Fletcher cuts 10 percent of staff after accepting $60m of wage subsidies, while Australian employers face A$8b of back-pay after a court ruling on benefits for casual workers
Deconstruction: Fletcher Building has announced it will cut 10 percent of its workforce, including 1,000 in New Zealand and 500 in Australia across all divisions. CEO Ross Taylor said “the whole organisation will shrink”.
‘That’s it’: Fletcher Building confirmed it had received more than $60 million in government wage subsidies, but would not seek more.
Slower pipeline: Taylor said revenues were 50 percent exposed to residential construction in both New Zealand and Australia. Locally, it predicted a market downturn of 20 percent, due to a forecast 30 percent decline in residential consents in the 2021 financial year. In its commercial business, it forecast a decline of 15 percent. Fletcher shares closed at $3.30 down 3 percent and just 15c above its March low.
Profit boost: AFT Pharmaceuticals, which sells Maxigesic, reported annual profit of $12.7 million, which was up from a net loss of $2.4 million the previous year. It said sales in the first month of the new financial year were significantly ahead of a year ago, despite the sluggish retail environment, and were forecast to grow by more than 50 percent for the year.
Painful move: Founder & CEO Hartley Atkinson said Covid-19 had already cost the company more than $1 million in export orders due to the Indian government temporarily restricting any exports of products containing paracetamol. The ban has since been lifted, but these sales would now arrive in the current year. AFT shares closed down 1.3 percent at $4.66.
Reducing debt: Kiwifruit grower and marketer Seeka has conditionally sold three of its Australian orchards in a 30-year sale and lease-back agreement to reduce debt. Seeka shares closed down 2.7 percent at $4.50, but are up more than 30 percent since early April after a bumper kiwifruit harvest.
De-powered: In the wake of dramatic slide in air travel and a slump in orders for new aircraft caused by the coronavirus pandemic, British jet engine manufacturer Rolls-Royce is set to cut at least 9,000 jobs, or around 18 percent of its workforce.
Not alone: General Electric’s jet engine business said earlier this month it would permanently reduce its global workforce by as much as 25 percent this year, or some 13,000 jobs.
20 years of debt: The U.S. government has decided not to proceed with issuing 50-year and 100-year bonds to pay off shorter-dated bonds. Treasury Secretary Steven Mnuchin said during Congressional testimony that there wasn’t enough demand for such long bonds.
2.5 times subscribed: But after an absence of 34 years, a new 20-year bond was launched overnight and received solid demand, with US$50b of demand for the $20b of issuance. The bond sold at a yield of just 1.22 percent, which compares with 0.7 percent for the 10 year bond. (CNBC).
Skint: Retirees and those who rely on dividends for income in the UK are facing a tough year with almost half of the major listed companies having cut or deferred £30bn in dividends.
‘Keep your cash’: Last month, Royal Dutch Shell, the FTSE 100’s biggest payer last year, made the first cut to its dividend since 1945, slashing its first quarter payout by two-thirds after the oil price price collapsed. Also, Britain’s largest banks agreed in March to scrap nearly £8bn worth of dividends after discussions with the Bank of England.
Bonus back pay: Unions in Australia are welcoming a landmark decision by the Federal Court yesterday that regular shift workers who have received 25 percent pay loadings in lieu of benefits such as annual leave may be able to additionally claim billions of dollars of annual leave back pay following the court’s ruling on the definition of casual work.
Struth: The court ruled regular, ongoing casual workers were entitled to be paid annual leave, paid personal/carer’s leave and paid compassionate leave. Employers cannot use extra pay to set off that liability, as has been accepted practice.
‘Help us!’: Employers called for urgent government intervention, with between 1.6 and 2.2 million regular casuals potentially claiming up to A$8 billion at a time when many businesses are struggling with Covid-19.