the call: Tuesday 16 June

Hi, I'm Juliette Sali. Stay with us after today's episode of the call for a bonus conversation with Australian vintage CEO Tom Dusseldorb. It's a company taking a fresh approach to the wine industry. That's coming up at the end of the show. Cheers. Good day and welcome to the call. Ten stocks picked by you two experts. One hour it is Tuesday, the 16th of June. I'm Andrew Gagan. Thanks for joining us on the show today. Also joining us. We have Philip Pay from Shore Partners and really Philip Pickman, Mike from FN Arena. Gentlemen, welcome to you both. You're seeing time and markets. I'm fact I think I say that every time. But obviously Rudy, we've had the deal out of the Middle East. Trump says it's been signed. A member in a moment standing has been signed. The actual deal we signed on Friday, supposedly. Anything could happen between now and then. Well, even then, is it really a deal? Well, this is the problem. We don't know the final detail. And also begs the question, what did this work actually achieve? Exactly. And what is coming into the deal? Because I believe we, we, best what we're saying is like we're going in negotiations again for another 60 days or so. So I guess the saga continues, but the market might, for the time being, maybe take a little bit of the positives from it. All right. You really don't. Well, so we're seeing that that war trade on wine. But are you willing to trade that or is it just too premature? Well, I don't trade. I do think that probably overall risk is probably diminishing a little bit. But particularly locally for the local market, I think there's plenty to pay attention to here. We are in the celebration mode. We will heal later from the from the RBA today, but they officially haven't given up on their hawkies stand yet, even though more and more financial experts are now economists and are predicting that we may well have seen the peak in the cycle with the RBA. But in particular for companies and for mining companies in particular as well, there's still cost inflation. So we have an August reporting season coming up. Yeah, do that so the learning fairly quickly. So Phil, how are you seeing it at the moment? Are you prepared to put the war behind you? Is it too early? Are you going to make adjustments? Look, I think you need to keep thinking longer term. The oil prices come back a bit. The futures curve has been predicting the oil price back to 70, 80 bucks a barrel anyhow. I agree with Rudy, what have we achieved? Probably not much. We've probably permanently added to the cost of living. You do need to start thinking beyond the next few months. And by that I mean beyond the November midterms, because whenever their resolution is made, I think it will be well before the November midterms. So Trump can campaign and say he won whatever war he claims to have won. So I do think you need to be thinking longer term. However, medium term, you do need to consider high cost to doing business. Some companies have faced it yet to come through. Really highlighted the upcoming orders of August result. We're going to see some of those for the June quarter. We might see some of that sticking around for the September quarter and be used to see what the RBA does for the remainder of this calendar year. So I don't think we're out of the woods cost inflation wise yet. But we should be thinking life beyond the war and what to buy now for what might be a stronger calendar, 2027. All right. I see how they feel optimistic nonetheless. Okay. Well, let's see, as presenting any opportunities on the stock tweeting across today, of course we do begin with our stock of the day. Normally a stock that is making news. So it is sincerely industrial reach. It is Australia's largest domestic pure play industrial reach. It's parents, since you're a capital group hauling it best today today. And since you're an industrial outlining a data center expansion strategy across multiple Australian sites, the re-planet development center, Clayton Thomas Town in Tuberber. It's ad status. Australia has competitive advantages for the build-up of data centers citing a lower cost builds compared to North Asia and a strong renewable energy pipeline. In fact, we'll be talking about one of those stocks that may well benefit from that a little later in the show. But let's focus then on Centuria industrial. Rudy, what are your thoughts? Obviously data center growth here. We know what's going on in that demand. How will it place this? Centuria. Well, I think there's a few conclusions that you're here. And I've been making that point now for a while. The whole AI story is broadening. It's it's it's most beyond the companies that we traditionally put in that basket. And it's now going to to more and more other companies outside of the circle of Goodman Group next to see in the likes. It's probably very telling. Centuria, of course, is not the only one, but it's it's it's probably the first one as a non-traditionally exposed AI read. They obviously now when you see it also with with contractors and engineering companies, they're also steering their business towards building out more data centers. I mean those numbers in the US, they are still going up and they are still projected to be higher next year than this year, which means that money has to go somewhere. Those data centers have to be built that that money goes into someone's coffers. And what we recently saw with with likes of a mega port. We now seeing with with Centuria, there's more and more people are looking at that mega trend and thinking like well if we can get some of that that improves our outlook. In the same respect, I think the market is very quick in jumping on that bandwagon. You see that the share price of a Centuria capital has moved quite a lot recently. Needless to say this is a longer term story. So those benefits are not going to be for tomorrow. So the market is maybe a little bit too quick, but that's what happens when you're led by narratives. And I think if you look at the market through the same glasses as I do, you see that from the moment AI pops up somewhere, the market is very quick and jumping on it. So a hold at best. A hold at best. Actually just pulling out from there when you're looking at rates, is that future improving, particularly the prospect perhaps of the end of the war, inflationary pressures that less likely central banks perhaps. Maybe a little more less Hawkes shall we say. Well, if I combine Philips commentary with earlier and your commentary now and you look one year out, I think it's time to start looking at rates. Yes. I'd be highly surprised if in 12 months time and you and I are sitting here hopefully fingers crossed and we're not talking about when will the next interest rate cut come from the RBA. Phil, maybe get your take on rates more generally, but obviously specifically Centurion, industrial. Yeah, look, I hate to do this, but I kind of agree with Rudy. We should be thinking Centurion, industrial in terms of rate and how it's currently, it's coins are currently challenged because it is operating in logistics segment, they've been hit by consumer demand, oil price likes, etc. That is impacting everything exposed to logistics. This two-share pass, we're already seeing the oil price decline the war when sometime this year, calendar 27 is looking more interesting, but we're not there yet. So in terms of what it currently does, it's 16 times PE 5.5% or about the dividend yield. It's actually not looking to be there, and I probably would have rushed to buy these pivot to data centers. They're kind of late to the party, but that doesn't mean they should enjoying the party. It kind of reminds me of a number of years ago where every company was jumping over themselves at.com to their name or to what they do, where Rudy.com, where Pippi.com joined the bubble that was building, and it kind of feels like maybe that's what they're doing with data centers. We're going to get more data centers, we're going to need more companies to host data centers. So the Australia isn't wrong, it's just late to the party, and it's in and already highly competitive sector. So there's others who have got maturely had started. So I don't know if I'd buy this one just because of the interesting data centers. They've got a pretty good base business that I can't agree with really. Next year we're probably talking rate cuts, that doesn't mean by the property trust now. I would actually call this a hold, with looking at actually buying in more, we'll probably get a no change from the RBA today. We'll see some mixed inflation data next two quarters because of the fuel exercise being removed and coming back on. But as soon as we start to see interest rates moving down, that is very good for each of us. This one's one net tangible asset of 425, it's trading at 436, so it's kind of a 10-fair value, it's not over-dial, it's not really undervalued, we call it a fair value based on its current NTA. We should go up with declining rates. I call it a halftime now with the alarm. can you actually buy me in buying more perhaps early next year? - Doublehold for our Stockler Day Centuria Industrial Reats. I think it's the first five that's chosen by you. We're gonna take a look at Stockland Suncourt McQuarry, APA Group and Juritech. So Stockler may stay in property. It is the first stock and we'll start asking out this diversified public development, owns developed managed shop, housing estates industrial, retirement villages. Residential settlements for FY27 could face lower sales on the back of rate hikes. That's certainly the view