A shareholder wants major Queenstown tourism business Skyline to pay back the wage subsidy after achieving a healthy profit.
But Skyline’s board is not keen, leaked documents show.
Skyline Enterprises Ltd, which operates the Skyline parks in Queenstown and Rotorua and has multiple other interests here and overseas, recorded a $56.7million net profit after tax in the last financial year, which was a difficult year for the tourism sector.
In documents seen by the Otago Daily Times, including reports to the company’s September annual meeting, shareholders John Hilhorst and Cath Gilmour have put forward a shareholders motion to pay back the $7.9million wage subsidy the company took last year.
Ultimately it was a ‘‘moral question’’ for the company, their motion to shareholders said.
‘‘But first, would it be financially and reputationally prudent to return the $7.9million?’’
Despite Covid-19 uncertainty, the company’s annual report was ‘‘bullish’’, they said.
‘‘While 600 employees lost their jobs as the company responded to Covid, the wage subsidy has effectively translated into $7.9million great company profits, and from there into increased equity, to the benefit of the shareholders.’’
As shareholders they were conscious of their privilege, the couple said.
While the operating revenue was cut in half by Covid-19 restrictions, the company retained profitability through a 38% cut in operating expenses and employee benefits.
‘‘There’s no question that Skyline was right to seek government assistance at that time. The question is, should it now join the 18,000 companies that have voluntarily returned some $730 million to our public coffers.’’
When contacted, Mr Hilhorst said he was encouraging all shareholders to get behind the motion.
‘‘We have historically been proud owners of Skyline and considered that it embodied a lot of the South Island and Southland values of innovation, success and resilience, but also of community, and the people in it so we were surprised after the declaration of a significant after tax profit that there was not a willingness to give back,’’ he said.
However, in an attached document to the motion, Skyline chairwoman Jan Hunt wrote to shareholders saying the board of directors did not support the proposal.
In these times, the company had to keep adequate cash reserves to cover wider costs associated with maintaining the business, she said.
Ms Hunt said in her letter that the subsidy was only ever used to pay the company’s staff ‘‘at a time of nil and severely impacted revenue’’ was intended.
When contacted, Ms Hunt confirmed the board’s view and said it was ‘‘a long and slow journey’’ for the business to recover from the impacts of the pandemic.