Nursing home operator Estia Health was forced yesterday to backtrack on an investor update in which it claimed none of its residents had contracted coronavirus after 13 tested positive at one of its facilities in Melbourne’s western suburbs.
It took two updates, a trading pause, and a halt to get the story straight to the ASX.
The first revealed a big write-down in asset values and the fact, buried at the bottom of the release, that two staff members had tested positive. “Neither employee worked while showing symptoms of the illness,” the company said.
The earlier release had stated, “The Company has had no known instance of COVID-19 infection amongst its past or current residents at the present time.”
But then things changed dramatically. The first statement was timed at 8.30 am, then a trading pause was made just before 10 am and the opening of trading.
A trading halt was put in place and then the second update revealing the 13 infections was released at 12.33 pm and trading resumed.
The shares fell more than 3% to $1.45 by the close on Monday.
The Company said in the second statement that it had activated its COVID-19 positive test response plan and is working with the Victorian Department of Health and Human Services Public Health Unit and the Commonwealth Department of Health to manage and monitor the situation.
Estia gave no further information about the infections, when they were discovered, how they occurred, or the condition of the 13 residents who have been infected.
That news made to a warning of the impairment look rather small.
Estia had warned in the first statement that it expects to take a non-cash impairment of up to $148 million in its full-year results as it writes off goodwill on past purchases.
“As a result of ongoing uncertainty of future sector funding and financing, exacerbated by the issues arising from the COVID-19 pandemic, the Company expects to report a non-cash impairment charge, primarily on goodwill arising from historical acquisitions, in its full-year results for the year ended 30 June 2020 of between $124m and $148m,” Estia told the ASX.
“This non-cash charge is a provisional estimate and is still subject to finalisation and audit prior to the completion of the FY20 financial results. The impairment is non-cash in nature, has no impact on the Company’s debt facilities, compliance with banking covenants, or its ability to undertake capital management initiatives.”