of Brokus when they're taking a look at Stockland. And you're throwing, of course, the recent changes with the federal budget and the tax implications for a holding property. Stockland, though, has been filling an earnings void with a sell-off of land essentially. Phil, how do you say it? - Yeah. I think it's looking pretty cheap. I think all the negatives you just mentioned are weighing on the share price compared to Centuria. It's on just under 12 times PE, offering a 6% dividend yield. Apologies, it's MTA is 425 trading at sort of first 436. So it's around about fair value. I think some of the tax changes in relation to new properties has been official for them. Obviously some of the CGT stuff is also negative. But my understanding is they're trying to go for, they're trying to grow in a capital-wide approach and understand they've joined up with, teamed up with more and stand-in leader to help co-fund some investments and their latest update in terms of their fur quarter update in terms of sales or residential home sales or positive anyway. So that's probably what's driven the blip sort of the negative sentiment towards property trust fears about what the budget might bring. We've then got the announcement, we're now coming out the other side. Again, similar to that one, the earlier one. I wouldn't buy it today, although it is looking cheap than Centuria. So I probably would buy stock one before I bought Centuria based on valuation. I just think let's get a couple of RBA rates out of the way. Let's see where Australian GDP sales were in point, it settles. And eventually, whatever happens with housing, we'll find a floor, we'll find a level and we'll start to grow from that level. Once people get through the sticky shock. So again, this is a known as looking a lot more interesting that's current price, which is around sort of four-lbs, 36 analysts think it's worth quite a sort of five bucks. So there's some upside if analysts are right. I'm not great at timing, but given wearing in June, I'm actually around for many companies. I would wait for the August results, see what kind of trading update they've prepared to give for the June quarter, for the first few weeks of FY27. But again, this is the one where I think a lot of negative news has been priced in. It's probably due to some positive news. So I would be looking to buy it, but just not right now. So I'll call this one a hold, just like the previous one. But it's looking more interesting. - Really? - Yeah. Different reasoning, but I'm sort of coming to the same conclusion. So I think it's a hold here. If you look from a risk perspective, there is exposure to retail spending here, household spending, there was exposure to interest rates, there was exposure to the building of new properties. And there's also some exposure, at least some intentions to get, again, access to data centers. So long term story, I think if you combine it all, it's a bit of the risks on one end, there is probably opportunity on the other end, but if you combine it all, it's a bit of a neutral, there is still a risk there. But then again, you do have quite a high dividend yield, and that obviously is why it's all of has an attraction for people. If you can stomach the volatility in the share price, you get more than 5%, and I'm not sure whether it's 100% but it would be close to 100% so there was an attraction there. And I would say it's a hold for that, because normally you would say you buy it with an eye on the future, but there is still a risk there. I mean, they can still disappoint on how many units they can build and sell and so on. So it's not without risk, but high dividend yield, it's a cool one more, it has a lot of things going for it. It's a neutral stance, I think, here's the best. - All right, maybe a bit of a weight and sea then, as far as stock owners concerned, so it is a double-hold. Well, it's now totally insurer, a sun-court, a victor asked about this, having a recently announced five-year aggregate re-insurance steel starting June 30, offering $800 million in yielding protection, 2.4 billion in total coverage over the period, hazard claims currently coming in below, broker forecasts at least Rudy, and well, in fact, we were just talking about the weather before we came on. How worn is at the moment, and the forecast for some looks pretty dire, so that raises the possibility of bushfires, that's where the insurers come in. - Yeah, always. And obviously the other problem also is that, when you get, when you do get changes in weather patterns, they are withdrawing from certain regions, where they're no longer insurable. - They're not accepting any admissions there anymore. I hardly ever can really get excited about insurance companies. I mean, admittedly, and the analyst is probably correct here, and that's why the share prices where it is, it has sort of de-risked the short term in terms of profit growth, that because of this big re-insurance deal, it does pay a reasonable dividend, and that's expected to make quite a little bit of a step-up jump into next year. Again, you get that dividend cushion, but otherwise outside of those elements I can't really get excited. So for me, it's a hold. - Okay, so no insurer would. - I'm not really excited to it. No, not really. No. And I think history is on my side. - Phil, what about you? Any excitement there? - Not at this price. I mean, insurer is a very secret call. This one I think the last time I was on it, was that the recent ones we call it the bid, and it's recovered. Now, looking forward, the earnings, the outlook they give it is pretty solid. They've got some attractive re-insurance. There's some attractive re-insurance because a global re-insurance rates have come down. That normally means pressure on the direct rise because they're getting cheaper re-insurance, so that gets passed on through competition. Couple of not-spanners in the works are normal as at the moment. With the high petrol price in the field is not getting petrol, car traffic's down. So people have been driving less, which means a number of accidents will be less. So they'll probably, that'll probably contribute a positive if you lead to their 30-gym results. Having said that, cost of doing everything is going up. So whatever claims they do have, actually cost them more to repair. I think net net that's a positive. So we've probably got a pretty good result coming up for 30-gym. Question then becomes how much more if at all can they keep putting prices up? And they'll press this morning from the regular saying, "We're watching you guys and girls because you can't just charge what you want. You need to explain price rises." And there's cost of living crunches. I don't know so much the consumer can bear and they'll all shop around if they'll trade down in terms of insurance. And people will switch if gas goes to electric vehicles and that may not impact the overall demand for insurance because potentially a few moving parts to repair in a crash potentially. So I think it's not expensive. Probably got an okay result coming up. So it's probably fair value. I'll call it a hold into the result. Take the good news if they deliver good news. We're in June, so they've announced something by now if they're going to miss consensus forecast. So I would own it into the result and then I probably wouldn't hang around for too long. Fair value insurance company that's cyclical, take Rudy's point about dry conditions. Web conditions can be just as bad for floods and stuff. You can get insurance in those regions. So I'll call it a hold for now. If you bought it at the bottom three months ago, I'd have my family on the cell trick are waiting for to see what the 30 June results look like in August and then I'll fly to take profits and buy one of Rudy's favorites. - Okay, have you guys been swapping nights out here prior to the show because you're in agreement thus far with the first three stocks that's going on? - We're messaging each other. - Yeah, let's get in. - Let's not allow you to stop it. - Hi Nadine here. Thanks for listening to the call. Did you know becoming an Osbus contributor gets your stock picks straight to the front of the queue and to the expert of your choice? It's our very small way of saying thanks for your support. The link to become a contributor is in the show notes or you can go to osbus.co/contributors. That's osbus.co/contributors. And while I've got you, we'd love it if you could leave us a review. And thanks for listening. - All right, let's see if it holds through for the next stock. It is but Quarry, one of the biggest and coolest I'm gonna ask you about this, the investment bank, financial services, presence in around 25 countries, also one of the world's largest infrastructure asset management Manage this week. of $495 billion in assets under management and it's clearly benefited from upgrade cycling to one of the recent global market segment there. That was the standout from, well, commodity volatility essentially that it's benefited from. Phil, how you see it? - Yeah, look, it's had a good run. It's had a very good run so much for the team going, this is the kind of market that McCroy should benefit from volatility and you'd expect their commodities trading this would be doing well. It'll go to share price all time by, I think it might look so bit. I can't recall that it by, 'cause it's had a good run. You've had a couple of dip. This is a great trading stock if you have the stomach for you. If you had a body in November, February, March, you would've done very well. I just gotta remember to sell. I always watch what the