Category: Business

Alongside the Bar Broadway, Young Hotels owns the Illinois Hotel in Five Dock, the Five Dock Hotel, the Royal Hotel Top Ryde, the Concord Hotel in Concord West and the Mortlake Hotel. The Young family also owns the Wisemans Ferry Inn on the Hawkesbury.

“We’re very excited about taking on the challenge of running the Bar Broadway. There’s a lot of development going on in the area,” Mr Young told The Australian Financial Review.

Asked about the current appetite for pubs, Mr Young said astute operators were adding value to their portfolios.

“When good assets came up for sale, they are willing to pay a price for them,”

The acquisition of the Chippendale hotel follows Young Hotels selling the Friend in Hand Hotel in Glebe in the inner west for $11 million to Momento Hospitality Group in May.

“My mum and dad had that hotel in Glebe a long time ago,” Mr Young said.

The Bar Broadway sold with a 24-hour hotel license, 28 pokies, a bar and two levels with 36 accommodation beds. There is the opportunity to develop two additional upper floors of accommodation.

It was the first time in nearly two decades that both the freehold and leasehold interests of the hotel had been stapled together and offered as one investment.

The freehold was offered by Jenni Halpin, who had previously jointly owned it with her late husband Robert, who passed away in 2006. The leasehold was held by publican Justin Aitken’s Kasajumi Holdings.

JLL’s John Musca and Ben McDonald and Knight Frank’s Mike Wheatley brokered the sale on behalf of the long-term vendors, who are both exiting the industry to retire and pursue other commercial interests.

Mr McDonald highlighted the unparalleled location of the asset as being the key driver of interest in the campaign.

The Tech Central Precinct is set to house 250,000 sq m of new office space, whilst the NSW government is spending close to $1 billion on upgrading Central Station.

“However, these issues might be able to be resolved through FDA’s routine infant formula submission process. Given the nature of the infant formula supply challenges and the need to quickly address the shortage the FDA is deferring consideration of these specific requests at this time and prioritizing others for review.”

A2 Milk’s shares sank as much as 9 per cent early on Wednesday but ended the day 35¢, or 6.8 per cent, lower to $4.76 each.

Chief executive David Bortolussi was hoping to follow smaller rivals Bubs Australia and Bellamy’s Organic. Both those companies got permission to sell infant formula under the US government’s Operation Fly Formula.

Mr Bortolussi was unavailable for further comment on the FDA decision. It is not clear whether the company plans to keep pursuing this path to import tins via the agency’s routine infant formula submission process.

A2 Milk lodged its application with the FDA under an “enforcement discretion” policy in May. A2 Milk historically focused on the China market for its a2 Platinum formula and does not sell any tins in the US market, but does sell its fresh milk products.

The formula shortage occurred when a major US factory was shut down due to a contamination scare. This plant is now open again, but stock remains tight.

An FDA spokesman said earlier that it continued to work around the clock to address current supply challenges, including reviewing a number of requests as quickly as possible from other manufacturers seeking to import.

“This includes a review of information pertaining to nutritional adequacy and safety, including microbiological testing, labelling, and additional information about facility production and inspection history. The FDA will continue to use this information to consider on a case-by-case basis opportunities to exercise enforcement discretion.”

On August 5, Nestlé Health Science from the Netherlands was the last company to gain approval from the FDA to sell 37,500 cans (about 495,000 8-ounce bottles) of its hypoallergenic formula made for those babies with cow’s milk protein allergy or multiple food allergies. The product is expected to be available this month.

Wilson Advisory analyst James Ferrier said this was a disappointing outcome for a2 Milk given a possible short-term earnings bump and an opportunity to build brand awareness in the US.

He warned it also created some uncertainty for those players delivering tins now but seeking more permanent access beyond November 14, the proposed end date for such imports.

Mr Ferrier did not change any forecasts since he did not assume any sales contribution under the FDA’s temporary policy.

Virgin has its eye on legions of high-flying travelers across 29 different loyalty programs including Cathay Pacific’s Marco Polo Club, Malaysia Airlines Enrich and British Airways’ Executive Club, among others.

