Melbourne’s stage 4 restrictions will be less of a pain for these ASX small caps
Link copied to
ASX small caps with operations in Victoria appear set to handle the new restrictions better than their larger cousins.
Yesterday the Victorian government clarified what its latest restrictions meant for business. Companies have responded by telling investors they’ll either have to shut shop during the lockdown or will able to continue as long as they adhere to certain rules.
The handful of small caps with operations potentially falling under COVID-19 restrictions have said they will be able to continue.
While at the larger end of the market, some companies conceded they are facing an uncertain future.
One small cap soldiering on is baby supplies shop Baby Bunting (ASX:BBN). It told shareholders this morning its 12 stores in metropolitan Melbourne and three in regional Victoria will stay open to support new and expectant parents.
Its distribution centre in Dandenong South will stay open too, however some adjustments will be needed to ensure compliance with the restrictions.
“With over 9,000 new babies due in Victoria during the lockdown period, new and expectant parents face many critical and specialised needs and our Melbourne stores remain open to provide the essential products and services for them,” CEO Matt Spencer said.
Dairy and health product stock Keytone Dairy (ASX:KTD) will also keep its Melbourne facilities open on the basis it is an essential food manufacturer.
It was a similar story for the company, and other food stocks with facilities in New Zealand, during our Tasman neighbour’s nationwide lockdown earlier this year.
Both Keytone and Baby Bunting saw modest share price growth this morning
Among the larger caps the news was more mixed. Some are still clarifying with the government what the restrictions mean for them.
Retailer JB Hi-Fi (ASX:JBH) was one to give its shareholders a clear picture. It will be closing all of its Melbourne stores to customers from Wednesday night for at least six weeks.
But it says it will keep enough of its operations open to support home deliveries and other commercial operations.
Vitamin seller Blackmores (ASX:BKL) will continue its manufacturing operations, with the business classed as an essential service.
Industrial stocks, meanwhile, warned there might be an impact despite not being able to quantify to what extent just yet.
Reliance (ASX:RWC), which makes plumbing and heating systems, said it was currently assessing the impact of these restrictions.
It acknowledged manufacturing operations in Melbourne could be impacted but that the company had sufficient inventory to mitigate supply chain disruptions.
Masonry product maker Adbri (ASX:ABC) said while its sites could keep operating, production levels may be cut in response to customer demand.