Redcape results highlight cost impact of COVID
Redcape Hotel Group Management has released results for the full year ended 30 June 2020, and they show just how big the impact of the COVID-19 pandemic and lockdown has been.
For the first eight months of FY20 Redcape’s distributable earnings increased by 22.1 per cent against the prior corresponding period, however with most of the group’s operations closed from 23 March until early June, earnings declined by 20.1 per cent for the full year.
Overall the group is in good shape reporting statutory net profit after tax for the full year of $11.2m, and it is showing signs of recovery with saying its “operating EBITDA in July 2020, was higher than July 2019”.
Detailing its operating performance over the year, Redcape said that like-for-like revenue growth for the group was 6.1 per cent in the first eight months of the year, and positive for all trading departments.
In highlighting the impact of COVID-19 the group reported that its operating EBITDA over that first eight month period was up 17.2 per cent, however for the full year operating EBITDA was down 14.8 per cent.
Looking ahead Redcape said that while there is significant uncertainty around the economic outlook, the group is “well placed to manage through any volatility”.
Redcape CEO, Dan Brady, said: “We have been able to emerge from the shutdown with our venues once again becoming community-centric hubs that deliver the customer experiences for which we are valued. Our investment in people and facilities over the long term had put us in a good position ahead of COVID-19 and our deliberate and calm approach to crisis management during the shutdown has enabled a strong early return to trade.
“At the commencement of the shutdown, we moved quickly to ensure our liquidity and established programs that delivered a high level of care for our people and connection with our customers and communities. We exceeded our initial estimates on expense control with operating costs tracking at $2.4m per month by the time the business started to reopen from 1 June 2020.
“We were well positioned for re-opening with a robust balance sheet, highly engaged workforce and customer base, and a clear focus on delivering an end to end customer experience that aimed to reduce hassles and reconnect customers to their communities within COVID-19 operating regulations. Metrics of Staff Satisfaction and Customer Net Promoter Score continue to provide lead indicators that we are living our values and achieving our purpose, enabling a drive to higher levels of performance and strong distributable earnings.
“With the organisation focussed on the continued investment in our people, our digital customer capability, and our land and buildings, we are targeting subject to operating conditions, the reinstatement of meaningful distributions in FY21.”
Over the course of FY2020 Redcape realised $98.1m on the sale of venues, compared with $36.5m spent on acquiring venues, excluding transaction costs. The group said that its refurbishment program has been reassessed in light of COVID-19 and the focus is now on “smaller, high priority projects”.