Fabric and home crafts chain, Adairs has ruled out the need for a capital raising and will start to slowly reopen stores from this Thursday after reporting a 37% drop in total sales during its store closures over the past 5 weeks.
Far from being a voluntary act, the competition and consumer regulator, the ACCC has forced travel group, Flight Centre to stop charging a $300 cancellation fee for customers seeking refunds on international travel (and $50 for domestic bookings) they have booked but been forced to cancel because of COVID-19.
The travel sector is now a wasteland as the COVID-19 virus continues to wreak havoc across here and across the globe. Helloworld will make 275 staff redundant and temporarily stand down 1300 more workers while Flight Centre has cancelled $40.1 million worth of interim dividend payments.
Macquarie believes a $700m capital raising provides the company with the ability to deal with the travel restrictions. While total transaction value in April was down -95%, an improvement is expected as travel restrictions gradually ease.
Flight Centre has withdrawn FY20 guidance. The broker has revised down forecasts with the caveat of best guess under the circumstances. The broker's travel sector view is one of depressed conditions throughout the first half FY21 before normalising in FY22.
Macquarie has surveyed 40 travel agents, airlines and hotel operators to gauge recent travel trends. The consensus view is that conditions are subdued for both domestic and international travel. Global political uncertainty and corporates mandating travel freezes of varying degrees are having an impact.
The company has downgraded guidance by -12% to $335-360m for pre-tax profit in FY19. Credit Suisse notes the Australian leisure business continues to be challenged and total transaction value appears to have declined in the first months of 2019.