Here’s what you need to know about Virgin Australia’s Velocity Discover Gold status match program.

How long does the Velocity Discover Gold offer run for?

Unlike previous status match offers, there doesn’t appear to be a closing date by which you need to register your interest or apply to Virgin Australia for your existing status to be matched this time around.

So, at least for now until advised otherwise, the door has been bolted open for travelers new to the Velocity program to road-test Gold and strive for the challenge to receive a full year of benefits.

Who is eligible for the Velocity Discover Gold fast track?

Members of frequent flyer programs from nearly 30 airlines are being invited to attempt the Discover Gold challenge by providing proof of current Gold status or higher.

Virgin’s Velocity Gold status match is now available to frequent flyers of all Oneworld airlines.

It’s important to note that if you have previously held a Silver, Gold or Platinum status membership with Velocity Frequent Flyer, you sadly will not qualify for a Discover Gold membership. This also applies to members who have previously held a Pilot Gold trial membership in Virgin Australia’s Business Flyer program.

Any member of Virgin’s Velocity Frequent Flyer program holding its lowest Red tier can apply for this status match, provided you have never previously held Silver, Gold or Platinum status. This makes the offer perfect for new members and those who don’t often fly Virgin and have never progressed past the entry-level tier.

Velocity membership is limited in its geographic reach – you must be a resident of Australia, New Zealand, the Cook Islands, Fiji, Papua New Guinea, Samoa, Solomon Islands, Tonga, or Vanuatu.

If you’re not already a member, joining Velocity Frequent Flyer is free.

Which airlines will Virgin Australia status match against?

Virgin Australia’s Velocity Discover Gold promotion is open to the higher-ranked frequent flyers of nine Oneworld member airlines, 10 Star Alliance partners (across seven loyalty programs), eight SkyTeam carriers and five more unaffiliated with the big three collectives.

Major airlines being targeted by the status match include Qantas, naturally – along with Air New Zealand, Emirates, Fiji Airways and former partner Delta Air Lines.

Unsurprisingly, loyal travelers of Virgin’s newest chums, United Airlines and Qatar Airways, are not eligible, nor are members of its existing partner roster, including Singapore Airlines, Etihad Airways and others.

Here’s a full list of airlines and their eligible membership tiers:

Oneworld:

Qantas: Gold, Platinum, Platinum One
American Airlines: Advantage Platinum, Platinum Pro, Executive Platinum
British Airways: Executive Club Silver, Gold
Cathay Pacific: Marco Polo Club Gold, Diamond
Fiji Airways: Tabua Club Plus
Finnair: Plus Gold, Platinum
Iberia: Iberia Plus Gold, Platinum, Singular, Infinite, Infinite Prime
Japanese Airlines: JMB Sapphire, JGC Premier, JMB Diamond
Malaysia Airlines: Henry Gold, Platinum

Star Alliance:

AirChina: Phoenix Miles Gold, Platinum
Air India: Flying Returns Maharajah Club, Golden Edge Club
Air New Zealand: Airpoints Gold, Elite
Asian: Asiana Club Platinum, Diamond, Diamond Plus
Austrian Airlines / Lufthansa / Swiss Airlines: Miles & More HON Circle, Senator
Thai Airways: Royal Orchid Plus Gold, Platinum
EVA Air: Infinity Mileage Lands Gold, Diamond
Scandinavian Airlines: Euro Bonus Gold, Platinum

SkyTeam:

ChinaAirlines: Dynasty Flyer Emerald, Paragon
Eastern China: Eastern Miles Elite Status Silver, Gold
Delta Airlines: Skymiles Gold, Platinum
Air France / KLM Dutch Airlines: Flying Blue Gold, Platinum
Viet Nam Airlines: Lotusmiles Titanium, Gold, Platinum
Indonesian Garuda: Garuda Miles Gold, Platinum
Korean Air: Skypass Morning Calm Premium Club, Million Miler Club

Others:

Air Niugini: Gold Executive Club
Emirates: Skywards Gold, Platinum
LATAM: LATAM Pass Platinum, Black
Philippine Airlines: Mabuhay Miles Premier Elite, Million Miler
Royal Brunei: Royal Skies Elite Gold

‘Unpublished’ frequent flyer tiers such as Qantas’ Chairman’s Lounge, Air New Zealand’s Elite Priority one and Emirates iQ are ineligible for Virgin’s status match offer.

