the call: Tuesday 30 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. Hello and a very warm welcome to the call on this Tuesday afternoon. Ten stocks picked by you with my two expert guests. So for the course of an hour and they're both with here with me in studio right now. We've got Francesco de Stratas from Ordmanette. We have Rudy Philippe Ben Dyke from FN Arena, Gentleman Welcome to the program. Boy, we were just sort of trying to solve the world's problems in that break before this program. But we'll stick with the markets in these companies that you've asked us to review. Just a general comment. I mean we're at the end of the 2026 financial year. You're excited with all the promise a new FY brings? Well, we'll have to see. I guess at the index level, it hasn't been such a bad year. It looks a lot worse below the surface. But if you add the dividends, it's a relatively mild year. So a little of investors will be surprised, I guess. And today, last day of text loss selling and window dressing. So next next week, we'll see more what this market really wants to do and orgises back in. Yeah, Chuck's last selling has come up quite a lot over the past week or so. Francesco, how are you feeling on behalf of your clients heading into this new financial year? I feel the financial years come around quicker and quicker. I'm pretty content with the way the market is at the moment. I mean, obviously the biggest factor that's affecting our markets globally is the conflict in around. And as it heats up and peaters out, the markets adjust. But I think we saw the initial, when the initial Boeing started, that pullback in the market, I think was probably as far as we're going to go. I can't see it lasting too much longer. I think the Iranians will realise that they don't have the firepower to last them out. And I think Trump wants this to finish pretty quickly because midterm elections are coming up and he doesn't want that sort of going on in the background. So look, I think our markets are final level. They'll go up and down. The margins they move by would probably a little bit greater, as bombs get dropped and peace treaties get signed. So I think we're destined for a bit of sideways move at the moment. And keeping in mind that we've got August reporting season. I think that's going to be telling, particularly with the Australian companies. We saw the last reporting the season. In the US, there was some really positive signs coming out of the US. But it would be interesting to see how they put it out in Australia. There has been some confessions already. We'll move into confessions season pretty shortly. So it'll be interesting to see who gets whacked and who doesn't. Well, Judo was whacked last week down by 40%. But then Niren, with this positive European approval yesterday, was up by 35. I think it's put on another 6% today. My point being, we're still getting these really, really accentuated moves. Yes, that's not going to disappear. I think 20% now on the day is nothing out of the ordinary. And I'm old enough to think, wow, that was a bit wrong. No, it's now a feature of the market. I guess we all have to deal with that in our own little ways. But yes, if it hits your portfolio, hopefully not in your largest holding. Yeah, I know. And you don't mind it when it's 30% of the upside. It certainly is a different story when it's 40% to the downside. Okay, let's get to stock of the day because we do have a few companies here in Australia that report sort of out of cycle, out of that sort of February, August collective. And one of those is Collins Food, which has reported its FY26 today, record revenue, thanks to growth in Australia and Europe. Also made a few changes to its brand portfolio over the period the company sold its Taco Bell stores at a $400,000 loss. Instead, it's choosing to focus on KFC and an expansion in Germany. So in FY26, revenue was up by 8.6% to 1.5 billion dollars net profit rose 280% to 47 million offset by a $7.3 million clash action settlement. Same store sales grew at KFC and digital channels now make up about 43% of its sales. Investors will get a final dividend of 15 cents per share. Oh, sorry, a full year dividend of 28 cents per share, fully frayed. Now shares were up in early trade, but you could see on your screen there now down by 3.5%. Let's get a view from the experts. Rudy, Philippe, F&Rina Collins Foods. Well, the way we look at the market and the way the market usually does as well is the numbers at face value were slightly better than expected. And that's probably usually why the share price was pondered positively at first. The reason why it's now down is I suspect while management is having an online chat with analysts. Clearly, I think some of the analysts must have heard something that wasn't quite up to scratch there. The times when when junk food, I'm sorry, quick service restaurants. When they were like no brain or defensive, I think that's behind us now. What these guys are battling and you see it also with other companies in that sector is that a consumer under pressure is not necessarily turning towards QSR. That's basically what they are experiencing. I mean, the share price is almost metrics. Here is not expensive at