company does, what the management does, other buying shares, other selling shares. They've stopped their buyback. They're billion dollars to go. And they moved to a dividend reinvestment plan. So they've gone from buying back shares to issuing shares at a small discount. So the cynic amuse says they think their stocks have had a very expensive or the official view is they've got better opportunities to reinvest that capital rather than their own shares. And at a price, that is correct. So their time in the market, they've got better opportunities to deploy capital elsewhere rather than buying their own stock. So take that as a message, which is something that I do. I can't bring myself to call this stock a sell. I've always considered this stock a bottom draw stock. You buy it when everybody hates it, put the bottom draw and it'll have some volatility. It'll be higher in 20 years time as standard the last 20 years. I also can't bring myself to buy it at the current share price. If you own some trim your position, re-weight back to something more comfortable, I can't call it a sell that I can't call it a buy. So I call it a hold because it is a great business. At probably fair value, slightly expensive, but the moment they themselves are no longer buying their own stock, they're giving it back to shareholders. We're giving it to shareholders. So on the basis of valuation, I'll call this a hold. And if you've done very well, maybe trim some just to rebalance to a more appropriate risk return, but follow away. - God, really, I challenge you. Anything but a hold. - It's very difficult when I own it. - Yeah, okay. - The one thing I can. Well, Philip Solov suggested this. He does say people need to take profits, but in the same respect, he says it's a bottom drawer stock, which is basically, I was about to say, that's a staple in my portfolio. So I just have it. And every time it goes to a little bit of a doffer period, and it just had doffer period. He just has to trust that management finds a way and never would be able to make money. - Well, I mean, do you tighten up a chain of it to top up? - In hindsight, I haven't. But if I could wind back the clock, I should have. But even if you don't top up, you always benefit them because you're always in there in the first place. And I think this is one of those, and the history again shows me correct in this one. This is one of those stocks that if you buy them at not at the top, like here, but if you buy them and you hold them for a very long time, you're most likely coming on top. And I mean, I'm very happy as a shareholder. Never get too worried about them. And everyone goes to a doffer period and to a brighter period. And they obviously now also good for people to realize. Part of what they make profits from, of course, is from volatility in energy markets. So long may it continue. It's a firmhold. - So the train continues then, double-hauled for McQuarry. - All right. - Let's, that's a good deal. - Yeah, yeah. Come on. Let's turn to APA, great next up. Robyn, ask about this. Look, it tells us that we have that portfolio of gas, electricity, solar and wind assets with its energy infrastructure, asset management and energy investment. So there, look, now I was referring to this at the top there when we were talking about data centers, robust growth in them and concerns around the energy being used, so we see to power them. And destabilizing overall grid, I guess, could play into APA's hands there. With gas powered plants being used as a backup source, we've seen that in the US market. So Rudy, do you see a benefit here for APA? - Well, yeah, and that's where the showbyers is, where it is. Again, it's quite, it's just jumped quite quickly on the theme. But in general terms, I know that, and this actually practice shows you, the share price can be quite volatile, it can really swing around a lot. But I'm still thinking that most people would own this for the payouts annually. And that's still quite high. And for that reason, you can, and again, they tend not just to hold their payouts, but they tend to increase them over time. Even after such a strong one, I think, for the yield. If you own it, you just keep it in portfolio, hold it. And men, you should see higher payouts in years to come. - Yep. - Yep. - I think it's an expensive defensive. - I would take the opportunity itself. Rudy's right, so I'm a good, good venue. I've got it just under 6%. However, it's trading well above animals price targets. I also think it's expensive. So there's downside to the share price. If you believe they're forecast, and it's on a whopping 48 times P.E., if I've got that number correct. So nothing wrong with the business. I mean, it is, it's in revenues inflation links. So obviously, on inflation problems. So that's here for the foreseeable future. I just think we talked earlier about, do you do anything different? I mean, that chart says it all, right? So this can be a cyclical stock. I'm not a cyclical analyst, but you do need to have gone to that. At the moment, there are stocks that are challenged, and there are stocks that are in favor, because of all the defensiveness or they're positively linked to what's going on in the world. The world will change again this month, next month, certainly by 2027. So when a stocks price that near an all time high, or five, you're high, like this one is, if you've made good money, this is probably one I would rotate out of. Again, the world could change tomorrow, but if the war's ended and people put a risk back on trade, despite this one paying a good dividend, you would have maybe left behind capital gains point of view. And if you believe the analyst's target, it will actually decline in price, which case you could revisit. But again, I'll call this one an expensive defensive, and if you've owned it and traded it well, I will just sell out and buy it by something else. All right. Okay, well Phil's gone off script. He's not, doesn't ever hold. So it's a sell that he and I really would be holding it. All right, let's turn to the GTEC. It is a contract assessment, a TECS remediation refurbishment, particularly with infrastructure, think defense, transport, industrial, energy sectors, and recently winning a $290 million contract at HMA, assusturling it to a gardenologist, how the perth there. Phil, what do you think? Well, I actually covered this one, so I better call it a buy, because that's what I've got of it. We're talking earlier that we've seen today. A lot of companies mentioned the word data center, data center, data center. A couple years ago was electrification, electrification, electrification, battery storage, et cetera, et cetera. So there are definitely companies who are riding a very big theme. This is a company that's got multiple themes, multiple tailwinds, so it shouldn't get in the guts of one of them grows at a different rate. So as you mentioned, they're exposed to defense, they're exposed to energy, they're exposed to building and facades. So they've got exposure to Queensland Olympics, because Queensland needs to upgrade its bridges and roads to make sure they're safe enough for the millions of tourists who are going to come through in a few years' time. So this Queensland Olympics work they've got, they've got exposure to billions of dollars of defense, WA with their focus, which is just getting started. And energy, energy given what's happened in the world, my view is that we're going to hear them talk a lot more about energy. So the LNG pipelines need to be maintained, and they've shut down, and need to be repaired, well, that kind of stuff. And this is in their suite spot. There's even fuel storage that they can work on with joint venture partners. So people like to talk about this company's exposure to defense, and it is sizable, about half their team is a pipeline of defense. But the other half, which is also growing at energy facades, and other bits and pieces. So it is more of a, it doesn't do data centers, not specifically, but it is not a one sector, one such that if the music stops, they've got no growth. I like the engineering construction companies. I prefer it. I like quite a few. I cover quite a few. Those with a diversified, defendable, and customer base with multiple year revenue customers are the better ones. So they're not just winning one project, and that's one done in a year, but you've got to replace that and then grow. They've got numerous multiple year contracts and multiple year partnerships that they've been growing with their clients. So it's only on consensus, it's on 20 times PE. Some of the, well, call market dialings, Mono's, Genus, Posix, are on 24 times PE. So there's still four PE points they can add, just to catch up to the sector release in terms of valuation. And I think as we move into 27, 27 and they talk about how much growth they've got coming through. On my back of the envelope, they've got a total addressable market of 140 billion plus and their single-digit market share. That's plenty of years of runway for this company, trading their discount to some of its peers. I like the ins/espace. I think this is one of the better and cheaper ones. I would call it a buy. First by the day, Juritek. It's Rudy. I know that Philip likes this one. Few counterarguments. Yes, it's cheaper, but it's also smaller. For example, we've seen in some of the reporting season, including in February, that's why that dip is there. They had a little bit of a small hiccup and that temporarily put the share price on the pressure. That's what sometimes happens with smaller companies. They require less headwinds