Briscoes and Rebel Sports sales grow almost 30 percent on last year, while Tourism Holdings is boosted by domestic tourists using its camper vans
Briscoe’s sales ahead of last year
Despite the economic slowdown, sales at Briscoe Group are proving to be more resilient than expected, with the retailer reporting second quarter revenues were up by almost 30 percent year-on-year and sporting goods recording growth of more than 33 percent for the period ended July 26.
The operator of the Briscoes and Rebel Sports chains, posted sales of $195.4 million compared with $152.3 million for the same period in 2019. Homeware sales increased 25 percent year-on-year, with online sales accounting for 23 percent of sales in the quarter. However, for the half-year to July 26 group sales declined 3.4 percent due to store closures for almost two months.
Managing director Rod Duke said the group had experienced a significant lift in sales since the lockdown restrictions eased. Briscoe’s shares closed up 1.5 percent on Friday at $3.42.
Markets holding steady
The NZ sharemarket edged higher last week gaining 0.8 percent to close at 11,727 while the Australian ASX200 index lost ground ending the week lower at 5,928, a fall of 1.6 percent. In the US, equity markets had a good week following better than expected results from the big four technology stocks Apple, Amazon, Alphabet/Google and Facebook. The S&P500 index climbed 1.7 percent to end the week at 3271.
The NZ dollar ended the week largely unchanged at 66.3 US cents, having briefly touched 67.15 US cents earlier in the week. Gold was the big mover for a second week, jumping US$67.51 for the week, up 3.55 percent to close at US$1971.20 per ounce, a new record high for the precious metal.
Domestic tourism expected to provide a lifeline for THL
Tourism operator THL is forecasting domestic tourism sales, which normally account for around 10 percent of its revenues, will increase by a factor of five in the next 6-9 months. In a market update on Friday, the company said its ‘get moving to get New Zealand moving’ campaign had achieved unprecedented brand exposure and ensured greater than normal utilisation of its camper van fleet during the June quarter, which would normally have been very low.
THL said the vehicle sales market had also held up reasonably well despite the economic slowdown. However, in a sign the company isn’t expecting the international visitor market to rebound to previous levels anytime soon, it announced plans to reduce its camper van fleet by around one third, with sale proceeds used to further reduce debt. During the June quarter, total debt had fallen by $64 million to $133 million. THL shares spiked higher following the announcement jumping 9.9 percent to close at $1.88.
Proposed legislation in Australia will force Facebook & Google to pay for media content
In a move that will be closely watched globally, the Australian government is planning to impose sweeping new rules that would require Facebook and Google to pay media organisations for the use of their news content. Regulators on Friday released draft legislation that would let news publishers in the country negotiate compensation with the two tech giants for sharing or displaying their stories.
It would allow certain media outlets to bargain either individually or collectively with Facebook and Google — and to enter arbitration if the parties are unable to reach an agreement within three months, according to the Australian Competition and Consumer Commission (ACCC). That process would involve an independent arbitrator looking at offers from both sides and settling the matter within 45 business days.
ACCC Chairman Rod Sims described the current situation as a “fundamental bargaining power imbalance between news media businesses and the major digital platforms, partly because news businesses have no option but to deal with the platforms, and have had little ability to negotiate over payment for their content or other issues.” The proposal will now undergo a public consultation phase before being confirmed before the end of the year.
Apple reaches new heights following blowout quarter
As well as decisively quashing any suggestion the economic slowdown would lead to falling sales revenues at Apple last quarter, the tech giant has achieved another milestone, becoming the world’s most valuable publicly traded company, surpassing the state oil giant Saudi Aramco at Friday’s market close.
Apple shares closed up more than 10 percent on Friday, giving it a market valuation of US$1.84 trillion. Saudi Aramco, which had been the most valuable publicly listed company since its market debut last year, now trails at $1.76 trillion. Apple’s strong third quarter earnings, boosted its stock, as investors rallied behind the company’s 11 percent year-over-year growth and plans for a 4-for-1 stock split. Apple shares are up more than 44 percent this year.
Real yields in the US plummet
Real yields on US Treasuries hit minus 1 percent on Friday, reflecting investors’ willingness to pay up for safe assets as a surge in coronavirus cases threatened the country’s tepid economic recovery. The real yields on 10-year Treasuries — which strip out expected consumer price-changes from nominal bond yields — slid as low as minus 1.005. Yields fall as bond prices rise. The drop took real yields to a level only touched during the early part of March’s market turmoil, when investors rushed for safe haven assets — and below where they were in 2012, when the Federal Reserve announced an open-ended bond-buying programme to suppress rates and stimulate economic growth.
The fall in real yields, derived using Treasury inflation-protected securities, reflects traders’ expectations the US central bank will not raise interest rates for the next few years, after GDP last week showed the US economy had suffered its biggest post-war contraction in the second quarter. A day earlier, the Fed held its key interest rate at zero saying the outlook for the US economy would be determined by the outcome of the coronavirus pandemic.
Youngest Murdoch resigns from News Corporation
James Murdoch, the youngest son of billionaire media mogul Rupert Murdoch who will turn 90 next year, is set to make a dramatic break from the family media empire. Announcing his resignation from the board of News Corp, he said he was exiting the company due to “disagreements over certain editorial content published” by its news outlets and “certain other strategic decisions.”
James Murdoch, whose older brother Lachlan serves as the CEO of Fox Corporation and co-chair of News Corp, had already departed the television side of the family business, partly due to his well-known opposition to the editorial views of Fox News. It’s understood the younger Murdoch repeatedly clashed with his father and brother’s conservative political views, occasionally even in public. He donated to Democratic presidential candidate Pete Buttigieg and, lately, Jo Biden, and fumed about News Corp’s policy of climate change denialism, particularly in the wake of the recent Australian bush fires.
The News Corp umbrella includes papers such as The Wall Street Journal and New York Post. It also includes the book publisher HarperCollins as well as multiple newspaper mastheads in the United Kingdom and Australia.