all, but clearly the market is expecting a lot more. And as for this time, relatively modest expectations for the year ahead up to Collins Foods to surprise to the upside. If they can, I also believe they had a small acquisition to that didn't they? Yeah, I think so. In Germany. And that's also part of the story. Of course, they're expansion in Europe is predominantly through purchasing existing stores. Yeah. And what I've just sort of sent a note at to the newsroom is in these results, we always look for that trading update coming through in the outlook. So the first eight weeks total sales growing 6.7% in Australia and 26% in Germany, but it does go on to talk about consumer sentiment being hit by the Middle East conflict, higher fuel prices weighing on sales in the early part of FY27, talking about costs, expecting a relatively stable cost environment, commodity inflation expected to be flat, talking about avian influenza in Europe. So my point being that it's not always as much as what has happened record revenue. It's what they're expecting to come down. Exactly. And that good number that you saw just then come out of Europe. I mean, how much of that is part of the acquisition that that made? I think we're looking at I think it was 8KFC stores in Munich. So I don't know what that translates to in revenue, but is that part of the reason why they've seen what was it 23% growth at the start of the year? Look, the revenue numbers were good, in Pat was up 13% to 61 million. They're all good numbers, but that's really sick, you know, analysts are looking forward and not looking at what has happened, but looking at where things are going. You mentioned $400,000 loss on the sale of Taka Bill businesses that they acquired. I think that's a pretty good outcome considering that, you know, if you've made an acquisition and it's not working out, you want to sort of jump ship $400,000 loss is probably pretty reasonably outcome. It could have been a lot worse. So look, at odds, we have a whole recommendation on it. The I'm not even going to say what the valuation recommendation is because it's just I think a little bit too high to be a bit ridiculous. It yields OK, you know, it trades on probably around the market every P.E. So some of all those sort of things stack up, but going forward, I mean, I kind of remember the last time, and this is anecdotal, last time I had KFC, but I'm sure people do consume it, but as I already said, that it's a pretty old brand. There's a lot of new brands coming on and coming out. So I think there's a really highly competitive space. Yeah, I know with my sons that, you know, they kind of don't think they would ever go into KFC, they go to Frengos. So there's a different sort of feel for the younger people where they're going. So yeah, look, our recommendations hold, I wouldn't disagree with that. You're getting paid a decent dividend to do that. I don't think I got a recommendation from you. No, you didn't. He doesn't want to give. I mean, it's not too expensive, but I think it's a, it's, I would put a hold on it to be honest. If this is your type of, of companies, OK, the other thing we have in the mentioned yet, which is more in the US, is as more and more people get on those GLP ones, they're less likely to go to KFC, right? And that's just, that's not necessarily something that's impacting already, but it's definitely something that the market would be, would be paying attention to. All right. So that's like CKF, Collins Food, one of the first companies to report. So of course, we are entering this new financial year. Let's get across some of these stocks on the list and in the big end of town, Evolution Mining, Green Corp, Tab Corp, Tyro Payments and Pepper Money. All right. So let's start with Evolution Mining and this one is for Jason. So to have a view on Evolution, I suppose you have to have a view on gold, copper. So what is yours, Rudy? There's a couple of workers this week that have updated their preferences for gold, because they believe that after a 25, 26% sell off in gold, the tide is about to turn for, for bullion. Most chapwriters have followed gold to the downside in Australia. I happen to be on board with the longer term, the matic for gold. So on that basis, I think Evolution Mining is at the very least a hold here and you could play the recovery of gold through Evolution. For memory, it's at least some of the brokers have it as their number one preference. If you want some more international and larger cap exposure, you can always play the theme through New Mound. New Mound maybe would be more preferred by myself. And then of course, you needless to say, if you have more risk appetite, you can go for smaller ones that will jump much higher, if gold does go higher. But then again, higher risks as well. I think in my view, I sell them to stock stocks. I play gold for gold ETFs. But if you want to, I think this is going to be a buy. So hold, Virgion on a buy. Oh, we're going to call it a buy. Thanks, Rudy. Now, I would imagine your clients would be more comfortable in the bigger names. Yes. Yeah, we're more conservative at all. But we do cover Evolution. We have an accumulated recommendation on it. So let's suppose a stock a buy. If