Key can’t see return of international travel in next 12 months
Former Prime Minister Sir John Key doesn’t expect international travel to return this year: “2021 looks like it will be on a pretty similar path to 2020,” he told the Herald as part of a broader interview conducted two weeks ago.
“I think it will take a while for the borders to open and for us to be travelling.”
In the comments made before the latest community cases of Covid-19, Key noted that the vaccine was a promising development but added there was still complexity involved in rolling out an inoculation programme.
“It’s a difficult one,” he told the Herald. “You have the challenges of getting the vaccine and then [having to ensure] the successful deployment of it. Resistance to Covid-19 is going to be key here.
The new highly infectious variants had pushed things back and the struggles in the UK and Europe showed how quickly things could change.
A former Minister of Tourism, Key noted the bigger question was how it might affect traveller behaviour in the longer term.
“I’m a bit mixed on that. Zoom calls and [communication] technology have been trends that have been around for a long time. This has accelerated some of that and there’s no doubt that some traditional companies, like ANZ which I’m involved with, have become much more comfortable with video technology.”
While the adoption of tech had led to a shift in the thinking at more traditional firms, Key didn’t believe this would negate the need for travel in the future entirely.
“I don’t think it replaces the desire, hunger and benefits that people have of being in the same room as the fellow directors, workmates or their clients. I think we’ll have a mixture in the way we do things.
“I’m actually quite bullish for airlines over time. I think as soon as people get the opportunity to feel safe about travelling again, they’ll do it.”
In the shorter term, he expects travellers to be cautious, but says this will fade as the pandemic is brought under control through the vaccine programme.
“It’s a high-volume, low-margin business. It always has been,” he says, predicting a swift return of international travel.
Traders pile on Bendon-owner
Auckland-based underwear firm Naked Brand Group, owner of lingerie chain Bendon, saw its share price triple at one point this week as the Reddit-driven mania for penny stocks sought new targets.
Retail investors, organised under the r/WallStreetBets subreddit group, have been taking positions in companies targeted by short-sellers, sending the stocks rocketing higher and causing losses for hedge funds that had betted against them.
Naked, which had been at risk of being delisted from the Nasdaq Exchange for being unable to maintain a dollar share price, saw its share price push toward the $US3 mark Wednesday before easing back later in the week. The stock closed Thursday at $1.38, up from 40c a week ago.
As the trading frenzy gained international headlines, online trading platforms Robinhood and Interactive Brokers restricted users’ trading in stocks seeing the most action.
Naked Brand recently said it was selling its Bendon subsidiary to focus on profit-making e-commerce business. Bendon was once majorityowned by embattled businessman Eric Watson before its backdoor listing following a reverse merger with Naked in 2017.
One of Watson’s companies in liquidation — Cullen Inc Holdings — owned 2.9m Naked shares as at April
2019, according to Nasdaq filings. And according to a court judgment in his long-running legal case with Sir Owen Glenn, many shares in Naked ended up with a number of Watson’s associates, including SBL Holdings, a company owned by Kiwi expat businessman Tim Connell.
Sec filings show SBL at one stage held 853 686 shares. It is unclear what interest SBL has now after a recent settlement that resulted in SBL being issued a new class of redeemable conversion shares in Naked.
Ivory Castle Ltd, an entity controlled by Watson’s former right-hand man William Gibson, also owned Naked shares, as did Jake Millar, founder of Unlimited and good friend of Watson’s son Sam.
At the height of this week’s heightened day trading, Naked announced on Thursday that it would issue
29.42m shares at $1.70 each for total proceeds of about $US50m.
Naked has had a torrid time since taking on Bendon. Last May the company reported an after-tax loss of US$54.3m (NZ$88m) for the year to January 31, 2020, on revenue of US$90m, down from US$112m the previous year.
The company reported a working capital deficit of US$22m and negative shareholders’ equity of US$6.3m. Total borrowings at balance date amounted to US$88m.
Naked did raise at least NZ$34m from share issues and convertible notes to assist with cashflow and repay debt while relying on wage subsides and bank support to keep Bendon afloat in New Zealand and Australia.