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“Any industry that has its revenue switched off for six or nine months is in a critical condition,” said Mr McIntyre. “We are all as a rule pretty reliant on earned revenue in Australia, particularly performing arts companies. It’s a very tight situation.”

The company’s cashflow forecasts for the rest of this year are based on several upbeat assumptions, particularly that audiences will be allowed to return to theatres by September. Mr McIntyre said he was “cautiously optimistic” about reopening then. The earliest theatre would return to Walsh Bay, following the rebuild, would be late February 2021.

Helen Thomson and Glenn Hazeldine in STC’s No Pay? No Way! - the last show presented before the COVID-19 shutdown.

Helen Thomson and Glenn Hazeldine in STC’s No Pay? No Way! – the last show presented before the COVID-19 shutdown.Credit:Prudence Upton

“But obviously the situation in Victoria is concerning and we’re all watching that very closely,” he said.

A decision would have to be made in about a month on whether STC can open in September, to allow for preparations such as set building and rehearsals.

“We have four or five shows that are meant to take place before the end of this year, so if we can get back on stage we can draw down on that cash,” said Mr McIntyre. “If for whatever reason theatres don’t open before the end of the year, then we will have a whole new series of conversations to have with all our stakeholders.”

The KPMG auditor’s warning noted: “The conditions disclosed… indicate a material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern.”

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To make it through the financial storm, the STC board is also counting on extra assistance from federal and state governments. In particular they are looking for rent relief on the premises at Pier 4/5 from the NSW government and to benefit from a substantial slice of the federal government’s $250 million rescue package announced last week.

The board continues to meet fortnightly and has adopted “safe harbour” protection under the Corporations Act that can shield directors from liability over potential insolvency.

“We believe strongly in the future of the company so the risks are well worth taking,” said chairman Ian Narev in his introduction to the report, which is for the year to December 2019.

Mr McIntyre said STC was a “fair way” from receivership and, while cash reserves had been significantly depleted, there was still money on hand, including some earmarked for the building project.

“[But] it’s not only a matter of being able to get through this year, it’s being able to launch next year as well,” he said. “We just need to feel confident that we can put the 2021 subscription series in the market.”

Nick Galvin is Arts Editor of The Sydney Morning Herald

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