you like, if you've got some, keep adding to it, the copper angle on it. I mean, personally, I like copper, but, you know, copper is a byproduct of the gold rather than gold being a byproduct of the copper. So, look, it trades on a fairly attractive PE. So, you know, it's 14 and a half times it, you know, it's a real market. I would expect, you know, a gold company. If you're expecting the gold price to rise, this looks relatively cheap, I would suggest. It's paying, you know, 4% fully frank dividend for FY 26. It does decline a bit because the analysts probably have those earnings slide a bit. But, you know, it's up to the individual to think, well, I think the gold price is going higher or lower. If you think it's going higher, you're going to get leverage out of miners because, you know, the production costs and so forth are affected into it. So, you're, you're higher cost producers. So, your smaller miners like Rudy's mentioned, you're going to get more of a margin expansion on that. So, the share prices are probably going to get more leverage. On your bigger miners like Niemont, because they're the lower cost producers, the margins are a lot lower. So, sorry, the margins are like greater. So, the as the gold price goes higher, they're not getting as much leverage as the smaller ones. Look, I like evolution. I think it's fine. If you're like gold, then you're going to get a bit of leverage. As you mentioned, you have a little conservative at odds of prefernimal. Okay, got it. Niem, let's get to stock number two on the list. And this one is for grain corp. This is for bow. The grain corp is another one of those companies that does report out of cycle. So, it's a complicated one. Isn't it for grain corp? Because we've got talk of extreme alinea, we have talk about rising fertilizer prices because of the straight up for moves being closed. And then you've just got like all the vagrancies of being in every stock on top of that. But, you know, it's got infrastructure. It does. And look, with grain corp, I look at it more of a short term, not necessarily a trade, but a shorter term investment than a long term investment. That autumn drawer kind of stuff. No, it's not something like, you know, your mum and dad invests has got their CBA and they've stuck it at the bottom of the drawer for 10 or 15 years. It's one that you would need to trade. I think it's a buy at the moment. I think it's trading well below its fair value. Aaron also got about $7.25 on it. I think that's pretty fair. If I bought it, I wouldn't wait till I got the $7.25 for I exit it. They're very firm. They're earnings for FY26. As you've mentioned, all the challenges in the global grain markets. They've declared a fully frank dividend for FY26. So that's locked in. They've recently sold grains connect, which is part of their Canada business. They're consolidating some of their assets as well. The thing that I think is the unknown elements of the external factors that can affect it. Like you've mentioned, the political events, the weather events and those sort of things, which they have no control over. Hence, when it's cheap, I think it's worth buying. And then as it rises, then I think you need to take profit. She can't sit on this one. Okay. I just went to my Athena Reena Rudy. See that buy from Ord's Spell Potter Hold. We've seen an upgrade, I guess fairly recently. The weather changed. Well, yeah. The weather. For before. So do you, like there's a price for everything, right? No, I'm not that I would invest. That's a different type of investor. Basically what has happened is brokers were analysts were quite positive about the rain group as was management. And then we get the declaration of El Nino and that has thanked the sharepires. Since then, it would appear that the weather pattern has changed yet again. We got more rain, which basically means that there will be more grain. But the market has sort of not really jumped on that one and is obviously waiting for more change in the weather. I'm not a big fan of investing in the weather. I'm not a big fan of investing in companies that don't have control over their outlook. I mean, I said, there's every time agricultural stocks come to the fore. In Australia, they were relatively small and they're definitely not bottom-draw stocks. Before you know it, the damber of 30%, 40%. So it's not to my liking, none of them. But I can definitely support the idea that from just to put forward is you buy the wind and down and you wait for things to turn. And if that's something that you sort of attracted to by all means go for it. I wouldn't sell it here. It's probably seen this bottom, but I'd basically go elsewhere. But if you really, really want to, put a hold on it. So that, Koshy here, did you know becoming an Osby's contributor gets your stocks straight to the front of the queue at the call and to the expert of your choice if a big if you become an Osby's contributor. It's our small way of saying thanks for your support. The link to become a contributor is in the show notes and we'd love it if you could leave us a review as well. Thanks for listening. Okay. Okay. And cash to dividends and wait for better times to alarm. After all our bases there Rudy, all