Starting off with Velocity Discover Gold status

Once approved for Virgin’s Gold-grade status match, you’ll enjoy three months of what Virgin Velocity terms ‘Discover Gold’ status.

This is a slightly tailored version of the standard Velocity Gold offering, with most of the standard Gold perks offered, including priority check-in and boarding, airport lounge access, additional cabin baggage in economy, a boosted checked baggage allowance, and more.

All that’s missing from your trial Discover Gold membership compared to the full Velocity Gold package is a Gold baggage tag, access to guaranteed reward seats, the ability to opt-in for equivalent status with a hotel partner (choose between IHG and Hilton) and a car hire partner (either Europcar or Hertz) and parental pause rights.

Earning a full year of Velocity Gold status

During your three-month trial period, you’ll need to do two things to ascend to a full year of Velocity Gold status: earn 80 status credits and fly at least one eligible sector.

(Compare that to the usual Velocity Gold benchmark of 500 status credits and four eligible sectors and you can appreciate how fast this fast-track is.)

The single ‘eligible sector’ is easy enough to check off: it’s one paid Virgin Australia flight on any route, on any Choice, Flex or Business fare (but excluding Velocity Reward Seats), as long as there’s a VA flight number on your ticket .

And those 80 status credits? They’re a breeze to pocket.

You’ll earn some from that eligible flight, and the remainder can come from:

• additional flying on Virgin;
• ‘family pooling’ (collecting the status credits earned by other family members);
• through Velocity partners such as by shopping at Coles, scanning your Flybuys card, and earning status credits when your Velocity Frequent Flyer account is linked.

At the conclusion of the three-month trial period, provided you’ve completed the challenge, you’ll tick over to full Velocity Gold and remain there for a year.

(If you don’t manage to complete the challenge in those 12 weeks, you’ll spend the next year at Velocity Silver, before returning to regular reviews based on future performance.

Fast-track your Discover Gold challenge with family pooling, Flybuys

Tools like Velocity’s ‘family pooling’ can make the process of earning 80 status credits even easier.

This lets you funnel status credits from a family member’s account – such as your partner or children, provided they live at the same address – into your own Velocity account.

Whenever that family member travels, you’ll pocket their status credits, bringing you closer to that goal of 80 status credits.

Flying Virgin business class between Sydney and Melbourne? That’s as good as Gold.

If you took those return trips above together, for example, you’d qualify in half the time, as you’d be collecting not only your own status credits, but those from your family member, too.

Through the Flybuys rewards program, you can also earn one Velocity status credit per $100 spent at Coles supermarkets, when your Flybuys and Velocity accounts are linked.

Just be aware that Flybuys only sends across your status credits once a month, rather than immediately after every shop, so status credits earned via retail purchases made towards the end of your Discover Gold period may not appear in your account until after the challenge.

How to apply for the Velocity Discover Gold status fast track

Ready to get started on the path to elite Velocity status?

Sadly, Virgin Australia’s website is light on detail as to how frequent flyers can apply for this challenge. The best way we’ve found is to contact the airline through its feedback form, where you can make clear your request to take on the challenge.

The status match is open to those who have never previously held Velocity Silver, Gold or Platinum status.

You’ll need to indicate the status you hold, include a photograph or screenshot of your eligible frequent flyer card, and choose when you want your three-month period to begin, which needs to be within the next few weeks.

Once your request has been approved, you’ll then begin your three months as a Discover Gold member, putting you on the path to take home real Velocity Gold.

MoneyTalks is Stockhead’s regular drill down into what stocks investors are looking at right now. We’ll tap our extensive list of experts to hear what’s hot, their top picks, and what they’re looking out for.

Today we hear from Equitable Investors director Martin Pretty.

What’s hot right now?

Pretty says we are in an environment where there has been a rush to the most liquid investments – or to the exit, which has made capital scarce.

