Vista launches discounted share issue to raise $65m. Should TVNZ be cutting all salaries in line with NZME and Stuff? Netflix surges to be worth more than Exxon Mobil, as US petrol demand collapses
Capital raise #4: Vista Group has become the latest listed company to tap shareholders and institutional investors for more capital. The cinema ticketing software developer is seeking an additional $65 million, with $25 million via a fully underwritten placement to institutions and the other $40 million through a one-for-4.75 pro-rata accelerated entitlement. Both offers will be priced at $1.05 per share.
‘We want in’: The company’s founders, directors and senior management have committed to subscribing for $4.7m of the new shares to be issued.Vista shares last traded at $1.40 and are in a trading halt while the placement is completed.
More pay cuts: Following on the heels of recent announcements from NZME and Mediaworks, Stuff has become the latest media company to impose ‘voluntary’ pay cuts on its staff. All staff earning over $50,000 will take a 15 percent cut while the the company’s senior management will take a 25 percent pay cut. CEO Sinead Boucher said she would take a 40 percent pay reduction.
Question? Should government-owned TVNZ also be requiring all its staff to take a pay cut given ad breaks on both TV1 & TV2 have never been shorter? TVNZ tell us executives are taking pay cuts, but have yet to roll them out across all staff. For CEO Kevin Kenrick the stop on incentive payments amounts to a 40 percent reduction in remuneration, and for top executives about 25 percent.TVNZ spokesperson Kirsty Way said the broadcaster had chosen to make the cuts without publicising them, but they had been implemented quickly.
“TVNZ has exited most contractor and freelance roles across the business, and cut incentive payments for all executive team members, most senior business leaders and the sales team. This equates to annual pay cuts of 40 percent for CEO and 25 percent for the executive team.”
Way said various organisations had approached the issue of pay cuts differently and TVNZ had opted to cut incentive payments rather than apply pay cuts across the board.“We’ve taken the incentive route at this stage, opting to keep staff on without cutting salaries – we are mindful many people are working harder and longer hours in more trying conditions.”TVNZ’s annual revenues last year amounted to $173.5 million but are expected to fall sharply in the current year as a result of the covid-19 outbreak.
Cut price: Listed commercial property company Asset Plus has cut the value of portfolio by more than 10 percent as it attempts to quantify the impact of Covid-19. Its four properties have been valued at $141.8 million, down from the draft $160.7 million valuation used for the since-cancelled $100 million capital raising. The valuation is expected to reduce the company’s net asset value per share to 57 cents from its current 69 cents value. Its loan-to-value ratio of 35 percent – up from 30.2 percent – is still within banking covenants.
On review: The company’s board decided not to pay a fourth-quarter dividend and will review its 2021 financial year returns on a quarterly basis. Asset Plus shares closed yesterday at 41c having lost a third of their value since the start of the year.
Bad call: Auckland Council might be regretting its decision not to participate in last week’s Auckland International Airport capital raise. Not only did the council had lose an immediate $18 million in the value of its shareholding due to dilution but had also missed out on a $70m gain from the subsequent rise in the airport’s share price which closed yesterday at $5.95, a 25 percent premium on the price the new shares were issued at.
Not happy: Mayor Phil Goff defended the decision at the time saying the city had other more important spending priorities in the wake of the Covid-19 pandemic, though that hadn’t stopped one Auckland councillor calling for a snap debate at this week’s council meeting to highlight the issue.
Hmmm: Eyebrows will be raised at the more than 50 percent jump in Air New Zealand’s share price in recent days given the airline’s significantly reduced services and the increasing likelihood the border will remain closed for some time. The shares lead the market higher closing at $1.31. The NZX50 gained 0.61 percent to close at 10,473 while in Australia the ASX200 finished the day down 0.9 percent at 5416.
Off the charts: Americans are well known for their gas guzzling vehicles and driving vast distances in them, but that hasn’t been the case in the last month. Fuel demand in the U.S. has just recorded its lowest level ever level, with just 5.84M barrels of gasoline consumed last week, compared to 10.3M barrels a month ago according to the Department of Energy.
Out of Money: After just 13 days, a US$349 billion federal relief program for US small businesses to access funding is expected to run out of money with many still waiting to get a lifeline. The government-guaranteed loans have been provided on a first-come first-served basis, but without more funding, many small businesses that have flooded banks with applications won’t get help, advocates said.
Exhausted: So far more than 1.4 million applications from small businesses across the United States have been approved, totaling about $305 billion of the $349 billion set aside, but the funding is likely to be exhausted by the end of this week.
Coronavirus beneficiary: One business that has benefited from the global coronavirus lockdown is movie streaming giant Netflix which saw its shares hit an all-time high in recent days. Netflix is now valued at more than Cisco Systems, and even Exxon Mobil Corp. Both companies have spent time at the top of the leader board as the largest company in the US.
Don’t forget Disney: but analysts are already speculating if this is as good as it gets for Netflix given increasing competition, particularly from rival Disney, which recently launched its own streaming service.
(Updated with TVNZ execs taking pay cut)