right, let's get to stock number three. This one's for Finn and it is tap court. Well, tap court has been getting the ruler run over it in terms of money laundering. Straight exactly. Who would have thought? I know. What a surprise. You've never thought that one. No. So I mean as an investor, that's obviously one of the risks that you have to contend with. Yes. And very early in my career, this is already the previous century by the way, previous millennium, I learned that institutional investors they they want for the hills from the moment you have any sniff of this type of investigation going on. And as time goes on, you can sort of see why that is. You don't want to be you don't want to have this in your portfolio basically because you never know the outcome even though there's probably just a slap on the wrist and the pubic get a get a fine, but it will depress the share price for longer. Apart from that, their winnings and their income is a bit disappointment is disappointing as well. Tap court was often mentioned as a sturdy defensive, but I've been following this talk for at least two decades and that comes with a big dose of salt because there are times when the share price really is not performing and it's I mean, so it really hasn't done anything. Exactly. I mean that's the lottery corporation being spun in that space. Yes, that's a little bit not accurate, but nevertheless even as a defensive, I really can't get really excited about it. So I'll say It's a hold because it's probably too harsh to say sell and run away. But there are better alternatives out there as far as I'm concerned. Not for Rudy. And if it's in this sector, I think both aristocrat leisure and Leidenwender are so much better in quality and in. Risk and what's the remiss of it? And Leidenwender. Oh Leidenwender. So much better in prospects and in quality. Okie dokie. Do you say things differently? No, I agree with Rudy, 100%. I mean, this is a stock you'd think would be a loss of support money. Gambling, generally the house always wins. But our regulatory environment, which you have to have, does make it tough for a lot of gaming stocks. I mean, look at Star City. And sometimes they make their own bed too. So, look, I always thought that the regulators were going to have a sniff around tabcourt. And I think at some stage they'll have a sniff around the likes of Endeavour and pubs and things like that at some stage. So they're always under investigation. On a valuation basis, I think it looks ok. Our guys are going to accumulate on it. I think that's probably a bit optimistic. I've been more of a hold because it pays you a decent enough dividend. Although FY26 has got no franking on it that I can see. Now, I could be incorrect with my numbers, but I don't know. And FY27 doesn't seem to have any franking on it either. The franking comes back in FY28 based on our analyst terms. So you're probably ok holding it, but it's not the one I'm going to rush out and put it in portfolio. I'm a fruity aristocrat. We hold in a growth portfolio. You're not going to get great deal of income out of it. It's a good stock, good operator. Light and wonder would come in second on that as in game developers. And they're not only exposed to the Australian regulatory environment. They're also global. So it gives them more opportunities, I think. And if you want to get exposure to the local gaming market, I think it never is probably a good one. Obviously in the pubs with the GAM, poker machines. I don't think the government is going to burn the hand that feeds it a lot of the time. So the hotels with the poker machines do pay a lot of money to the government. Yeah, ok. So some agreement there when it comes to tap court between my two guests. We are already on number four. Let's see what we've got. We have tyro payments. This one is for Dylan. What do we say about tyro payments? It has been a long and at times illustrious road for tyro. Will it be a choir to expand? Will it be the. I guess that's what Charles are hoping for at this point. I think this is one of Peter's switches favour, at least it was. He's got a podcast now and he actually said, oh no, maybe it was on his programme. He interviewed the CEO of tyro. Yeah, it's been very favourable. Yeah, where do we start? There's a few things that they really have against them. At the end of the day, yes, they've eaten into banks market share in that particular as the main part of the system. But there are still a relatively small player. Competition is cut for out. The international have come to Australia as well and they're the likes of Square and others. They are equally fighting for market share. Equally important are already saw one of their competitors launching an AI embedded product which Tyro doesn't have at this point in time. And probably even more important, the Australian economy is not doing it very well. Small businesses in particular in the space where they operate in, restaurants, coffee shops, you name it, they're doing it tough. Well, and you've also got challengers to Tyro now. Really? Where's the. I'm just throwing this out there, brand loyalty. And if you're a small business owner, you just want the cheapest solution possible. And they might