Event cuts executive pay, suspends dividends

Cinema and hotels operator Event will suspend payouts and slash executive and board pay to cut costs amid the virus crisis.

Event has welcomed the restricted reopening of ski operations at Thredbo.

Listed entertainment company Event Hospitality & Entertainment has announced it will suspend its dividend payout as part of a move to reduce its costs amid the fallout from the COVID-19 pandemic.

In a business update to the ASX, the operator of cinemas, hotels and resorts said it had slashed the pay packets of its senior executives and board members in a bid to substantially reduce corporate costs.

It also did not intend to pay a final dividend for the 2020 financial year or an interim dividend for the first half of 2021. Future dividend payments would be subject to board consideration.

“The scale of the impact of COVID-19 on Event’s operating businesses is unparalleled in the group’s history,” chairman Alan Rydge said in a statement.

“Successful completion of the refinancing process and the group’s strong balance sheet, including its extensive property portfolio, positions it well to navigate through a challenging trading period.

“I remain confident that Event’s best days are ahead of us and look forward to a return to normality for our trading divisions.”

Event touted a successful refinancing of its debt facilities, saying that its debt facility had been increased by $205 million to $750m, resulting in available cash and undrawn debt facilities of around $320m.

The pay packet for chief executive Jane Hastings had been reduced by $200,000, Event said, while chairman Alan Rydge had agreed to waive his fee. Ms Hastings’ remuneration package was $1.5m, according to the company’s latest annual report.

Lead independent director Peter Coates agreed to a voluntary pay reduction of 50 per cent while all other directors had agreed to a reduction of 20 per cent.

Senior executives had their salaries reduced by 12.5 per cent, while the company had implemented a wage freeze for 12 months and said it would not make any cash payments of short-term incentives for the 2020 financial year.

Event, which operates 835 screens across Australia and in New Zealand under brands including Event, Moonlight Cinemas, Greater Union and Birch Carroll & Coyle, also said the majority of those cinemas were now reopened.

“We have taken this opportunity to innovate to ensure that when we reopened we would be more agile and more efficient than ever before,” Ms Hastings said.

“We designed and implemented market leading COVID-19 practices and training programs to ensure we were ready to welcome back staff and customers.

“In New Zealand, Australia and Germany, governments have offered support via wage subsidy schemes which has assisted with the retention of critical roles and functions.

“We completed the largest cinema audience research study in Australia and New Zealand to test our strategies and gain insights into customer intentions which assisted in forming our reopening plans.”

Ms Hastings said that pent-up demand for this year’s ski season is strong, so the opening of Event’s facilities at Thredbo, albeit with restrictions, had been pleasing.

“We hope that restrictions ease and we are able to satisfy more customers with the chance to visit Thredbo this winter,” she said.

The company said the majority of its hotels had remained open throughout the COVID-19 shutdown with a number of initiatives implemented to mitigate the impact of the virus.

A sales process for the divestment Event’s German cinema operation CineStar to Vue International remained underway after it was conditionally approved by the German Federal Cartel Office. The sale remains subject to conditions set by the German Federal Cartel Office, being the divestment of six sites within a six-month period.