- Property development company Stockland (SGP) has joined the growing list of companies slashing Board and Executive payments to fight COVID-19
- To offset the impact of the coronavirus on company operations, Stockland’s Board and Executive team will be slashing their salaries by 20 per cent
- Salaries will only be reduced over May and June at this stage
- The company said the virus impacted its retail town centres and residential community lot sales
- However, over May sales and foot traffic have been returning to normal
- Stockland said it has $1.6 billion in liquidity to safely see the other side of the COVID-19 storm
- Still, shares in the company fell by just over a per cent today to close worth $2.69 each
Property development company Stockland (SGP) has joined the growing list of companies slashing Board and Executive payments to fight COVID-19.
The company told shareholders today its Directors will take a 20 per cent hit to their salaries for two months to help offset the costs of the spreading coronavirus.
Stockland develops and operates residential villages, retirement homes, and retail town centres and, as one would expect, felt the sting of COVID-19 over the March 2020 quarter.
Somewhat late to the reporting party, Stockland shared the details how the virus impacts it third-quarter finances and activities today.
March mayhem
Stockland said sales January and February were tracking along nicely, especially across its retail town centres, but the virus heavily reduced foot traffic in March.
Retail town centres are stores in shopping centres.
Stockland said foot traffic was still down 40 per cent in mid-April compared to before the coronavirus struck, but things have since improved.
Encouragingly, Stockland said 60 per cent of its stores were able to keep trading through the whole of March and April. Of course, with the lowered foot traffic and many hospitality stores going to delivery-only service, revenue was still hit hard despite the open doors.
Nevertheless, while Stockland said it is still too early to identify clear trends and predict when the market will recover, 75 per cent of stores in retail town centres are now trading.
As for Stockland’s residential communities, the virus brought about a material decline in net lot sales as social distancing restrictions kept people in their current homes.
However, the company said sales have since recovered to their pre-COVID levels and all sales offices are fully operational as government restrictions ease.
Interestingly, Stockland said its retirement village net reservations were the strongest over the March 2020 quarter than they have been in over two years.
Government restrictions in April meant reservations declined somewhat over last month, but the company said sales are already beginning to pick back up in May as restrictions are slowly lifted.
Looking ahead
Stockland said it has roughly $1.6 billion in available liquidity at the end of April.
With this cash available, the company said it is in a comfortable position to navigate the current market disruption.
However, given the uncertainty of the economy at the moment, Stockland said it is still not able to provide earnings guidance for the financial year.
Shares in Stockland are trading 1.10 per cent lower today, worth $2.69 each in late-afternoon trade.