Companies that are doomed due to the coronavirus outbreak

[greggles]

With a thread on bargains already out there, I thought it was time for a thread on companies that are likely doomed as a result of the coronavirus outbreak.

Would anyone like to nominate any ASX-listed companies that they believe are likely to crash and burn during 2020 as a result of the coronavirus outbreak? There must be quite a few that will be kaput by the end of the year. I think the retail and travel sectors in particular will see quite a few casualties.

I'll start with Retail Food Group. As if things weren't bad enough for this company already with a mountain of debt and shrinking retail operations. The last I heard they were hoping to sell some assets to pay down debt. I can't see that plan being particularly viable now.

They withdrew their FY20 Guidance on 24 March and with tumbleweeds currently blowing through shopping centres in Australia, I don't see how they can manage to survive for much longer.

 

[Dona Ferentes]

If the ruling party stuck to it's ideology, then Virgin Australia VAH should be in strife. But somehow a lifeline may be proffered.

When Ansett went down, something fell into place. And in a globally challenged industry,, shouldn't be hard to get some planes and pilots.

We're a good country for DUOPOLIES. Just don't try to be Compass I or II.

 

[sptrawler]

If the ruling party stuck to it's ideology, then Virgin Australia VAH should be in strife. But somehow a lifeline may be proffered.

When Ansett went down, something fell into place. And in a globally challenged industry,, shouldn't be hard to get some planes and pilots.

We're a good country for DUOPOLIES. Just don't try to be Compass I or II.

I agree with you Dona, I think VAH will get a lifeline, but they need to get their act together, their business model has been pretty average going by their recent results.
AMP may struggle, with their wealth management, not only is there a complete lack of trust, now there will be a complete lack of earnings.
I don't know about going broke, but they may be a takeover target, for a bold and brave company.

 

[jbocker]

I am looking at my holdings. Now where do I start. Give me a minute..
Eeeny..
Meeny..
Miney...

 

[UMike]

I am looking at my holdings. Now where do I start. Give me a minute..
Eeeny..
Meeny..
Miney...

Not familiar with any of those stocks.

I think Reits will be forever damaged.
By the time this is over so many people will be used to shopping online that foot traffic allure will as obsolete as floppy drives.
That will go for most retail outlets also.

 

[Country Lad]

I posted about 9 months ago that I had no idea how all those women's clothing shops were surviving with very few customers whenever I walked past. The question now becomes where will the shopping centres find the suckers to fill those shops.

 

[MovingAverage]

companies that are likely doomed as a result of the coronavirus outbreak.

How about all companies listed on the ASX...no seriously, I mean that. With the exception of a few, there is not a company on the ASX that has not been hammered by this virus and will not have major problems in 2020 as a result of this.

 

[qldfrog]

How about all companies listed on the ASX...no seriously, I mean that. With the exception of a few, there is not a company on the ASX that has not been hammered by this virus and will not have major problems in 2020 as a result of this.

Gold miners should be ok, maybe bought back same as agricultural companies
Companies like Kathmandu or even jbhifi, harvey norman, are dinosaurs
all RE and associated banks, broker, insurance etc should go down in flame as well
What is left? A few tech for local market
Rio/bhp may stay independent

RE will move to casino and hotels for Chinese along coastlines
Long term CSL till bought by a bigger player
Transurban, tolls, retail energy will survive, telstra, maybe tpg
Woolies and coles.. that's the base

 

[Dona Ferentes]

Is this action a gift of life support or merely prolonging the agony?

All foreign investment in Australia will now require approval in a Federal Government move designed to prevent international raids on struggling companies hit by the coronavirus pandemic.

But from [10 days ago], the Foreign Investment Review Board will scrutinise every single purchase application, regardless of its value.

https://www.abc.net.au/news/2020-03...ctions-australian-assets-coronavirus/12101332

I guess we wait for the dust to settle. we will see if we are mendicant. Also the geopolitical realignment is interesting; the USA isn't exactly on top of of its challenges, and China is on a charm offensive.

Meantime, big stimulus money is being pumped in to keep the Aust economy ticking over and avoiding collapse. The interlinking and hidden debt bring many undone; it will see many fail/ fall in the property sector (both corporate and individual). Banks are much better capitalised than GFC, but it will still be a strain. Travel and hospitality may take years to recover. Some sub-sectors are having booms.

The longer the 'hibernation' the worse it will be, so its always a trade-off as to when a staggered return to 'normal' is allowed. Now, at Easter, the Australian experience dealing with the virus pandemic has been better than elsewhere, in terms of containment. Being an island helps; but what will winter bring?

I read somewhere The French central bank estimated that every two weeks of lockdown could reduce annual economic activity in France by 1.5% - can we have more than a few months and get through without major damage?

 

[Dona Ferentes]

Tough retail conditions that have persisted for years and accelerated during the coronavirus pandemic have claimed another victim with PAS Group placed into voluntary administration.

The ASX-listed PAS Group ( PGR) has a portfolio of fashion brands including Black Pepper, Review and Yarra Trail, and has been struggling for years.

 

[Garpal Gumnut]

The smaller banks may need to amalgamate under their underperforming loan burden.

Prepare for ANZ/NAB which will probably be called TTB or NAB if it's a takeover.

gg

 

[Knobby22]

The smaller banks may need to amalgamate under their underperforming loan burden.

Prepare for ANZ/NAB which will probably be called TTB or NAB if it's a takeover.

gg

Ok I give in, why TTB?

 

[jbocker]

Ok I give in, why TTB?

I will guess Trans Tasman Bank?
But GG might be a little less generous ...Two Tools Bank?

 

[Garpal Gumnut]

I will guess Trans Tasman Bank?
But GG might be a little less generous ...Two Tools Bank?

@jbocker wins TMOSW prize which will be presented by John Cleese with a lifetime membership to the Society of Useless Financial Advisors Weekly Tip Sheet which as it happens is emailed out daily and is sponsored by ANZ and NAB.

gg

 

[Dona Ferentes]

None specifically, but in the USA,

As of June 15, there were nearly 140,000 total business closures on Yelp since March 1.

Of all business closures on Yelp since March 1, 41% are permanent closures

methodology and further data can be studied at:

https://www.yelpeconomicaverage.com/yelp-coronavirus-economic-impact-report.html