Premier Investments is set to repay its $15.6 million in JobKeeper subsidies to the Australian Tax Office.
As reported in its 1H21 results, the business received and quarantined the funds to pay the wages of employees who were stood down during lockdowns.
Since its 1H21 results release (March 24), there have been short lockdowns in Queensland and Western Australia where Premier has used the JobKeeper funds as intended, paying all full time and part time employees their contracted hours during lockdown.
However, upon reopening, Premier has benefitted from the increased trading from Queensland and WA, fully offsetting the cost of supporting the teams using JobKeeper.
"Therefore, the 'JobKeeper 1' funds were ultimately not required to support our teams," Premier said in a statement.
"The Premier Board, having regard to these outcomes, combined with the success of the Commonwealth and State Government’s management of COVID-19, has determined that it is now appropriate to refund the net JobKeeper benefit of $15.6 million to the Australian Tax Office," the business said.
Premier added that it remains on track to achieve its FY21 EBIT of $318 million after making the repayment.
"The Commonwealth Government’s JobKeeper initiative has been fundamental to Australia’s world leading economic growth during this once in a century global health crisis reflected in the very high level of consumer confidence and strong employment growth.
"Subject to macro-economic trading conditions remaining stable, and subject to no further significant COVID-19 national or state-wide Government mandated lockdowns, and after accounting for the repayment to the Australian Tax Office of $15.6 million, Premier is confident in its ability to meet current market consensus of Premier Retail’s FY21 EBIT (pre-AASB 16) of $318 million," the business said.
Premier's return of JobKeeper funds follow similar moves made by Super Retail Group, Toyota and Coco-Cola Amatil.
The action comes as pressure mounts on businesses who made significant profits during the pandemic to repay the funds.
In its 1H21 results Premier Retail delivered a 7.2% increase in global sales to $784.6 million, while global like-for-like sales were up 18.2%.