The Event Hospitality and Entertainment Ltd (ASX: EVT) share price will be on watch on Monday following the release of an announcement after the market close.
What did Event announce?
This afternoon Event provided an update on the impact of the coronavirus on its operations.
When Event released its half year results on February 20, it provided commentary on the expected impact of COVID-19 and other issues on its second half performance. Management advised: "Whilst it is too early to assess the full impact, the immediate impact on March earnings is expected to be between $2 million to $3 million."
However, since then, COVID-19 has spread globally and is having a major impact on the travel industry and the global cinema exhibition industry. In respect to the latter, management notes that several distributors have delayed the release of major titles until later in the 2020 calendar year.
As a result, the company has indicated that COVID-19 will now have a greater than expected impact on its second half performance. Though, it remains too soon to quantify the full extent of the damage.
Event's CEO, Jane Hastings, said: "Given the dynamic and uncertain nature of the COVID-19 outbreak, it is not possible to provide meaningful overall guidance for the Group's earnings for the second half of the financial year."
Positively, Hastings notes that the company has a strong balance sheet and appears confident that it will bounce back strongly when conditions improve.
She added: "The Group's balance sheet remains strong and whilst it's hard to predict how long COVID-19 will impact trading, I am confident we will be well positioned to return to growth once the impact has passed."
As we saw with a number of other companies such as Webjet Limited (ASX: WEB) and Qantas Airways Limited (ASX: QAN) this week, Event has revealed that its CEO, chairman, and directors will take a pay cut. Hastings has taken a $200,000 pay cut for 12 months and the chairman and other non-executive directors have elected to forgo 20% of their director fees for up to 12 months.
The Chairman, Alan Rydge said: "I reiterate and support the comments of the CEO and believe that these initiatives are an appropriate demonstration of support for the executive team and the measures they are taking to manage the business to achieve the best possible outcome for the company and its shareholders."