“You can see that clearly in the IPO market, where capital raised from IPOs in Australasia is down 88% so far in calendar 2022, relative to the same point in time in 2021, based on Dealogic data.

“Globally the decline is 74%.

“In the unlisted world the issue is visible when stories bubble to the surface such as would-be unicorn Metigy being placed in administration and neobank Volt being forced to wind down after failing to raise capital,” he says.

“Last quarter we counted 374 ASX-listed ‘cash burners’, excluding those in the mining and energy sector, that had reported negative operating cash flow.

“Nearly half of them had one year or less worth of cash remaining based on their “burn rate” in that quarter,” Pretty adds.

“We also counted another 180-odd indebted ‘zombie’ companies that were not covering their interest expense with EBITDA.”

Pretty’s thesis is that the second half of calendar 2022 will be rich with opportunities to apply capital at attractive prices and help below-the-radar listed companies’ de-risk their financial position and improve their strategic positioning.

“Already we have seen a number of these opportunities and expect them to continue to flow,” he explains.

top picks

The MedTech that connects pharmacists and pharmaceutical companies with consumers launched a $14.6m equity raising in July on the back of a deal to buy out its one significant competitor in the Australian market, GuildLink, and take on the Pharmacy Guild as a strategic shareholder with about 13%.

“The acquisition was paid for in shares issued to the Guild at a premium to the price of the entitlement offer (the retail offer is currently open and Equitable Investors is among the sub-underwriters).

“It brings to an end years of competition between MDR and GuildLink and positions MDR’s Australian business with pro-forma revenue of $21.2m for positive EBITDA – and a network of over 5,000 pharmacies and 2.9m digitally connected patients.

“That’s on top-of the $53.6m revenue MDR generated in the US in FY22.”

Pretty adds the capital raising material was compared to its pre-deal market cap of ~$55m.

“While it wasn’t required to fund the GuildLink acquisition, it takes funding off the table as a key short-term risk that has clouded MDR, which has $4.2m to pay in an earn-out for its US acquisition.”

LER has a process for extracting rosin and terpenes from pine with an off-take agreement with a major chemicals company, Japan’s Yasuhara, the company has secured pine feedstock and a processing plant which was under construction with 8,000 tonnes annual capacity.

Rosin and terpene are essential ingredients in everyday products such as sticky tape, paint, disinfectants, and chewing gum, with the direct market for pine chemicals estimated at US$10bn.

“Having executed on a 4,000 tpa pilot plant, moved to construct the 8,000 tpa plant and made its first delivery to Yasuhara in the June quarter of 2021, LER’s plant was struck by lightning, resulting in an explosion and injuries,” Pretty says.

“This led to the suspension of trade in LER shares on the ASX through to July 2022.

“LER has now re-emerged with insurance coverage providing $4.6m and investors in July providing $5.1m in new equity, with a further $3.4m subject to shareholder approval, and $1.5m in convertible notes.

“Yashuhara’s offtake agreement was reaffirmed and LEr is now installing plant with double the previous capacity at 16,000 tpa.

“Doubling the capacity of the initial site, along with significant price increases in rosins and terpenes, means LER is now looking at potential revenue of $68m instead of the earlier $25m target.

“LER now has to prove it can produce at scale – prior to the lightning strike it had been working through plant optimization and hadn’t yet ramped up.”

Data center operator DXN has been facing up to a situation where its share price had declined dramatically over three years and it had a $4m debt facility to service against $1.9m cash at June 30, while producing negative operating cash flow in FY22, Pretty explains .

“Its market cap entering the current month was less than $9m but it has taken action and resolved to sell its business assets for $26m in cash to an industry player.

“The result, DXC expects, is that $0.011 to $0.013 a share in cash will be distributed to shareholders, compared to its share price of $0.006 at the end of July.

“But DXN still had to raise $2.125m in new equity at $0.085 a share to fund its working capital up until the completion of the sale, which is expected by November 30.”

Its debt funder, Pure Asset Management, committed to subscribe to at least two thirds of the placement and Equitable Investors also participated.

The views, information, or opinions expressed in the interviews in this article are solely those of the interviewee and do not represent the views of Stockhead.

Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.