to make a little bit of an impact on the numbers. Having said so, the absence of data centers is remarkable so far because that sector is definitely moving into that direction. I mean, long story short, I think it's probably a hold here with the longer term focus because the share price is still relatively high. Let's hope in August that they don't have a hiccup because with these small companies it can go really quickly in reverse. I do believe that the relative cheapness or discount will have to be one of the pronouns of this. It's because also they are smaller in size. In some tough market circumstances that requires a little bit of discount. Let's sum up the first half of the show. Beginning with our stock of the day, we're centurial industrial REIT. It's parent company holding our investor day today. We're announcing just in terms of its further exposure there to data centers. It's a hold from both. Stockland's bad property play are also a double hold. Suncore. There are say a double hold and feels the same fair value. You're really also saying it's demurated in the short term at least. Yeah, but a double hold there, McQuarry. Guess what? Double hold. Well, Phil's saying it's had a very good run. He would actually trim at these levels. Rudy owns it. It's in his bottom drawer and that's where it's staying. APA group. It is a hold from Rudy. It does mention it's got a good yield there. Whereas Phil's saying looks has run. It's an expensive defensive as he calls it. He would sell it and juratec. It is a buy for a fill and a hold from Rudy. All right. Let's catch up with our own high conviction fund. Pits by the investment committee. So going into June, the committee left the level of cash, unchanged around 8% of the portfolio, two stocks out two stocks in. So Santos and Judah Capital were rejected and they added energy one and side-minded and you can find out the reasoning behind that decisions. If you head to osbiz.com.au, you'd look for that drop down menu of the investment committee. So if other fund is up 35% on a Kimberley term basis, since the beginning of March 2022. But keep the request coming in. For more than 50 years, he's been guarding Australians in making smarter investment decisions. And now you can catch him on osbiz. Join Peter Switzer for an exclusive series packed with essential local and global insights that matter to your money. We don't think the RBA will be lifting rates again from here. On market, it's actually a cheap way to play that whole pizza and shovels and get you like into the AI space. Are there people really bad in big on the banks? The answer is no. Watch live on osbiz, choose days 1pm or catch up on demand and subscribe to the Switzer newsletter free. Visit switzer.com.au CPG Telecom side-miner and appen. Let's begin in the media sector. We know the pressures felt there at the moment. We are going to take a little something cross and it's home of the listener, apps and so on. Also the hit and triple-end networks. Having recently merged with seven Western media. Look, softer advertising additions driven by obviously cost-elementing pressures, rate hikes and the like. Did downgraded, except by 20th guidance. Also announcing some 300 job cuts as well as some rationalisation there. Phil, let's start with you. So yesterday's hero. There are some sectors that are old school mature, decline in the old textbook terminology. The kids don't really use paper, they use paper subscription. If you watch live free, free, free TV and less sport and there are so many real TV's we can watch. I think father wants desert island to marry someone is the latest one. Saturation is by video and demand. It's been killing this industry for a long time. The news is now with 24 hours service long and need to come home and watch the 5 or 6 o'clock news. You're you know, you're you're peppered with it throughout the day. There's a sharp attack you hear about originally. Immediately you don't wait for it into the day. What's keeping this industry alive is sport in my opinion, anti-slivening given that you need, you know, while certainly rugby league games, AFL games, soccer games, world cups on the moment. That's on SPS. While while in Australia anyway, those are free to wear, they will lift to fight for a little while longer and it uses me when a 90 minute soccer game has a hydration break at halfway through each half in a 16 degree day. You know, it's yeah, we're doing everything we can to get more grip and use for these companies. It is a declining industry. If I don't know the word ago that way, but you think eventually the paper view can be as we get their way and get the rights to sport completely. And if they're ever removed from free to wear, then the traditional ministries are basically gone. And I think newspapers will die as slow death as their population actually ceases to exist and because you know, people aren't reading our copy of newspapers anymore and even radio is streaming. You saw what happened with a competing radio station with two high profile presenters explode and we blow them in the radio in this drop away. So this is very much an old school decline, except you industry that people should avoid. It's not even particularly cheap if you believe analyst walk us. So it's hard to say much positive about it given that it's sort of yesterday's hero. Seems to pay a reasonable dividend yield, maybe 7% of that sustainable. It's not on the IPE, but it's just no need to be in this sector. It's really funny and by an AI stock. Media who wants to be there filled goodness. I think I'm going to pack up, go home and not come back. Now this isn't traditional media. This is live news. Right. Rudy, okay, not many positives to speak of as far as films concern, anything you're seeing there. Yeah, my heart is bleeding being a journalist. But yeah, no, I agree with the general sentiment. Would you own the manufacturer of Hula Hoops 30 years ago? Would you invest in a video rental service in the 90s? Probably the answer is no. I think the only, I think the attraction of Southern course media previously for a very long time had been that they're actually trading on a very high yield. And then it's always the question like how sustainable is that yield? And I'm not 100% certain, but I actually think they scrapped their dividend, I think. Well, at least they must have flagged that they have no one going to guarantee it. I'm absolutely not interested in this type of media on the stock exchange. The only one I think that is worth considering is newscorp. And why is that? I actually have a few assets amongst all the Dow Jones franchise, which is doing really, really well. And you can make an argument on that basis, that share prices on the value. So that conglomerate is less dependent on that traditional model that these guys are. But essentially, they're trying to merge themselves and gain some extra time in existence. But unless and until they find a new model that exceeds the old one, I've absolutely, I've no interest whatsoever. I mean, some people out there think that everything has a price. I'm not one of them. In some cases, I'm just not going there. And I'm clearly not interested. Yeah, you wouldn't even sell it. I would never be there. Just a good sell it. Yes. Okay. All right. So, that's the view on Sunday cross media. Right now, let's turn to play side studios. It is the next stock. And that's such as about Roger, developed video games and platforms, mobile PC consoles, virtual realities. mixed reality with a portfolio. It has about 60 titles to its name. Now more recently though, Meta has terminated its Horizon Worlds development contracts with the company. That was about a $4 million revenue hit as a result into FY27 and has begun a consultation process leading to redundancies given that hit from Meta Rudy. That's a big negative. Which are now that? That is the negative that is causing the sharepice where it is. This is quite funny because we had been writing about this company and in the run-up to their new title, everything was looking hunkidory. Everything was looking like they were on a winner. That's what you see in the sharepice there. It was all looking good. The indications were all there and then Meta comes out and baskeys squashes the sharepice. The same problem I have today as I have a way back then is the daily volume in the shares can be exceptionally low. So for people who invest with a little bit of money under the belt, I have no idea how you would get in and then save to get out again. So for me, that's a big problem. The other problem of course is that it's going to take a while before this one writes itself. I think from memory, this might be an all-time low where it is now. And that's again, I sometimes express my skepticism about those small cap companies. But you see one thing that happens and it completely obliterates all the good stuff that had been happening previously. I think it's worth a punt given where the sharepice is and that effect from Meta of course at some point will transfer out and you will get the positives from the new titles hopefully following through. But having said so, given the volumes, given the risk profile, more than a punt, I wouldn't allocate here. So you definitely don't make it. If you have a go here, be patient and don't put too much money in it. You don't want to set yourself up to fail. What, so call it a buy, but not for you. It's a it's a it's a punt. It's worth a punt, a spiky buy. And also because where the sharepice is, yes. All right. But be careful that you're not the only one who is responsible for 80% of the volume. Yeah, anyone