This article is from the Australian Property Journal archive
ASX-listed flexible workspace provider Victory Offices says initial signs of recovery have emerged as employees again leave the home for work, and expects to move to profitability in the 2023 financial year after posting a first half loss of $25.9 million.
Chaired by former Victorian Premier Steve Bracks, consolidated Victorian occupancy rates have increased to 45% from a low of 20% during lockdown, with two centres recording occupancy of over 80%. Workers returned to the Melbourne CBD yesterday after mask mandates and working from home orders were lifted.
Average occupancy in New South Wales was at 65% with two centres recording occupancy at over 70%. Conditions in Western Australian and Queensland improved to 60% and 48% respectively.
First-half revenue from flexible workspaces was $7.0 million compared to $6.6 million in the prior corresponding period. In the first half of FY20 – prior to the pandemic – revenue was $26.5 million.
Victory was locked out of three CBD buildings in Sydney and Melbourne in July by landlord AMP Capital after defaulting on rent. AMP Capital reportedly claimed that Victory had not paid rent since before the pandemic, and had defaulted on rent in 2019.
Victory’s share price had sat as high as $2.14 in October of 2019 before the pandemic forced employees to work from home, and its share price has been reduced to just 11c.
The company will focus on delivering cost savings including staffing, leasing and discretionary spend, and anticipates a return to profitability in FY23, it said.
The $25.9 million loss was a worse result than the previous year’s $17.7 million, while the underlying net loss after tax was $18.6 million, after a $14.1 million loss.
“Over the past two years we have had to navigate the challenging impacts of COVID-19 on our business and clients. Whilst it has been a difficult and unpredictable time, we are encouraged by the initial green shoots of recovery that we have seen within our business,” said Dan Baxter, Victory’s CEO and managing director.
Co-CEO Manisha Angirish said, “It is very pleasing to see the ongoing easing of restrictions and changing guidance in relation to working from home”.
“We continue to believe that the flexible workspace industry is a leading indicator of economic recovery post-COVID. The board believes Victory Offices remains well placed to meet the expectation that flexible workspace will be more strategically important to the way the world conducts business in the future.”
An impairment on assets of $2.4 million was recognised largely due to the impact on short-term cash flows of the pandemic, while a reversal of impairment of assets of $3.2 million from June occurred relating to surrendered leases.
