Profit of $27m but no plans to re­pay Covid wage sub­si­dies

The Timaru Herald - - Business - Me­lanie Car­roll

The owner of cloth­ing chains Hal­len­stein Broth­ers and Glas­sons saw sales re­cover af­ter a big de­cline dur­ing the level 4 coronaviru­s lock­down but has no plans to re­pay wage sub­si­dies it re­ceived.

Hal­len­stein Glas­son, which claimed $8.4 mil­lion in govern­ment sup­port in New Zealand and Aus­tralia due to Covid-19, posted a net profit af­ter tax of $27.8 mil­lion, down 4.3 per cent but in line with the top of its fore­cast range re­leased last month.

The com­pany’s bal­ance sheet con­tin­ued to be strong, and in­ven­to­ries were well con­trolled, said man­ag­ing direc­tor Mary Devine yes­ter­day.

In New Zealand, Glas­sons re­ceived $2.69m in wage sub­si­dies for 451 staff and Hal­len­stein Broth­ers re­ceived $2.48m for 415 staff, to­talling $5.18m.

In Aus­tralia, the com­pany also ac­cessed job to­talling $4.98m.

There has been a call for big busi­nesses that made a profit this year to pay back the wage sub­sidy, orig­i­nally paid to busi­nesses that had a 30 per cent fall in rev­enue due to Covid. About $14 bil­lion has been paid out to busi­nesses through 756,649 ap­pli­ca­tions, and $442.3m has been paid back.

Devine said the com­pany had no plan to re­turn the wage sub­si­dies, seeker pay­ments which she called in­stru­men­tal to the com­pany’s abil­ity to keep staff on dur­ing the pan­demic.

‘‘These are still very un­cer­tain times, things are mov­ing fast.

‘‘It was the right de­ci­sion by our peo­ple and we are com­fort­able with our po­si­tion.’’

The com­pany had made a com­mit­ment to pay­ing staff 100 per cent of their wages but re­duced that to 80 er cent for some of the pe­riod, she said.

The fash­ion re­tailer re­con­sid­ered its de­ci­sion in May not to pay an in­terim div­i­dend, pay­ing 15 cents per share ear­lier this month.

A fully im­puted fi­nal div­i­dend of 24c per share, on par with the pre­vi­ous year, will take the full year div­i­dend to 39c per share.

Over­all sales rose 0.1 per cent for the year ended Au­gust 1, pre­dom­i­nantly due to the high level of on­line sales from April on­wards, Devine said.

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