on the market. Yeah, okay. Feel what do you think? I think that's a great. I'll call it a buy. Look, Sure covers the stock. That's not me. It's my colleague, but I'll back you've been called a guy. The stock does remind me of a lesson. I certainly keep learning. And that's when a founder managing director leaves, you sell the stock. You forget about how cheap it is and you come back later on. So the problems were one of the better phrase arose when the founder left a few years ago. A new person came in, knew the stock well, has had some challenges and has Rudy mentioned. Nobody likes to custom the leaving, particularly when it's a meta or someone lies to people who've heard about so it's taken it here. But it's now back to what I would call it, it's it's core beliefs and that's designing, creating games. As Rudy said, it had a pretty good one recently with mouse started late, but it's sort of hit the ground running with eyeballs and downloads. It was really successful. And before that, it had, it had dumblaced to die and it's still got a couple of, a couple of games to come out. One linked to the series Game of Thrones and something called Jew, I'm not a gamer, but there's some beat names that they had the same success that mouse had started showing and that was being reflected in the share price, then the share price can recover. So there is not much it all factored into the current share price. It probably is at all time low. But they've got a good core business. They can't lose clients that where they are, the client where they're developing the product directly. So you kind of think this is an attractive entry point, if you weren't already there. So I'll call the buy on the basis of its cheap and hopefully the next two to three years looks a lot better than the previous two years. Rudy's having a charcoal, but don't put too much money by one share, Rudy, it's still a buy. All right, well we've got a double buy, there you go. For playside studio. Okay, let's move on to something potentially with all this exciting. It is TPG telecom. The latest update was well, certainly the analyst sort of somewhat soft, although it did maintain it's FY26 guidance. All right, Phil, how do you say it? It's a tough one because again, it's been around for quite a while. It shouldn't come with too many surprises. It looks a little cheap if you believe analyst forecasts, but I've said, I'm going to have this great one. I've got it on almost 40 times Pee. I don't know if that's correct, correct, if I'm wrong, Rudy, but I don't think it's as cheap as analysts are suggesting and it is exposed to the consumer and you know, it's all good. So you've got Telshreddy, you've got others that are finding a good fight. Mobile, NBN is getting more competitive. You've got satellite down coming to the mix. It's delivering very low single digit growth both in revenue and EBITDA. I believe you've had a major insider selling putting downward pressure on the share price. That's another red flag. Insiders getting out, volume clearing is a cheap enough. I'm not a charters, but charters tell me, never buy something at an all-time low. I just think given the consumer, the pressure that consumer is already facing, the competition that already exists in this sector, it's not time to buy this stock. So if I had it, I would sell it and then bring it in six to 12 months time. So it's a self for me. Yeah, it's a bit of a boring television if you're looking for big disagreements here today, but I have a slightly different view, but I keep on coming to the same question. The same result. Listen, the telecommunication industry locally has some really great opportunities. Aussie broadband, doing really, really well, super loop doing really, really well. Those are essentially exciting business models that are doing well. I don't know if Phil was referring to Saul Pattinson, but they are selling down their stake. When they leave and they've been one of the long-term shareholders, you have to question whether you go in, yes. And I think TPG hasn't been exciting as a company for many, many years now. And it's sort of in nowhere's land where you go, yes, you get a dividend, yes, it's relatively cheap, but it's very hard to get excited. Well, on that chart does tell us sorry, I think any analyst does. Nobody is getting excited. People are taking guidance, I think, from Saul Pattinson reducing its stake. Double-cell then for TBT Telecom. Nice stock is a sight-mind. The Joe Musk about this is that software platform with, what, serving hotels, particularly the small end of the market there, in terms of hotel management. And more recently, partnering with the cloud-based property management system, Muse. We'd tell you the analyst saw as a positive, really? What do you think? As a relatively small car, not profitable and hasn't been listed that long either. It has been hit exceptionally hard by what we all call it, the SaaS book ellipse or whatever you want to call it. And you can see that. I personally thought it looked cheap and was at $6. It actually ran half that at some point. It was actually below the $3. It's not that the company is not doing the right things. There recently the little jump-up and the share price level. It's little in the child, it's actually a big jump. That is because of them working towards more partnerships and the likes. Well, this company needs is two things. It needs to become profitable, at least confirm that it will be profitable next year. That's the forecast by analysts. If it can feed into that enthusiasm, because usually that translates into positive response in the share price. The other thing this one needs is it needs a general pickup of your average AI threatened software company. So it needs a global pickup in that sector, which is also ways on share prices of Y-stack zero, but more heavily on this one because it's smaller and it is not profitable. So if you take all that into account, that at some stage will happen, that the market gets more comfortable by the fact that they are not being destroyed by AI, and they will become profitable next year. Then this is worth a part. You're willing to take that part? I'm willing to take that part. I'm not owning that at the moment, but there's no, I'm not saying I can't only that at the moment. No, we're calling it a buy then. I'm in the buy. Yeah. Didn't just say buy. You did. I think it's a hold at this. It's exposed to a lot of tail headwinds, the SaaS poplips, AI competition, travel, it's travel exposed. So it is very well owned by fund managers, very well owned so my concern is if fund managers lose money. mainly because I've been in tech, and Mrs. got some ongoing selling pressure that independent of its earnings, as I really mentioned, is still lost making, hasn't been around for that long, but very, very long enough that we're still waiting for it to turn popular. It seems to be well-liked, I don't dislike it, but it can be too early to go into a new piece of tech. I think their earnings will recover. I do think the travel sector will be stronger in 2027 than it will today. What I play through Sightminder, no, I like to break some more travel agents. I like the LLLs, I like the flight centers. They actually, they're closer to the actual customer base than a Sightminder would be. There's a lot of third-party service provider, so I almost want to call myself. Arnie, 'cause we're really set by, I'll pull it a hold, just hanging onto it, so I hope it recovers in 2027. I don't think it looks cheap if you believe animals price tag is, but I'm just not convinced. No, not so secret to sell it, but not so convinced that I call to call to buy. So it's a hard or watching brief. If you aren't, you know, as well write it out, 'cause 2027 should be better for it, but it might get worse before it gets better. You don't have to be kind to Rudy, and I'm not that kind of discourse. No, I can be just going through myself. Anyway, something to throw in here as well, is that we're now about two weeks away from June 30th. This is usually a time when a lot of investors look at their portfolios, and they'll kick them out. This might become a victim, given the champagne was so much higher. So it could be a good point to keep this on your radar and maybe come back in July. All right, I'm taking another opportunity. I'll pick them up on the cheaper price level. All right, another reason I'd like you back, Pettlin. I can't buy you can buy here. Let's run it out. Buy more on July. With a look at Apple Gary asked me, this is the software developer, DataFord machine learning AI products essentially. However, once again, AI at play here allowing the cost of software development. Well, it doesn't essentially make it free yet, but has pretty much, well, it's almost threatening to eliminate that need for third party vendors, but all right. I think we've spoken about this before, and the pressure it's been facing, of course, Phil. Yeah, it didn't happen. As I used to say, we covered this stock in a previous life. This is gonna be, this has been what I call a gunner stock for a long period of time. We put up a longer term chart. It was gonna do a lot. This should be a sweet spot for him. Given as I understand it, they supply the inputs to all these large language models. They filter it and collated and let's, I'm misread what they do. This should be their sweet spot for them, but is there, is there token? Is what they do still need? It has the world moved on. You look at what their customers are doing. Spoken really about meta leading play. So I Google terminated a contract with him in March 2024. So if a