He lost $500m in three devastating weeks, but Skroo’s not backing down

Queensland shares have made a big comeback, piling on $6.7 billion in shareholder wealth since the market bottomed for many on March 19.

Apr 08, 2020, updated Apr 09, 2020
Flight Centre's Graham "Skroo'' Turner.

Flight Centre's Graham "Skroo'' Turner.

But for Graham “Skroo” Turner, the losses have been cataclysmic. Perhaps no one in Queensland has seen their personal wealth evaporate like Turner’s has.

As one of the founding directors of Flight Centre he holds 15 per cent of the stock. On March 19 that was worth $669 million. Today it is worth $148 million.

And yet he and his fellow founders are lining up for more. They will spend about $25 million to take up their rights.

More than $3 billion has been lost by Flight Centre’s shareholders and yet they are likely to come back for more in the rights issue announced this week, such is the power of a company that has survived and thrived after everything that has been thrown at it.

While there has been a rebound in share prices, there is a long way to go before the sharemarket recovers and investors are being asked to come to the rescue of companies that have been devastated by the economic collapse caused by COVID-19.

During the GFC, shareholders were called on to bail out companies at an estimated cost of $100 billion and it appears they are being called on again. This time, however, there will be debt available, which may limit the need to go for equity.

Megaport is at the other end of the scale. The Brisbane-based company is in an expansion phase and has announced a $65 million capital raising to support growth. It will be through a $50 million institutional placement at $9.50 a share. Another $15 million will be raised through a share purchase plan.

“Megaport is experiencing significant growth and intends to apply proceeds of the capital raising to further accelerate sales, product development and platform expansion opportunities in the near and medium term,” the company said.

Existing shareholders will be able to purchase up to $30,000 in new shares through the share purchase plan.

Queensland’s tech sector has been a shining light in the downturn and those providing cloud services have been reporting strong sales growth.

Megaport has reported revenue for the third quarter of $15.19 million, an increase of 10 per cent. Its shares almost halved in the rout of last month but it has climbed back to $10.43, off its lows below $7.

Brisbane data centre company NEXTDC carried out a $672 million placement amid the carnage of a week ago.

NEXTDC manging director Craig Scroggie achieving a “comprehensive take-up of the placement in the current market environment again serves to reinforce the strength of investor support for NEXTDC.

“We continue to see significant growth in underlying demand for cloud services, with the success of this placement ensuring NEXTDC does not lose critical momentum in pursuing growth opportunities.”

NEXTDC has forecast 2020 underlying EBITDA of between $100 million to $105 million. It has about $1.1 billion in liquidity.

Technology One has also held up strongly.

The big turnaround has been for Corporate Travel Management which hit its nadir at $4.70 and has since soared back to $9.26, still less than half the value it held of $22 in January, but a stunning turnaround for a travel company that was being heavily shorted before the virus hit.

Webjet also raised more than $340 million.

Casino operator Star Entertainment got as low as $1.62 before mounting its comeback to sit at $2.14.

While billions have been wiped away and returned, the mining sector has been active for acquisitions. Terracom is finalising its take over of Universal. QCoal has picked Bounty Coal out of the ashes of its collapse and Stanmore Coal is likely to be picked off by its major shareholder Singapore based Golden Energy.

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