Sky TV talks up its broadband plan and hints at entering the mobile communications market, plus consumers are back to spending on their cards with a vengeance
‘Watch this space’ might be an appropriate mantra for Sky Network Television as the broadcaster continues to push its message of renewal and transformation. Speaking at the company’s AGM yesterday CEO Martin Stewart said he wanted to move the pay-TV operator from a mono-platform, mono-delivery play into a multi-platform, multi-delivery platform with joint satellite and streaming platforms.
Stewart says a key component of the plan will see Sky enter the retail broadband market with its own offering from early next year. The new service is currently being trialled by Sky staff and will be followed by a small-scale customer trial. Stewart said the company expects to compete on price, speed and customer service. He also said it was only a matter of time before the company entered the mobile market calling it a “big opportunity” for Sky.
Asked to comment about the company’s depressed share price Stewart said he was disappointed to see shares trading at current levels saying he believes the share price is “undervalued,” adding he had recently bought shares in the company himself.
Sky shares closed down 1.3 percent at 14.8 cents.
Retail card spending bounces back in September
Retail card spending rose in September compared with August as the Auckland region moved down alert levels, according to monthly data from Stats NZ.
In actual terms, electronic card spending totalled $5.7 billion in September, up $389 million (7.3 percent) from September 2019 but below the 10 percent forecast some economists had been expecting.
Retail spending rose in four of the six industries outlined, with higher sales of long-lasting goods such as furniture, hardware and appliances (durables) and supermarket grocery food and liquor (consumables).
Hospitality spending was up $113 million (13 percent) compared with August but was still $52 million (4.9 percent) lower than the same month last year.
Spending on fuel remained subdued, down $59 million (11 percent) compared with September last year.
Electronic card spending was $17 billion, an increase of $953 million (5.9 percent) on the same quarter last year.
Proposal to reform Fonterra Shareholders’ Council gaining support
Fonterra shareholders will next month vote on a controversial proposal to significantly reform the existing shareholders’ council, including plans to slash its operating budget.
Southland farmer Tony Paterson, the resolution’s sponsor, said his proposal would see the existing shareholders’ council stick to its constitutional functions, provide farmers with independent and expert financial analysis, and look for significant cost-savings by transferring some functions to the existing management team.
Fonterra shareholders have expressed growing dissatisfaction with the council in recent years, particularly over the co-op’s poor financial performance and significant write downs.
That sparked a review of the council which is due to be presented at the co-op’s annual meeting in Masterton next month.
Paterson’s resolution calls for the council’s budget to be cut by a third, pointing out that in the nearly two decades of its existence the council has cost shareholders close to $50 million to operate.
Paterson proposes the council’s budget be chopped to $2.27 million, reducing the number of committees and meetings, and using technology to cut travel costs, and having the $590,000 ‘connection’ spending fully funded by management through existing resources.
Shareholders are being asked to change the funding model to a milk price levy, voted on by farmers every year and starting at 0.0015 cents per kilogram of milk solids for the 2021 financial year.
Perhaps not surprisingly, the existing Fonterra Shareholders’ Council said it does not support the proposal.
Refining NZ shares fall to new low
Shares in Refining NZ fell to a new low of 59c yesterday, trading below their March low of 62c at the peak of the market sell off. The shares are now down more than 70 percent since October last year.
New spending data from Stats NZ yesterday showing retail spending on fuel remains subdued, down $59 million (11 percent) in September from a year ago, will only add to Refining NZ’s current predicament as it also deals with significantly reduced demand for aviation fuel due to the border closure.
The country’s only refinery, based at Marsden Point south of Whangarei, is planning to scale back its refining operations in favour of importing already refined product, a move that is expected to lead to further job losses at one of Northland’s largest employers.
Ebos share price hits a new all time high
Ebos Group said the company’s first-quarter trading result had exceeded expectations, with revenue up 6.5 percent and net profit up 15 percent.
Speaking at yesterday’s AGM, chief executive John Cullity said revenue from the company’s healthcare division rose 6.1 percent in the quarter, with pre-tax and depreciation earnings up 9.2 percent while the animal care division’s sales were up 14.1 percent – with ebitda up 18.7 percent.
While pointing out there was no certainty that growth would continue at current levels for the remainder of the year Cullity said the company remained well positioned to weather the current environment.
“We have confidence that our robust business model and appetite for growth will allow us to continue to take sensible commercial risks in line with our stated strategies and provide continued improved returns for shareholders.”.
Cullity said it was too early in the year to provide forward guidance given the unpredictable operating environment.
Ebos shares closed up 2.4 percent at $26.00, a new all-time high.
Germany’s Finance Minister calls for more collective action by European leaders
German Finance Minister Olaf Scholz says he is confident the economy can return to pre-crisis levels by 2022, but European leaders need to work together.
European solidarity has been put to the test during the coronavirus pandemic. Lockdowns imposed earlier in the year in a bid to stem the spread of the virus have taken a heavy toll on economic growth and business sentiment in Europe. The International Monetary Fund is due to publish updated economic forecasts this week, but in June said it expected the euro area economy to contract by 10.2 percent in 2020.
European leaders agreed an unprecedented budget, which will fund initiatives between 2021 and 2027, of 1.074 trillion euros (NZ$1.88 trillion) as well as an additional 750 billion euro (NZ$1.32 trillion) recovery fund in July, with that money to be raised by tapping financial markets, to help struggling member states with grants and loans. The deal was seen as a pivotal moment for the union and the first time it has agreed to mutualise debt after having previously rejected similar proposals in the aftermath of the 2008/09 GFC.
Scholz said the EU has an opportunity for closer fiscal union now, describing it as “Hamiltonian moment” for the region, referencing the deal struck in 1790 by the first US Treasury Secretary Alexander Hamilton to convert individual states’ debts into joint obligations of the federal union.
Disney’s new streaming service achieves three-year growth projection in less than 12 months
In what might be considered the dawn of a new age for one of the world’s most successful media entertainment companies, Disney has announced a major reorganisation of its media and entertainment business to “further accelerate” its streaming strategy.
Under the reorganisation, Disney will create a new Media and Entertainment Distribution group that will be in charge of monetising content via distribution and ad sales. The group will also oversee the operations of the company’s streaming services including Disney+, Hulu and ESPN+.
While the reorganisation is a major shift in its focus, it’s not necessarily a surprising one. Disney+ has quickly become the focal point and the saving grace of Disney’s business this year as the coronavirus pandemic has ravaged its bottom line in other divisions of the company.
The global health crisis has delayed Disney’s films, stalled productions and has shuttered parks and resorts for months, leading to massive layoffs.
However, Disney+ has thrived. The streaming service, which isn’t even a year old, now has more than 60 million subscribers. The company told investors last year that it projected Disney+ would have 60 million to 90 million global subscribers by 2024.