer Discretionary.
Let us look at four ASX-listed companies which announced significant updates on the ASX that you might have missed.
IOOF Holdings Limited (ASX:IFL)
Founded in 1846, IOOF Holdings Limited has been engaged in assisting Aussies to secure their financial independence and has evolved itself to become a top provider of quality financial advice, products, and services.
Divestment of stake in Australian Ethical Investment Ltd:
On 7 August 2020, the Company announced that it sold around 14.2 million shares of its total minority interest shareholding of 19.7 million shares in Australian Ethical Investment Ltd (ASX:AEF). The total cash consideration of the 19.7 million shares is worth A$74.5 million.
With the divestment of these shares, the Company’s stake in Australian Ethical Investment Ltd is now at ~5.5 million shares.
The divestment proceeds would be used by the Company to lower debt. It would also offer strategic flexibility for growth prospects.
Ardent Leisure Group Limited (ASX:ALG)
Ardent Leisure Group Limited is amongst the most successful owners and operators of superior leisure assets which include the Dreamworld, WhiteWater World & SkyPoint theme parks.
The group announced that it obtained financial support for its Theme Parks division under the Queensland Government’s COVID-19 Industry Support Package and Queensland Tourism Icons Program 2020.
The financial package is worth A$69.9 million and is for three years. It comprises of A$66.9 million secured loans and a grant of A$3 million, which can be utilised to fund working capital and approved capital expenses.
Commenting on the financial assistance package provided by Queensland Government, Ardent Leisure Chairman, Dr Gary Weiss said that the package would support the Company to re-open its iconic theme parks, continue to hire hundreds of people. He also said that once the COVID-19 pandemic comes to an end, Ardent would invest in forthcoming tourism infrastructure and build more regional jobs.
SkyPoint Observation Deck and Climb situated in Surfers Paradise re-opened on 10 July 2020. With this financial assistance for the Theme Parks division, Ardent intends to re-open Dreamworld and Whitewater World by mid-September 2020.
Further, Queensland Health has approved the COVID-19 Safe Plans for Dreamworld and WhiteWater World, allowing the parks to re-open with 50% of historical capacity, subjected to sticking to numerous COVID related health instructions.
The market’s reaction to the news was positive with the stock gaining ~27% at the close of trading.
Village Roadshow Limited (ASX:VRL)
Founded in 1954 with roots in Melbourne, Village Roadshow Limited is a leading entertainment company and has a diversified portfolio of assets. The core business includes Theme Parks, Cinema Exhibition, Film and DVD Distribution and marketing solutions.
Implementation Agreement with BGH:
On 6 August 2020, Village Roadshow Limited announced that it had entered a collaboration with an entity owned by BGH Capital Pty Ltd (BGH)-managed funds. Under the agreement, BGH will obtain control of VRL using two alternative but concurrent schemes of arrangement demonstrating the total value of up to A$2.45 per share.
As per the terms, the shareholders of VRL would be eligible to obtain the total value of up to A$2.45 per share. It comprises of a base offer price of A$2.20 per share under Structure A alternative and additional offer price of up to A$0.25 per share, depending on the re-opening of theme parks and cinemas plus the opening of Queensland borders to any person from New South Wales and Victoria.
The BGH Transaction depends on limited circumstances and does not depend on arranging financing or due diligence.
Update on Current Operations and New Financing:
VRL confirmed that all Queensland based operations are open presently at reduced capacity to comply with COVID-19 safety protocols. VRL’s cinemas in metropolitan Melbourne and a few regions of Victoria are closed as per the directives of the Victorian Government. Other than these regions, Cinemas are operating as per the social distancing rules in each State or Territory.
VRL continues to implement strict rules over its operating expenses to conserve liquidity while ensuring the divisions can exploit improving patronage as controls are eased across Australia.
Further, the VRL’s participation in the Commonwealth Government’s JobKeeper scheme has allowed the Company to maintain the service of its staff.
Liquidity Position and Funding:
As several businesses have become operational, VRL’s net cash costs of negative A$10 million to A$15 million per month has decreased. However, the Company continues to operate on a negative cash basis and expects this to continue for several months. As of 30 June 2020, VRL’s net debt position was approximately A$280 million. The undrawn debt facility as at that was A$5 million from the total debt facility of A$340 million. A$230 million debt facility would mature in January 2022 while the remaining amount will mature in January 2024. Apart from this, the Company had unrestricted cash of ~A$40 million.
Link Administration Holdings Limited (ASX:LNK)
Link Administration Holdings Limited is the largest provider of services in superannuation administration industry in Australia.
Recent Board Changes:
Vivek Bhatia to succeed John McMurtrie as LNK’s Managing Director and Chief Executive Officer:
On 7 August 2020, the Company announced that its present Managing Director John McMurtrie, AM would retire in early 2021 and his position would be taken up by Vivek Bhatia who would join LNK as the Managing Director and Chief Executive Officer.
Mr Vivek Bhatia is the present CEO of QBE, Australia Pacific and was the standout applicant from a massive international executive search as part of a proposed succession process.
Resignation of General Counsel & Company Secretary:
On 5 August 2020, Janine Rolfe resigned from the position of General Counsel & Company Secretary, effective the date of the announcement. She would continue as General Counsel until early next year.
GOOD READ: ASX-listed Stocks Braving Corona Storm
Stock Information (as on 7 August 2020)
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