Big groups start enacting survival mode plans

25 March, 2020 by Vanessa Cavasinni

As pub operators all over the country deal with the ramifications of the Government-ordered shutdown of their venues, the big groups have begun to deal with the reality of shutting down multiple venues, and standing down large numbers of staff in order to keep their businesses viable long-term.

Redcape (ASX:RDC), has quickly taken stock of its current financials and provided an update on its future operations for investors. Based on the current restrictions, 32 of its venues are closed, while its 16 bottleshops and accommodation at two of its hotels remain operational.

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The pub group has forecast that, based on current restrictions, it will take $10 million per quarter to maintain the business. Redcape currently has $100 million cash on hand. In a statement, the group announced that the majority of staff will be stood down, in a way that it hopes will allow employees to return once trading conditions ease.

“Redcape acknowledges the devastating impact that the closure of its pubs will have on its people. In order to preserve as many future jobs as possible and protect the business, the Group intends to stand down the majority of its permanent staff. During the stand down period, permanent staff will be able to draw upon accrued leave entitlements and additional support mechanisms with the objective of these staff returning to their jobs when venues re-open.”

For ALH, alongside news that the demerger of Endeavour Drinks Group from Woolworths would be postponed until 2021, the nation’s largest pub group has also revealed that it has stood down 8000 of its personnel across its 300 venues, however work is being done to ensure that as much of that workforce can be redeployed throughout Woolworth’s businesses as possible.

“We are redeploying many of our team members to work in retail liquor and Woolworths supermarkets. To date we have redeployed 2600 staff and are working on many more applications which see a further significant number of staff redeployed,” stated David Curry, head of regulatory and corporate affairs for the group.

For Merivale,one of the country’s most celebrated hospitality group’s, CEO Justin Hemmes, has also addressed the shutdown, with the priority now about supporting staff.

“Now that this decision has been made for community health and safety, my absolute top priority is supporting our staff. Merivale is what it is today because of its people, and I am simply in awe of our team’s passion and strength, especially over the last few week.”

Personnel remain employed by Merivale and have been given a support package to support them through the suspension of trade. This includes:

– Every employee that has worked for the company for over two months and works over 5 hours a week will be given a one-off discretionary payment of $550. That is the vast majority of Merivale’s 3000+ staff.

– In addition to the payment, permanent team members can also choose to access their accrued annual leave. If they don’t have any annual leave available, they can also elect to take 10 days annual leave in advance.

– Any employee with special hardship financial circumstances as a result of the impacts of COVID-19 can apply directly to the Merivale Employee Financial Hardship Support Program for a grant of up to $1000.

“Behind the scenes, we are doing everything we can to get the business in the best possible position to reopen doors, and help rebuild our economy, as soon as it is safe to do so,” stated Hemmes.