large user of, potentially large user of their service that says, hey, we can get better or cheaper elsewhere, you can't ignore that. And that's a pretty, you know, again, back in 2020, everybody loved it. It's kind of done nothing with some volatility since 2023. And to be frank, I expect more of that to come. So this should be the environment where they're thriving. And it doesn't look like they are. And you just don't need to get in front of this. There's other ways to play AI. Then perhaps an older technology AI that this stock might be, AI play. If that's not being too harsh. So I would just cut my losses on this one and sell. And buy a data set in company. Buy bricks and bricks and mortar data. Santa picks and shovels data, Santa play it rather than, you know, an older technology AI play, which hasn't really delivered in the past five years. We've got enough data to know that, you know, what it can deliver. No need to guess. Just, you know, cut your losses and move on to something else. No, goodness. If you held this long, that would be regret. Given where it's come from. But that was a long time ago. A wise man once said, "The stock can fall 80% and then halves." And then it's full and 90%. What was his name? Yes. "City just to my right." Yeah. Exactly. I mean, my first response would be like, why? Why up it? I owned it one stage. And our mumboid was about $40. Imagine that one, $40. And now it's after a rally lingering around that $1 stock. I mean, it's a trading stock. I have no idea why people are trading in and out of it. If I look at consensus forecasts, as far as the eye can see, people are predicting losses, ongoing losses. It's a has been company. Taking a leaf out of Phillips commentary today. Any charters will tell you, you don't buy the old-time logo. Well, it's not the old-time logo, but it's not that far off either. Why? I'm just asking why. All right, that's pretty definitive. Double-cell then for Apple. Let's set on the second half of the show, beginning with Southern Cross Media. You know, that's certainly a negative given what's going on on the media sector, of course, particularly with the legacy players. So it's still from Phil Grigiuest out. Maybe just avoid it, essentially, except he does like news call. Play site studio, very good for the story. It has come off significantly because it lost that meta contract. But so it's had that little hour with both saying it, as a buy, more of a specie buy for Rudy. TBG Telecom, bit boring. And really don't see why you should be there, say, both of them. It's a cell, Rudy though, seeing that Aussie Broadband superloop, they're the places to be. SiteMinder, it is a buy from Rudy, although, look, obviously not profitable. You do have that AI threat, whereas Phil would hold it, so does recognize those. So those headwinds, he more likely play that space with the travel stocks. And finally, that happened. It is a double cell. That is the show. Thank you to our guest Phil. Thanks for joining us from Shores. Where's he going? Thank you. I'm in voice. We know you there. Oh, yeah. Yep. There you are. [LAUGHS] All right, thanks for joining us. And Rudy, thanks for joining us from FN Arena. Well, at least we passed one on to the committee. That is true. Give them some work to do. All right, that is the show. Thanks to you for watching. [MUSIC PLAYING] And before we go, a bonus conversation for our The Call listeners. We know many of you are always looking for your next investment idea. So we're bringing you a deeper discussion with the leaders behind some of the ASX's emerging companies today. We're joined by Australian Vintage CEO Tom Düsseldorf. Great to have you with us Tom. Great to see. So you've just secured refinancing through 2028. Tell us about this and how important it is to your success story. Yeah, I think-- I've been in the role now one year. When I took over a CEO, we had kind of a year run on our financing with our partner. That whole strategy or that support was not necessarily aligned with the new direction. You know, we announced a turnaround. We were focusing on our inventory innovation. But we needed to bring our finance partners along for the journey. So for the last six months, we've been working collaboratively around what those next one to three plans look like, what kind of funding do we need? How do we secure it? How do we align all the governance and all of the checks in line with that strategy? And so now that we've announced that we've secured it and we've secured it for two years with a one year option, we now have finance aligned totally with our strategic direction as a business. So it's a really big positive reinforcement-- reinforcement. Investors have heard turnaround stories before how confident that can they be in this one. Yeah, I mean, it was all about the numbers. You know, the half result that we announced showed us in decline and we'd never spent more cash. And we said in the full year, we'd be in growth. And we would save more cash than we've ever saved. So that was always my measure. At the half was to say, don't judge us on the first. Judges on the full year. And the pleasing thing is without refinance, we gave guidance for the full year to say, we are growing. So we're looking around 4% to 5% growth in the second half. So minus 1.7% to a 4% to 5% swing shows the directionality of the growth of the business, which is a big tick. So we are growing. And the cash turnaround has been massive. So we have saved roughly 20 to 25 million in cash in the second half, but it's the same time last year. So we're on track to hit our free cash flow target for the full year of this financial year, which was a massive check that the investors wanted to see that we could control our costs and our spending and at the same time drive revenue for the business. So those two metrics will be guided that we would achieve in the full financial year. And how quickly do you expect that business to move from stabilization to that cash flow? No, I mean, that's the next step. So the first year was always free cash flow. So targeting neutral cash on an underlying basis, if we could show that we could do that, we are doing better than we've ever done since 2021 in COVID. So it's quite a big turner. It's probably a $35 million cash swing, which is facts. These are in our results. And so people were looking for that tangible demonstration that we were able to do it. And I actually think there's quite a lot more to come. I've been very active in the business, understanding every lever from how we order our packaging, which seems very basic all the way through [BLANK_AUDIO] to optimizing our grape supply, how we utilize our wine. So I now am clear on every lever within the business. And I think we've just at the beginning of how we can optimize that cash utilization and protection going forward. - It's interesting you touched on COVID 'cause this week we saw consumer confidence at its lowest level since records go back 50 years. We know millennials, Gen Z aren't drinking as much. As they use to people, have less cash interest rates, arising, petrol prices arising. How does all of that and that gloominess hurt your business and how do you turn that around? - Yeah, I mean, it's if everyone in senior leadership in consumer goods are not talking about all those things, you have a major problem. And so that's a big part of our kind of strategic plan is how do we address what is looking like a downward trend on our category or our sector as an alcohol industry. But then within all those macrochanges, always substories. Like yes, people are drinking less overall, but they're not not drinking. So occasions are changing. The way that people are connecting over alcohol is more important than ever. So sociability, portability. So what you're seeing is people are making decisions about how they consume alcohol much more differently now than they did. So traditional forms of service, so standard 750 mil bottles of wine have their place. At home with a meal is still a very big part of the wine industry. But it's declining. People aren't opening that bottle Monday to Thursday because they'll either finish it and not really love it or they won't and they won't love that either. So wine has really got to start to evolve and learn from other categories that are growing. So RTD, small format, flavored cans, where you can buy one to four or six or case, what's up to you? Are doing really, really well. RTD globally offers smaller bases continuing to grow. Beer's pretty flat, but still showing good boy and seen some emerging markets, 'cause it's more social, it's more casual. So wine is a sector that we're in. We need to learn from all of these cues that are happening beyond our industry and adapt. And there is growth to be had. And I think the thing people forget is that wine out of all of the categories within liquor have emotional connection to people. I constantly reinforce its connection with food is unbreakable. Wine and food is a love that will last forever. And we all want to eat. We all want great meals. We've just got to be turning up in ways that people are looking for now more than ever. And I think that's been the big change in our business. And part of that adaption has been these smaller bottles. So POCO Vino, somewhat the star of the turnaround story, how much of your successful future growth that Australian vintage require, I guess depends on this brand. Massively. Yeah. I mean, I joke, I've sat with every major customer in the world and I said, I bet my career on this. Like I literally bet my career on it. I said, with absolute conviction that