NAOS CEO Insights

CEO INSIGHTS – Week Ending 22 February 2019 By NAOS Asset Management

February 22, 2019
"Our research suggests that pet insurance market growth is part of the global trend of humanisation of pets, where many consumers see their dog or cat as a member of the family and need to plan for medical expense"
Alex Thomas, CEO, PetSure [Pet Insurance Administrator]
 
As part of the NAOS investment process, we pay particular attention to the comments made by company CEOs and business leaders in order to gain a greater understanding of the current investment environment and key trends that may be emerging. Below are quotes from the week which in our view detail some of the most important and prominent industry trends and economic factors impacting their businesses.
 
 
Agriculture
 
"It is a legendary year in the annals of the northern prawn industry. I’m not sure if 1974 will be repeated but this year is shaping up as a good season"
David Carter, CEO, Australian Fisheries
 
"In our consultation with industry bodies... we've heard the outlook will continue to be extremely tough for dairy farmers right across the country"
Brad Banducci, CEO, Woolworths Ltd
 
"Growing conditions have deteriorated further since 30 September 2018, with year-to-date rainfall amongst the lowest recorded in the past century and most of eastern Australia in drought"
Graham Bradley, Chairman, Graincorp 
 
Construction & Infrastructure
 
“While we have seen headwinds in some of our key markets in FY19 we expect the construction market to remain strong, with overall volumes of construction activity in NSW and Victoria of over $130 billion"
Daniel Tartak, CEO, Bingo Industries Ltd
 
"[Infrastructure] Activity is strong but we've seen some of those project commencements step out to the right"
Ryan Stokes, CEO, Seven Group
 
Packaging
 
"We delivered a solid 1H19 performance despite ongoing cost pressures and increasingly challenging macro-economic conditions across our major markets"
Graham Chipchase, CEO, Brambles
 
“It has been a very challenging start to the year. Our results reflect significant input cost headwinds and weaker demand conditions in some sectors"
Raphael Geminder, Chairman, Pact Group
 
Manufacturing
 
"Ansell’s fiscal year 2019 started amid some challenging external headwinds, including rising costs of raw materials, risks of US import tariffs, and some emerging areas of demand uncertainty in the EMEA automotive sector and in select emerging markets including Russia and Brazil"
Magnus Nicolin, CEO, Ansell
 
Mining Services
 
“We expect the demand for maintenance services to continue to be strong as resources production in Australia remains at record levels, ongoing maintenance and support on aging resources assets continues to increase and offshore LNG assets ramp up production”
Rob Velletri, MD, Monadelphous Group
 
"We expect strong market conditions to continue into 2H19, particularly in the Eastern Region, with increased bidding activity in the Western Region for new projects expected to come online during 2019”
Ian Testrow, MD, Emeco
 
Automotive
 
“The operating conditions we experienced during the period in the consumer auto environment were some of the worst we have encountered for a decade or so”
Robbie Blau, CEO, SG Fleet
 
“In the absence of wage growth and in the context of the perceived negative wealth effect resulting from the housing downturn, consumers just aren’t spending or are delaying purchase decisions. This is particularly the case for larger ticket items, with private new vehicle sales down 11.5% nationally during the period"
Robbie Blau, CEO, SG Fleet
 
“The combined effects of regulatory changes to automotive finance and insurance, the negative wealth sentiment in property prices, particularly in Sydney and Melbourne, and the increased and wider tightening of lending practices have all affected the automotive sector”
John McConnell, MD, Automotive Holdings Group Ltd
 
Insurance
 
“Unfortunately, consumer sentiment is running against most forms of discretionary spending including private health insurance"
Mark Fitzgibbon, CEO, nib
 
"Our research suggests that pet insurance market growth is part of the global trend of humanisation of pets, where many consumers see their dog or cat as a member of the family and need to plan for medical expense"
Alex Thomas, CEO, PetSure [Pet Insurance Administrator]
 
Television
 
"[Downgraded earnings] It's mainly that softer ad market. We had an extraordinary year of ratings in 2018, a leading share of the metropolitan TV ad market, and, unfortunately, a softer ad market – and quite a bit softer, in December for example, and that's carried through January"
Tim Worner, CEO, Seven West Media Ltd
 
Property
 
"[Residential] Housing stock has caught up to demand, credit tightening and falling house prices weighing on confidence"
Fletcher Building Market Announcement
 
“We expect further price declines in residential land of around 5 per cent over this calendar year, concentrated in Sydney and Melbourne" 
Mark Steinert, CEO, Stockland
 
Logistics 
 
"We're really concerned with the impact in December, January and February in Queensland. We have $1bn of revenue annually in Qld but some of our operations in mining and coal businesses haven't worked for 14 or 15 days because of the rain and floods. I've never seen rain like it and it is going to impact"
Michael Byrne, CEO, Toll Holdings
 

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Important information: This material has been prepared by NAOS Asset Management Limited (ABN 23 107 624 126, AFSL 273529) (NAOS) for general information purposes only and must not be construed as investment advice. Certain economic, market or company information contained in this material may have been obtained from published sources prepared by third parties. Nothing contained herein should be construed as granting by implication or otherwise, any license or right to use such third party content without the written permission of the owner.

NAOS Insights CEO Insights

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