Newsletter – March 9 2018 

“Is this a point of worry inside the party, Scott?

The reason I ask you this is because it seems that every time you get that little bit of fresh air and the economy is travelling pretty well and the jobs are being created but it seems as though there’s a misstep from a Minister here and a misstep from a Minister there. You had Michaelia Cash last week again diverting attention to a separate issue.

It seems as though you and other Ministers don’t get the space to be able to tell the story that Australia is going ok.” (Listen here) 

Newsletter – March 9 2018

We have come to the end of the first major reporting season of 2018.

Over the past few weeks, I have brought you some of the major profits and losses of Australia’s top companies.

Now – for this reporting season, there was some surprises that were negative. But on the other side, there were many nice surprises.

Commsec are saying 54 per cent of all companies recorded increased earnings, allowing the stock market to pick right back up after what was a very shaky beginning to the first reporting season of 2018.

Now – as I was saying, it was very interesting to see the areas which reported outstanding profit – and my top pick would have to be travel. Think Flight Centre, Webjet, QANTAS, Virgin and even Rex Airlines.

Lets take a quick look at Flight Centre – absolutely outstanding. For the first six months of this financial year, its revenue jumped 5.4 per cent to $1.37 billion, while its net profit after tax rose 37.2 per cent to $102.2 million.

It’s now expecting an underlying profit before tax between $360 million to $385 million for the full year, up anywhere between $350 million to $380 million from last year.

Absolutely outstanding.

What about QANTAS – it delivered its second highest profit ever – up by $976 million before tax. An increase of 15%.

And Virgin Airlines – they delivered their best result in 10 years – Underlying profit before tax of was up 142% to $102.5 million.

The travel sector has clearly been the shining start this reporting season.

Another was the Resources Sector, they has another terrific interim results.

Rio and Fortescue the clear winners there.

But – on the other hand, not every company recorded a profit. Many had very significant losses.

Retail was the big loser here. Think Wesfarmers, Myer and Harvey Norman.

As I told you only a couple of weeks ago, Myer was issued its third profit warning in seven months. A soft Christmas and a flop in the January stocktake sales saw Myer’s profit fall 3.6 per cent, with net after-tax profit to come in between $37 million and $41 million – down as much as 42 per cent from last year.
They lost their CEO Richard Umbers over this.

And lets not forget Wesfarmers – parent of Coles, Bunnings, Kmart and Target.

They had a shocker. It has an 86.6 per cent plunge in its first-half net profit, after having to write down the value of its Target and Bunnings UK business.

Its bottom line profit was $212 million in the six months to December 2017 — a far cry from its previous first-half profit of $1.58 billion. Bunnings UK was purchased just over two years ago for $700million. It was written down by $900 million. Target lost $300 million and Coles lost the supermarket wars by falling 14 per cent.

Shocking result.

And Harvey Norman, that was the other real surprise this profit reporting season. It posted their biggest decline in more than 20 years.

Net profit for the six months ending December slumped 19.3 per cent to $207.7 million after Harvey Norman wrote down its 49.9 per cent stake in a dairy farm and cattle studs.

In Gerry Harvey’s own words …he probably “Shouldn’t have bought it”. (Listen here)

As I said, many surprises this results season, both good and bad.

I spoke to Martin Lakos from Macquarie Wealth Management at the end of the profit reporting season and he gave a very interesting insight into why possibly some companies did better than other – exposure to the overseas markets.

Think Boral, a2 Milk and BlueScope Steel.

But with this, comes the talk of the need for company tax cuts in this country.

We currently have the highest company tax rate in the world – and its severly impacting on businesses.
And its impacting on your wallet!

With company tax cuts comes more incentive to invest, to expand, to increase your wages. But right now, there is none of that right now. Company tax cuts are a necessary economic move this country needs.
We can’t be a competitive nation without it.

Now, just before I sign off for this week – there’s just one thing I want to leave you with.

If you’re thinking of investing in shares, you’ve done your research and you’ve looked at all the results

Just have a look at the forecast for the future. This is preparing the investors and the share market for what it the expected full year results.

It really is the key to any reporting season, and sadly sometimes overlooked.

9News – 

Just how will Australia be affected by Trump’s US Steel tariffs?  – Watch here

Money News – 

Former Boss of Myer, Bernie Brookes, have some blunt advice for the struggling department store – Listen Here

Highlight of the Week – 

This week I broadcast live from Mercedes Benz Parramatta and was joined by the CEO of Mercedes Benz Australia who had some things to say on the Luxury car tax  – Listen here 

Interviews and Stories for the week


The victims of WestConnex .

Is Australia’s economy in good shape? .

9News: WestConnex Battle .

9News: How will Trump’s Tariffs affect Australia? .

Should Adani go ahead? .

Self-managed super: Yes or no? .

Caltex breaches workplace laws .

9News: Home Ownership May Be A Dream .

Pizza business has phone cut off after refusing NBN service .

Interviewed  Greg Hunt, Health Minister titled ” Male and paying for pregnancy cover by his Private Health Insurance? You’ve got to be kidding… .”

Interviewed  Craig Laundy, Minister for Workplace and Deregulation, titled ” The dangers with Bill Shorten becoming PM .”

9News: China online retailer to send shock waves in Australia .

Interviewed  Geoff Raby, Former Australian Ambassador to China, titled ” Huge political changes in China to ‘increase risk’ of instability .”

Interviewed  Dr Rachel David, CEO, Private Healthcare Australia titled ” Why your health insurance premium is creeping up .”

Interviewed  Brad Banducci, CEO, Woolworths titled ” Who won the supermarket wars? .”

Interviewed  Hugh Marks, CEO, Nine Entertainment titled ” Is social media taking all the TV advertising? Apparently not .”

Interviewed  Mark Vassella, CEO, BlueScope Steel titled ” Rising energy prices threaten Aussie steel manufacturers .”

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