format is one of the big souls for wine. Everything I articulated about why we do or don't open bottles of wine often are influenced by the size and the volumetric nature of that drink. We don't want to go a bottle of champagne. It's just a lot of champagne. And I think where smalls have lost their way in wine is that wine makers perceive it to be a lesser quality vessel. So it will make the wine not as good, which isn't true, because technology and filling technologies, the way you get air out of bottles is so much more sophisticated than it ever was. And so what I looked at was said, okay, this is the opportunity, but it had to be executed in a way that solve problems for everyone. If you're going to solve or fulfill a need, you may as well solve all aspects of those challenges. And that's why POCO is so unique. It's skinny and flat. It merchandises on its side. It's helpful for retailers. It's aesthetically premium for consumers. It's portable for people that want to go. We've got a broad range. And the price point is not crazy. We're not asking people to pay two, three times what they would for a bottle of wine. It's slightly more expensive as you would expect. Smaller things tend to be because you lose the efficiencies of kind of scale, but it looks great. And I think what we're finding is that people don't want to compromise on the quality of the thing that they consume. Just give it to me in the way I want it. And so far, it's exceeded all of our expectations. And so how important to answer your question? It is absolutely critical. The question is not, will it be big? The question is how big will it be and how quickly? And that's my focus. So you don't think it's a niche market. You think this is the future of consumption? It's the future. I mean, the UK and the great thing about our business, people think we're just an Aussie wine business. We do over 120 million revenue in the UK. We're at the forefront of some of the most advance and exciting consumer markets in the world. So we get trends coming in from all over the world. And so what we see is that that trend is being far more accelerated in the UK. So they have dedicated smalls base. Australia's just getting up to speed with that. They're starting to get destinations. If you see on checkout now and all your favorite spirits are being sold in little bottles, they always were sold in little bottles. But we kind of looked at them like a gift or something we wouldn't engage with. Now they're becoming more and more the volumetric consumption of spirits. Because people don't want to buy a 700 mil bottle. So these trends are happening in front of us. And I think wine was just very slow at looking at what they could learn and change. Because it is very traditional. A wine maker says a burgundy needs to be in a burgundy bottle. And no one questioned it. Yeah. Well, you know, myself and my colleague Nadine Blaney like to say that we're journalists that do the hard yards that we do our research. We tasted some of the poke of inner thanks to Australian vintage in yourself. But also we went looking for it. So Nadine lives on the Northern Beach. She said that she found it in her local liquor store. And it's quite popular. She asked the retailer. I have to say in mine, I couldn't find it. But that was because the small bottles were hidden. So if that's happening, consumers can't see that. How much of that is a hindrance to people not buying things that they can't see? It's massive. I think the challenge we have now is not a question of more exposure. It's about working with retailers to build destinations that service consumer shopping needs. This is what grocery does incredibly well. Licka in Australia has its own retail footprint. You go into liquor stores to buy liquor. In the UK, you must go into grocery stores to buy liquor in the vast majority of cases. We don't have that in Australia. And so what that means is liquor stores have huge choice. There's a lot of selection. It's quite overwhelming. And you can get lost in that space, even with something as disruptive as Pocovino. And so we're working with our partners. We're working with our retail partners who fully believe in this trend and this movement to create destinations, to sign posts for people. Here's where you can buy one or two. You can get a light or a red together. You don't have to go variety around the store. All of these things are inherent barriers to wine consumption. When you see an aisle of just wine bottles that all of the same except for their labels and price points and maybe other originality, you don't know what to buy. You're guessing. Or you go to things that you're comfortable with. And I think we've kind of really cracked that now in terms of simplifying the choice. But the job we've got to do also is to not just expand the range, but make it easier to shop and easier to find. But what I say is we're selling more than we've ever sold that we thought we would now and people still can't find it. And people still don't know what it is. We haven't advertised yet. We haven't done any above the line. We needed to build a critical massive distribution. And then we're going to invest behind this brand and make it mean something to people there. So maybe in a year, everyone knows what Pocovino is. What about some of your other disruptors, LEMSECO and the light? LEMSECO continues to perform. Like there's two stories. Pocovino, we drove distribution. We agreed with PART as I went everywhere. LEMSECO has just been growing organically. It's a good product because it's been made with just fresh lemon, concentrate, and Prosecco. So it's a very simple natural combination that just gives a kind of authenticity. And so we've now expanded across all of the Australian retail landscape. We're also now shipping into the US. So we're in 13 states in the US now with LEMSECO at $12 USD on shelf. And believe it or not, it is more economical for us to make it here, ship it there. And so then it is to make it there, and ship it out from domestic production. So even with all this tariff talk and all of these macroeconomic issues, it is still quite compelling in terms of shipping into the US if you can get a really good kind of trade going. So LEMSECO is looking really positive there. We've shipped our first 10 containers into China. So that's going through Shanghai and Tier 1 cities. And so we're pretty optimistic about what that can do, but Poco is still going to be by far and away our biggest bet. - Yeah. Going back to the fact that people are drinking less and some people aren't drinking at all. Do you think the biggest challenge to your business is potentially not another one company and other listed one company, but maybe the wellness culture? - Yeah, I mean, look, we're all aspiring to be healthier. That is a fact, but that's been a trend going for a very long time. I mean, I worked in food for a number of years and the health oil has now become just the store. You think about the growth of gluten free, of fat free, sugar free. That's been moving through food. And then as it gets into liquor, what we're seeing is yes, people are drinking less in total volume, but they're still drinking. And so even on premise out and about sociability, these occasions are growing at home with a family member partner over dinner. That's where the decline is predominantly taking place. People are choosing to opt out of drinking in those occasions. So there's still plenty of opportunity. And just take one, the decline is actually being driven by Shiraz and Cabanet. So heavy reds, they're the one shrinking. Prosecco, Pinagrizio, Rosé, sparkling, pin and wire, all in growth. So at some point, wine actually on total is in growth again in Australia and the UK on the latest data by 1.2%, which is meaningful. But what we'll see is we'll actually see a faster growth once the shift between red and white kind of completes. They just haven't been big enough to overcome the sheer volume of red wine that Boomer's drank for so many. Love the Boomer's. Look, the beer companies have done a really good job with zero alcohol. There's some really good zero free spirits as well. Why has the wine industry lagged? Are you working on anything like that? Yeah, it's a big part of our mix actually. I mean, you probably would know where the number one still zero alcohol wine in the UK. We do half a million cases. Like it's a big part of our business. High margin, it's a good product. But when I say a good product, you know, I judge zero alcohol and it's proximity to the real thing. If you're pretending to be something you aren't, yeah, you've got to get really close to that thing. Otherwise, it doesn't quite work. In beer, it's in the 80 to 90%. When you have a zero out beer, you can kind of convince yourself you're in that occasion with wine. It's still sub 50. You know, it doesn't have the same palette. It's a bit sweet. You know, it just doesn't deliver as in the way that you know, beers manage to really tap into that that opportunity. So I think it's still going to be a meaningful part of the category, but not not a massive solution. You know, the things that are exciting, the wine industry are lighter wine. So mid strength, you know, lower ABVs are starting to get a bit of traction, but still relatively small. My view is, if you want to have a glass of wine, let's give people one glass of wine, which is why Pocovino works. Don't cut out wine completely. Don't drink the whole bottle. Just have one. And what we're seeing is that's bringing people back into wine because they're happy to have one glass and no stress of having to finish the