Event Positive About Property Despite Horror Year

Event Hospitality will progress $255 million plans for a ultra-slim Sydney CBD tower following a harrowing financial year including multiple natural disasters and the coronavirus pandemic.

The ASX-listed hospitality giant lodged the development application in July 2019 which was approved with conditions in May 2020 by the Central Sydney Planning Committee.

The 43 storey hotel-residential tower plans for George Street make up a fraction of the hospitality giant’s $2 billion property portfolio across Australia, New Zealand and Germany.

Company profit for the financial year was down 78.5 per cent to $34 million after “mandated restrictions almost entirely wiped out revenue” between March and June, and stocks dropped following the results announcement.

Event chief executive Jane Hastings said until February the group had the second-highest earnings result in its history despite the bushfires.

“The year was impacted by the most unprecedented external factors experienced in the group’s 110-year history, including bushfires, floods and Covid-19 government-mandated restrictions,” Hastings said.

“The final four months of the year was defined by the impact of Covid-19 government-mandated restrictions which immediately impacted revenue, down $262 million for the four-month period.”

The company embarked on $140 million in cost reductions including government subsidies and rent relief, and there was no final dividend given in June.

Looking forward, Event is waiting for the government to drop restrictions impacting cinemas as well as hotel trading, which has operated with lower average room rates just inside the profitable range at 66.1 per cent occupancy.

Meanwhile, increased insurance premiums worth $2 million for the office sector and ongoing leasing liabilities will negatively affect this outlook.

However, Thredbo ski resort, on which Event has a 956.9-hectare leasehold (until 2057), is expected to boost the start of the next financial year’s results.

Despite bushfires and the pandemic affecting summer and winter seasons in New South Wales, the asset recorded its third-highest result in history at $20.9 million, down 16.3 per cent on the year before.

In contrast, Victoria’s ongoing battle with Covid-19 infections and increased restrictions led to NYSE-listed Vail Resorts’ closure of its Mt Hotham and Falls Creek operations in July.