Businesses say thanks for JobKeeper while handing over dividends

Details of how corporate Australia is using the $100bn wage subsidy scheme have emerged.

The city of Melbourne's retail sector has been heavily impacted due to a second wave of COVID-19. Picture: NCA NewsWire / Ian Currie

The $12bn Sydney Airport and multi-million property giant GPT have emerged as recipients of millions of dollars in JobKeeper payments, with both expected to continue to receive the wage subsidy to support staff through the pandemic through to the end of September.

Details of how corporate Australia is using the $100bn wage subsidy scheme have emerged as some revealed jobs are still likely to be cut at the end of the program.

On Tuesday, Sydney Airport reported a full-year net loss of $51.8m and that it had received $5m in wage subsidies for 498 employees on JobKeeper.

Despite the subsidy, the airport said the six-month job guarantee for 500 employees would not be extended beyond September.

“The staff job guarantee will regretfully not be extended beyond 30 September 2020 and a review is currently underway to restructure the organisation,” the company said in its full-year results.

Some companies who received the wage subsidy had enough money on hand throughout the pandemic to pay all their staff and will likely not be eligible to receive the subsidy beyond September, when businesses must demonstrate their turnover is still depressed compared with the same quarter in 2019.

The $8bn listed office and retail landlord GPT group received $4.1m in JobKeeper payments up to June 30 from the federal government – but still paid out 99.6 per cent of its $182m free cash flow as a 9.3c a share dividend to shareholders.

In its annual report, the company said that due to “the revised eligibility requirements for the extended JobKeeper, GPT is not expecting to receive JobKeeper support beyond September 2020”.

Federal opposition treasury spokesman Jim Chalmers told The Australian that the JobKeeper program should have been better designed to avoid spurious payments.

"Labor has said for some time that JobKeeper could be better targeted to companies and sectors that most need it," he said.

"The government is responsible for setting the eligibility tests for businesses.

"There have now been three versions of JobKeeper in three weeks and still too many people have been left out and left behind.

"It is in everyone's interests for companies to do what they can to protect the jobs of their employees and remain viable during Australia's first recession in three decades."

Listed dentist play 1300 Smiles also revealed in its full-year results on Tuesday that it received JobKeeper.

The company received a total wage subsidy of $1.805m even though its full-year revenue increased by 1.3 per cent to $39.8m on an annualised basis.

A net profit of $7.145m was declared, down just 8.1 per cent on 2019’s result, while $2.95m was paid out to shareholders in a final 12.5c dividend, unchanged from last year.

Managing director Daryl Holmes, who owns 14.7 million shares, will receive a payout of approximately $1.83m – consuming the entirety of the JobKeeper subsidy received by the company.

In its annual report, 1300 Smiles said the COVID pandemic was yet to significantly impact the group.

“There were significant trading disruptions between April and May 2020, however government stimulus (JobKeeper) was obtained and trading has returned to pre-pandemic levels,” they said.

“There does not currently appear to be either any significant impact upon the financial statements or any significant uncertainties with respect to events or conditions which may impact the reporting group unfavourably as at the reporting date or subsequently as a result of the coronavirus pandemic.”

Furniture retailer Nick Scali, who received $3.9m in JobKeeper and its New Zealand wage subsidy equivalent, as well as rent relief worth $2.3m, increased its dividend by 12.5 per cent to 22.5c a share.

Homewares retailer Adairs pocketed $11.3m from JobKeeper the NZ wage subsidy while lifting its final dividend by 37.5 per cent to 11c per share.

Janison Education Group, a small listed digital education services company, saw its revenue decrease by only 3 per cent on an annualised basis to $21.9m – yet the company still received an $800,000 JobKeeper subsidy and ended the financial year with a cash balance of $11 million.

Even companies that did not receive the wage subsidy directly reported benefiting from it.

Charter Hall’s Social Infrastructure REIT, which owns leases on childcare centres reported that its three major tenants who provide 66 per cent of the REIT’s income received wage subsidies.

“Childcare tenants were eligible to receive the JobKeeper payment which assisted them in helping them cover their eligible childcare workers’ wages,” CQE, which reported a net profit of $85.9m said.

Treasurer Josh Frydenberg told The Australian that upcoming changes to the JobKeeper eligibility thresholds would ensure companies who no longer need the subsidy will not receive it.

“The eligibility criteria for JobKeeper is clear. Businesses with an aggregated turnover of less than $1bn must have had a decline in turnover by 30 per cent, or in the case of businesses with an aggregated turnover of more than $1bn, a 50 per cent decline in turnover,” Mr Frydenberg said.

“As part of the initial JobKeeper scheme, eligibility only had to be proven once.”

“From 28 September 2020 as part of the JobKeeper extension, businesses will be retested against their September quarter turnover and their December quarter turnover to ensure they still qualify.

“This will see businesses who have recovered through this challenging period transitioned off the payment as it steps down and the economy opens back up.”