very well have it, I don't know, I'm just saying. No, no, I can't get excited. And I know the sharepises down a lot. Yeah. But I'm not the investor who thinks there's a price for everything. So would you hold on if you're already in it? We don't know the context, we don't know. No, I know. But if I were still in it, and the sharepises have been so low for such a long time, I would really give myself a really hard time. Yeah. And I would shout it out the mirror image, I think. My view is, it's never too late to sell. And this is from someone who once upon a time had shares in Slate and Gordon. Nobody is perfect. Exactly. And I was glad I sold with something like 5 or 10% losses. And I afforded 96% losses. Never too late to sell. There are much better alternatives out there. Stocks that have a much better outlook. And at least half of this market is undervalued. So pick your pick. But it won't be Tyro. Now Tyro? Yeah, before we go on really, no one's meant to mention Slater and Gordon Ram. I'll end up in the fatal position on that one. Yeah, Tyro, look, I was really, I mean, not that need to put quite money there. I mean, if someone's looking to invest in this, they're looking for some significant capital gains. And you know, you're in different growth. You'd have to have a deeper knowledge than I do of the company to invest in it, I think. Look, they've reported strong first half, 26 profit growth. Ebit margins were better. Really mentioned AI. They did acquire a company that has an AI powered financial management platform for SME. So I don't know how that fits into their sweeter products. The RBA card payment reforms, they're welcome. Obviously, small competitors in this environment do welcome regulators being a bit tighter. Otherwise, competition might squeeze them out. But there's no dividends on either. So I find it hard to get excited about. It's a small player in a big market. And look, you know, if they get a little bit of market share, yes, it gives them good leverage. But it's not going to not going to excite me. I don't know if I'm going to have a recommendation on it. So look, if I owned it, what would I do? Look, this is a good time of year to be dishing out some of your tax losses. If you've had some gains through the year. Have you had a new today or have you had a new today? Have you had a new today? That's correct. So, you know, sometimes people look at losses and sometimes I'm going to look at them from positive points of view and say, I can use that offset some of my gains. Yeah. All right. Tyro payments and I'm getting a lot of love. Let's see if Pepper Money gets a bit more love. This one's for Alex who does give us some context. He says he'd like a view. He reckons that he would like a view on its prospects and earnings stability going forward. All right. So, Rudy, can you answer any of those questions? There's a big question on stability. Here's a proposition. The market is basically a particular after the budget, but we've also had three weight hikes. The market has taken a very dim view on everything that's related to the housing market in Australia. Pepper Money is one. Ariane Coob is another one. There are more companies linked to mortgages and housing. AFG is also another one. The share prices are down a lot. Now, I don't know Pepper Money intimately, but I do know that some of the other ones. You could make a fair argument that the share prices probably fall way too much. The market is taking a very broad measure of security that whatever comes, whatever lies ahead won't surprise to the downside. Having said so, so if you take the view that probably the share prices too low here, as it is for RWA, AFG, AFG, Pepper Money and others, you may still have to wait quite a while before the market gets comfortable. In some areas, housing markets are down by 10 to 15%. We get this retreat from investors. We get the entrance in the market from first home buyers. And we have pressure on budgets and probably insecurity about SMZF's and property trusts. You combine it all together. We don't know, but uncertainty will linger for a long time. Maybe August will give us some view, but that's probably too early. So I think if you're in there, you're probably not going to sell. You probably endure the share price weakness. They do pay a dividend. You take the view that the news will not be as bad as the market is priced in. Having said all of that, you probably have to be patient. This is another recovery story. I don't think for this year. You might wait until next year. Okay. And keep it. - So from the moment that the market starts looking forward that the RBA is going to cut, the share price and the other ones will probably really quite pronounced because the share prices have fallen so much. - Now there was an offer on the table earlier in the year from Challenger, but I think that they cut the offer price because of the share price retreating. I'm not actually sure where we're up to without that. - I think it was made to shareholders proposed to take over and they canceled it. Why I don't know. So maybe they were looking at the books and decided against, you know, but it's been canceled, I dare say they're not coming back to the table. - So Rudy was saying