Support and understanding from landlords, and financial institutions like ANZ, helped Village get through the COVID-19 related financial crisis, says Raffe.
"We are very much confident that people want to go out – they want to go to the theme parks, they want to go to the cinema. They just need to be able to do so.” – Julie Raffe
“It became very obvious to us having a really strong relationship with a financer who really understood our business and understood what was happening to our business, [was crucial],” Raffe explained on a call with ANZ staff.
Raffe said an import factor was partners that “understood it was a temporary issue and that fundamentally the business was very strong”.
This was critical for Village, the entertainment conglomerate with assets in film, cinemas and theme parks across Australia, Raffe said - particularly in the group’s cinema business, which shut down entirely at the height of pandemic-related lockdown.
“We could not possibly have foreseen the impact [the pandemic] would have on our business,” she said.
Now, despite some supply chain disruptions causing delays to some new construction plans, the group is confident in the future.
“For us, it's been about cost management, it's been about cash-flow management,” Raffe said. “And perhaps most importantly, it's been about managing the morale of the staff and making sure they're all okay.”
“We are very much confident that people want to go out – they want to go to the theme parks, they want to go to the cinema. They just need to be able to do so.”
ANZ has banked Village since 1954. As well as dealing with the pandemic-related issues, Village shareholders voted to privatise the group in December, making for a busy period of change. Part of ANZ’s role is to understand what drives its customer’s businesses and work out how to help.
Raffe said Village’s various divisions had been impacted differently by the initial lockdowns, with the company’s theme parks only closed through the March to June period of 2020 – and have been “pretty stable since then”.
Notably, Raffe said the company had lost “roughly 20 per cent” of its visitor base, largely due to the end of international travel into and out of Australia. But returning, captured domestic tourism has begun to fill that gap.
“Although we started off quite down… at the moment we are trading only about 5 per cent off where we were in fiscal 2019,” she said. “So the Australians have really filled in the gaps.”
The outward-bound spend from Australians shifting onshore was something ANZ has seen across the board, across various industries.
Previously we thought a lot of the Australian economy had a critical dependency on university student, tourism, international migration. But what we're seeing is, because we can't go offshore, we're spending that money here.
It’s encouraging for Australian businesses to see that spend going locally, but I personally question how long that will last.
At some stage we'll start to see travel returning and some of those other fundamentals returning to driving economic growth in a more sustainable, long-term way. But it is also really pleasing to see companies like Village thriving in the current market.
At the beginning of the pandemic, Village employed around 7,000 employees, Raffe said, including some 5,000 casual workers. At the height of COVID the group had to stand down a large percentage of its workforce, and work with each one individually on government assistance programs.
This was a “massive exercise”, Raffe said, but important. “We need to make sure we’re looking after our staff.”
“It's really about trying to stay engaged with the employee community and to make sure they stay connected to each other and to us,” she said.
Throughout a period of great change, the group was committed to communicating its position internally, Raffe said - holding town halls, telling them negatives as well as the positives.
“Credibility has been absolutely key here,” she said. “We need to let people know what is really happening.”
Raffe said Village was now focussed on new areas of growth, and was confident the “industry worldwide has actually steadied” and would “show us the strength of the business going forward”.
“It's been a tough year,” she said. “But what I would say is we're actually seeing the light and we’re now profitable again. And [Village will] bounce back if and when we can get this pandemic under control.”
Tammy Medard is Managing Director Institutional Australia at ANZ
This article was originally published on ANZ’s Institutional website