Charter Hall and Arena releases comprehensive trading update

The early childhood education and care (ECEC) sector’s two largest listed real estate investment trusts, Charter Hall Social Infrastructure REIT and ARENA REIT, have released updates to earnings and distribution guidance, and in the case of Arena, a trading update and notice that the March 2020 quarterly dividend payment will be deferred. 

The announcements come in the wake of the increasingly uncertain operating environment precipitated by the broadening COVID-19 outbreak and after significant falls in the companies respective share prices. 

Charter Hall withdraws earnings and distribution guidance 

Charter Hall has now formally withdrawn its FY20 earnings and distribution guidance, a move that will alleviate their commitment to pay future dividends until operating conditions have stabilised. 

That being said, Charter Hall has committed to honour their March 2020 dividend of 4.175 cents a share which will be paid on 21 April 2020. 

Commenting on the developments Fund Manager Travis Butcher said “In light of the escalating nature of the COVID-19 pandemic, it is prudent to withdraw our current earnings and distribution guidance. We will work with all stakeholders to manage through this challenging situation.”

The statement went on to note that the business was well capitalised with sufficient liquidity to fund its future pipeline through existing cash and and debt facility headroom. 

To read the statement please click here. 

Arena defers March dividend and withdraws future distribution guidance

Arena has also deferred future distribution guidance but went a step further than Charter Hall by confirming that they will defer their March quarterly distribution, expected to be around $10 million in value, until the company has greater clarity on the funding, if any, to be made available to the ECEC sector and the impact of COVID-19 on trading. 

Commenting on the move Managing Director Rob de Vos “We are  aware of  the impact  that deferring the declaration of the quarterly distribution may have on our security holders. We are closely monitoring the  situation in conjunction with our tenant partners and will communicate with security holders in respect to the distribution when we have greater clarity.”

The statement also confirmed that at this juncture Arena was trading within its debt covenants, has committed bank facilities in excess of obligations, holds cash levels that are in excess of the average quarterly dividend amounts and importantly that all tenants are currently compliant with rent obligations. 

To read the statement please click here.