rest of it. So that's where we're going to see, I think the most movement, you'll start to see brands move small as we continue to try and invite people back to that midweek. Everything in moderation, as our mothers always say, including moderation. If you were launching Australian vintage from scratch today, what would you do differently Tom? It's a really good question. I mean, I look back on the legacy of this business and I kind of thank, you know, the heavens that they did invest so heavily in infrastructure. You know, people say, oh, to have big factories is a bit of a noose sorry, a bit of a challenge, but actually what it gives us is an incredible capacity to service huge volume potential. So Pocco, for example, you know, we're now pushing, we're pushing nearly 10 million units like our company, no other company could do that unless they were the size of us. Does that make sense? You know, it would take them years of capital installations and, you know, investment to get there. So I kind of look back and I could criticize the how big the company went, you know, chasing that massive volume, but without it, we kind of couldn't be where we are. But if I had a clean slate, I think what I probably would have done is I would say my relationship with growers was a lot more pragmatic. It wasn't like 10 year agreements that kind of ignored how consumer trends can change in any other consumer goods industry. I think that's been a big learning for the industries that everyone went are maybe a 10 year deals, maybe a little bit long in the volatile nature of the world that we live in. The good thing is we've got to handle on it now. You know, our wine supply is now in what we're calling a structural deficit. We're bringing in less than we need, which is a good thing, not a bad thing because it allows us to get into what I call the spot wine market. So where it's finished and it's in tanks, we can draw on those at any point in time, freeze up cash and working capital. So I think that part of the industry has been, I think, the biggest wake up call to every major wine company. And would be the thing I would have focused on if I could do it. So you don't think Australia is producing too much wine now. I mean, there was a glut for so long. We definitely are. I think I've heard numbers of nearly two billion litres of excess supply mainly in red wine. That's going to change over the next two years. You know, it sounds like a big number and it is, but we have capacity to hold nearly 200 million litres. So it gives you the context that there's lots of tanks and lots of space for this to be moved through the industry. We're seeing wine being pulled out. We're seeing growers make tough decisions to rip up vines. That's a five to seven year investment. If you install vines, you don't see a product for five years that you can viably kind of utilise off that land. So to pull that out is a big commitment to go right, I don't know longer in this industry. So that is happening. You know, that's the sad part of a structural oversupply when consumers move away. It's predominantly in charaz and reds, places like Barossa Valley. You're reading in the press around Bordeaux. I mean, there's not anything they can do about it. The flip side is burgundy's never been more expensive because pinnacle is absolutely invoked. So there's still opportunity. It's now about looking to the future and saying, okay, where do we need to secure long term supply of things we know are trending in the right way and will for a while? Prosecco and Pinagregeaux are going nowhere. Saved Long and Shardinay go through this constant kind of up and down over the decades. Pin and Y is not going anywhere. There's a deaf and a shortage. So how we're doing those deals now are going to be critical to the long term. But I've been phenomenally beneficial from a cash flow perspective in the short term. So that's what we've been really focused in on. Whether or not you like someone your long or Shardinay is such a contentious issue as well or mugged friends can't it be? What export markets excite you? Do you know that's actually one of the bigger opportunities for our business. You know, AVL never really went outside of ANZ and UK and Ireland. That's been the court that does 90% of our of our dollars and our volume. So when I go around Asia and I talked to them about trends in spritz, I show them small formats and disruptive shelf self solutions. There are huge retailers very excited about what that will mean for the industry in the Asia region. And I say Asia region because every market has its local nuance when it comes to alcohol consumption occasions, route to market, taxation and legals, marketing and cultural relativity. What we're finding with POCOs, we've launched in Thailand, we're in Malaysia, Singapore, we're about to go into South Korea, Philippines, we're selling way more than we thought we would because it is a totally new way for people that are not in a mature wine market to approach the category. It's fun, it's colourful, it's not complicated and it's bite size. It's not asking them to commit a huge amount of money and drink a lot of alcohol. And so we're actually getting quite a lot of momentum because culturally, you know, they're really open to these changes in the industry. So Asia for me is going to be a phenomenon. I think we're targeting, we're going to roughly call around 20 to 30% growth this financial year, but I think we can, we could double that. These are off small bases like 20 million in revenue. Yeah. The other one is North America, you know, it's going through a phenomenal reset, lots of declining consumption, lots of pessimism around the alcohol industry. Look at treasuries announcements in terms of their business and what, you know, Sam, who's the new CEO there has had to really re-shift the focus of Treasury in the US because it's so big it can break businesses, but I also think it's, it's so dynamic that it can also make them. And so we're big enough to do something in the US, but small enough to do it quickly. And so Poco will run off the line in California, in July, this financial year. And so that's a big part of our, our focus for next year. If we can get a viable Poco Vino business in the US, it's a game changer for our organisation. So yeah, ding, ding. Very exciting me. Now you are excited about Poco Vino and that's a big part of your leadership, but you took over during a challenging period. How do you think your team would describe your leadership style? Oh wow. Well, to my face, very complimentary, I would say, but if you are seeing them in the back room, they'd say I'm very direct, very hands on. So European and you? Yeah, I think look, very passionate. You know, you've got to believe in what you're doing. I think that's a big part of leadership is you've got to be the one running over the hill carrying the flag. And people have got to, you know, want to follow you and believe in it. But also, you know, I think I'm super fair. You know, everyone's got a chance to execute on the agreed strategy and get a chance to be helped along the way. But if not, I'm pretty decisive. You know, we don't have the opportunity to to make too many mistakes. We've got to execute kind of flawlessly. And so there has been quite a bit of restructuring going on through the organisation. You know, a lot of it has been focused on potential kind of new ways of working. And so we're, it's trying to lead in a time that phenomenal change internally and externally. And I think just being transparent, totally clear and communicating to everyone where we're going and why. And I think the response has been pretty good. And leadership is a challenging role as well. What's the toughest lesson you think you've learned? In leadership, as you don't always know the answer, I think sometimes I would hold on to beliefs because I felt I needed in some ego-driven way to be proven right. But actually admitting you're wrong quickly in the face of irrefutable data is sometimes the best leadership trait. So I hold my opinions, but I hold them very loosely based on what data comes at me at any point in time. And I think in the past I've held onto things maybe a bit too long to the detriment of me and potentially those those ideas. And just a final question. We'll just sort of bring it back to the beginning. Some millennials drinking last Gen Z drinking last health conscious consumers reshaping the market, but you're still very confident that this is going to be a growth industry. Look, I look at I look at our business, I look at wine, you know, where a 250 million revenue company that has huge potential globally has the right footprint to do new things and create scale even in a market that might macro be coming down on certain edge parts of the industry. What that converts to is a sustainable net free cash flow company that will be reducing debt and have mobility in a time of consolidation. Like I'm excited by that, I look at us and go, we could be a natural acquirer, consolidate a partner, you know, we could be the benefit of what is coming in an industry, you know, dynamic. And so that, to me, is really compelling. And if all we end up doing is spitting out really good cash flow and dividends to shareholders over a long period of time because we're a good profitable business, there's nothing wrong with that. But I think we'll be part of a bigger game. And so that's the bit that I keep kind of looking to. So yeah, I think we've got a bright future, but we had to get the fundamentals right first. Well, it's used to that Tom Australian vintage CEO Tom Dussordel. [Music]