The Premier Investments Limited (ASX: PMV) share price is on the move on Monday following the release of an announcement.
At the time of writing, the retail conglomerate's shares are down over 1% to $25.99.
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What did Premier Investments announce?
This morning Premier Investments provided an update on the $15.6 million of JobKeeper payments it received during the pandemic.
Given the company's incredible profit growth, it was heavily criticised for not following the lead of other on-form retailers by returning the funds to the government.
Instead, the company held onto the funds and "quarantined" them with the intention of putting them to use to fund the wages of employees who may be stood down under future State Government mandated COVID-19 lockdowns.
This morning the company advised that since the release of its first half results, there have been short snap lockdowns in Queensland and Western Australia.
During these lockdowns, the company used the JobKeeper funds to pay its full time and part time team members their contracted hours whilst they were stood down and unable to attend work.
However, following the lockdowns and upon reopening, increased trading from the combined States has fully offset the cost of supporting its teams through these lockdowns. Therefore, the JobKeeper funds were ultimately not required.
In light of this, the Premier Board, having regard to these outcomes and the success of the Government's management of COVID-19, has determined that it is now appropriate to refund the net JobKeeper benefit of $15.6 million to the Australian Tax Office.
What impact will this have?
The good news for shareholders and ultimately the Premier Investments share price, is the returning of these funds is not expected to prevent the company from delivering a strong result in FY 2021.
It explained: "Subject to macro-economic trading conditions remaining stable, and subject to no further significant COVID-19 national or state-wide Government mandated lockdowns, and after accounting for the repayment to the Australian Tax Office of $15.6 million, Premier is confident in its ability to meet current market consensus of Premier Retail's FY21 EBIT (pre-AASB 16) of $318 million."
