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Premier Investments (ASX:PMV) share price slides as JobKeeper investigation launched

The Premier Investments Limited (ASX: PMV) share price is sliding lower as the company’s Just Group is investigated over JobKeeper payments.
The post Premier Investments (ASX:PMV) share price slides as JobKeeper investigation launched appeared first on The Motley Fool Australia. –

Falling asx retail share price represented by sad shopper sitting in mall

Premier Investments Limited (ASX: PMV) shares are edging lower as the retailer is investigated over JobKeeper payments. In the opening minutes of trade, the Premier Investments share price has inched 0.37% lower to $21.55.

Why is Premier Investments being investigated?

According to a report in yesterday’s The Sydney Morning Herald (SMH), the Fair Work Ombudsmen has launched an investigation into Premier Investments-owned Just Group.

Just Group’s brands include Just Jeans, Peter Alexander, Portmans, and Smiggle, among others.

While the regulator’s spokesperson did not advise SMH of the specific purpose of the investigation, it did direct the paper to “online resources covering employers’ obligations when participating in the JobKeeper program.”

In its final report for FY20, Premier Investments advised that it was eligible to receive $68.7 million in wage subsidies from seven countries. As at 25 July 2020, $49 million of the $68.7 million had been received. For the 2020 financial year, the company’s net profit after tax jumped 29% to $137.75 million – more than double the amount it received in wage subsidies.

According to the Fair Work website, employees must receive the greater of either the full JobKeeper payment, or the employee’s usual pay, including penalty rates, leave, and public holiday pay per fortnight.

The JobKeeper wage subsidy constituted $1,500 per fortnight in its first iteration (full-time). The federal government later scaled the payment down to $1,200 by October 2020.

The Treasury lists penalties for JobKeeper misappropriation as anywhere from a $55,500 fine to up to 10 years imprisonment.

Motley Fool Australia is not alleging any wrongdoing by Premier Investments.

Responses

Motley Fool Australia reached out to Premier Investments for comment and, as at the time of publication, has not received a response. 

A spokesperson for the Shop, Distributive and Allied (SDA) Employee’s Association confirmed to Motley Fool Australia the union first became aware of the investigation when reached for comment by the SMH. The spokesperson also stated the union did not initiate the complaint to Fair Work Australia.

In SMH’s report – and confirmed to Motley Fool Australia, the newspaper cites SDA concerns as “the amount paid to stand down workers [on JobKeeper] on public holidays” and “[re-crediting] leave taken by workers in March 2020, after the company closed its stores but prior to the announcement of JobKeeper.”

In a statement to SMH, Just Group said:

On 26 March 2020, Just Group made the very difficult decision to close over 1200 of its stores globally and stand down over 9000 team members due to the devastating impact of the COVID-19 health crisis.

Just Group’s priority has been to support our team members, keep them in jobs and connected to the business during this once in a century health crisis.

Over and above any obligations, and despite not being eligible for ‘JobKeeper 2’, Just Group has continued to pay over 1,500 of its full time and part-time Australian team members their contracted hours whilst those teams were unable to work due to various state government-enforced temporary store closures in October, November, December 2020, January and February 2021.

Labor MP Andrew Leigh has been putting constant pressure on Premier Investments chair Solomon Lew to repay the company’s JobKeeper subsidies. In a tweet responding to the SMH report, Mr Leigh stated

However this investigation turns out, Solomon Lew’s Premier Investments should repay the millions they got in JobKeeper. If they’re profitable enough to afford to pay a $2m CEO bonus & $57m dividend, they don’t need a govt handout.

Premier Investments share price snapshot

Over the past twelve months, the Premier Investments share price has increased by more than 30%, During the initial stages of the COVID-19 pandemic, Premier Investments shares crashed to a low of $8.13. Since then, the retailer’s share price has skyrocketed by more than 165%. In January 2021, the Premier share price hit an all-time high of $26.70.

Based on its current share price, Premier Investments has a market capitalisation of $3.44 billion.

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Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Premier Investments (ASX:PMV) share price slides as JobKeeper investigation launched appeared first on The Motley Fool Australia.

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