Salaries and bonuses on the line as shutdown looms
THE operator of the majority of the Gold Coast's theme parks is slashing salaries and bonuses, telling all staff to take leave and considering shutdowns as coronavirus bites.
Village Roadshow Ltd issued a grim update related to COVID- 19 (coronavirus) to the ASX this morning.
The statement from the company behind Movie World, SeaWorld and Wet 'n' Wild said due to a reduction in visitor numbers, particularly from overseas, it was taking action to mitigate the impact.
Village Roadshow Ltd CEO Clark Kirby said: "Based on international precedent, it is possible that cinemas and/or theme parks may be closed in Australia for a period of time, which would have a significant adverse impact on VRL's earnings during that period. The Company is working on contingency plans for this eventuality".
The statement added that given the dynamic and uncertain nature of the impact of COVID-19 on our businesses "it is extremely difficult to predict the overall consequence for the financial results of VRL for FY20. It is therefore not possible to provide meaningful guidance on the group's earnings at this time."
The group was taking "decisive action to mitigate the significant adverse impact of COVID-19 on our businesses and we are implementing cost reduction strategies to reduce the potential impact on the group's earnings and cash flows and are in discussions with Industry Groups and Government at Federal, State and Local levels to develop action plans and support".
Cost saving initiatives include:
• Asking all employees to take leave to reduce employee costs
• Senior executives salaries will be reduced immediately
• Senior executive bonuses will be zero for FY20
• Freeze on all non-essential uncommitted capital expenditure
• Freeze on all non-essential international and domestic travel
• Freeze on all non-essential recruitment, consulting and advisory work
Mr Kirby added: "The safety and well-being of our employees and patrons is our first priority, we will continue to follow operating guidelines provided by government and health authorities despite the adverse impact on the profitability of our business.
"The cost reduction measures we are implementing will assist our group earnings and cashflows in challenging circumstances. Most of our earnings are derived from the domestic market which should enable a swift recovery once this terrible pandemic has passed."