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Redcape Shuts Down Pub Portfolio

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ASX-listed Redcape Hotel Group will shut down its entire pub portfolio in response to Covid-19 restrictions in another blow to the hospitality industry.

The group which runs 32 venues and employs more than 800 people made the decision to close venues to maintain the business, which costs about $10 million per quarter to operate.

Prime minister Scott Morrison announced a range of further restrictions following a national cabinet meeting on Tuesday on indoor and outdoor gatherings.

Other hospitality-based companies on the ASX also announced their response to government restrictions.

Ardent Leisure Group temporarily closed Dreamworld, Whitewater World, Q1 observation deck Skypoint Tower and their US based Main Event party and activity centres.

Event Hospitality and Entertainment have closed 142 cinemas in Australia, New Zealand and Germany and were in the process of assessing the impact on their 54 hotels including Rydges and Thredbo Alpine Village.

Village Roadshow Limited also closed their Gold Coast theme parks and cinemas however Sea World Resort would continue to operate as an accommodation provider and would maintain the welfare of its animals.

Related: Moelis Settles on $104m Byron Bay Beach Hotel

▲ An aerial shot of Dreamworld showing roller coasters, water park, cars in the parking lot and the Gold Coast hinterland in the distance.
▲ Dreamworld and other Gold Coast theme parks have closed in-line with COVID-19 restrictions on outdoor activity.


Redcape pubs located in NSW and Queensland would close 16 bottle shops, while accommodation at two of its hotels would remain open.

Redcape chief executive officer Dan Brady said the group has $100 million cash on hand and management has extensive experience operating pubs through difficult and challenging times.

“As a management team we are doing all that we can to ensure we are well positioned for a successful return to full operations of our traditionally resilient business,” Brady said.

“In what is a very difficult time for our industry, our business and our people, we are committed to working with our staff, communities, governments and regulators to limit the spread of Covid-19 and minimise the impact on our people and business.”

Redcape indicated they would not be paying a March quarter distribution and gearing as of 12 March was at the bottom end of their target range at 37.5 per cent.

The group owns 30 of its pub assets and has limited commitment to third party landlords.

The group intends to stand down the majority of its permanent staff and all employees affected by the closure, including casuals, would be paid in full until the end of the month.

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Article originally posted at: https://theurbandeveloper.com/articles/redcape-shuts-down-pub-portfolio