basically the stability is not there right now in terms of earnings outlook. Is now a good time to get into some of these beaten down names if you are a patient investor? - You don't have to be really patient, I think for this one. Looking at the dividend yield, it's yielding 9.2%. But that's, I think that's a dividend trap. I mean, if you look at that chart there, I'm no chartist, but I don't see any stopping on that. So I can see this at a much lower price. So if I owned it, yeah, I'd use this tax loss sum. I wouldn't be buying into it. I'd, yeah, maybe watch it. So if these major shareholders might come back to the table, sort of doubt it. Yeah, they're saying they delivered record originations in FY25 and experiencing earnings growth. But as Rudy alluded to there, you know, they got changes to the tax environment about sort of how people invest in property and that. And I think you'll find these non-bank lender types are the ones that are lending to more of an investor rather than a homeowner. And therefore, you know, that exposes them more to that type of customer. So yeah, I don't have a recommendation from Ords, but my recommendation personally would be, if I don't own it on my buying it, if I do own it, I'd probably sell it. - Okay, thank you. That takes us to the halfway mark. So I'll just quickly review what we've learned so far. Our stock of the day was Collins Food, did put out its FY26 results today, this the final day of the financial year. While Rudy says it's not too expensive, it's not his style of investing. QSR got a little poo poo by Rudy, if I'm to be honest, it's a hold for him, it's a hold for Francesco as well. It's a highly unpredictable space. Yields are okay, but he's not rushing out to buy it. Nor is he rushing out to buy KFC, it sounds like, all right, let's get to the company's nominated by you. So evolution mining, it is a buy for Rudy. However, he prefers Newmont, Newmont is the preferred pick for Francesco as well. So he's got a soft buy on evolution and accumulate, fully frank, dividend, sitting in about 4%. Green Corp, it is a buy for Francesco. So only on the short term though, you need to stay on top of this, price target at $7.25 at odds. So beware though, and it's an avoid for, well, it's actually a hold for Rudy. It's not a big fan, but if you're in it, he agrees that you buy these when they are cheap for the turnaround. Tab Corp, it is a hold for both of my guests. They both would prefer a wrist-trap, light and wonder. Regulatory risk is the name of the game when it comes to Tab Corp. Tyro, it is a sell, no excitement for Francesco. Also, kind of a reflection of what's going on in the Aussie economy says Rudy, it's a sell. And you heard it's a sell, peppermoney is for Francesco. Questioning whether it's a dividend trap 'cause while the dividends high, where's the capital growth going? Well, it's not existing. Existent, the share price is retreating. So Rudy says you'll have to be really patient with this one. Hold if you've got it, but he wouldn't be buying it. So I mentioned that we are at the halfway mark. We update you now on the fantasy portfolio, but I'm not gonna give anything away because the new episode is up online. If you haven't had a chance to listen or watch it, it's can be found at osviz.com, at the investment committee, drop down menu at the top of the site. So there were some changes made, but again, you'll have to go watch it to find out. The fund is up by 34% since we started tracking it back in March of 2022. Double buys from this program, get sent to the committee. None today. We'll see if there's any in the second half of the program. In a world of market noise and uncertainty, a disciplined approach to investing that is more than ever. Wealthy and Wise brings team invests, value investing playbook to osviz, unpack how the macro environment impacts business analysis. With the market is up the top there, everyone's saying I've made these fantastic games. I'm doing really well. So declination is more inclined for people to get in rather than get out. Put similar stocks head to head and make a call on which one wins. Why are in a company that has so many leading indicators of a massive scandal about the happening? Plus ask team investor experts to deep dive into a stalker topic of your choice just to email us your questions. Live from 1 p.m. every Wednesday. Wealthy and Wise is your guide to value investing powered by team invest. Coming up in this half hour eBoss group, Medibank Private Waypoint Reatt, Centuria Capital Group, and Transurban. Let's begin with eBoss group. This one's for Roger. You don't know what Roger was writing in about eBoss group. Sorry Roger, if we've lost your commentary coming through. Let's pretend that Roger is looking for a fresh opportunity. Rudy, is this it? Yeah, that's a big question. But I'm inclined to give eBoss the benefit of the doubt here. They actually had been until they lost that contract to Sigma. They actually had been quite a sturdy reliable solid performer for many, many years. They're New Zealand based, but they obviously have a big base in Australia. They are sort of forced to reinvent themselves. To be honest, I didn't really mind them around the $30 mark, but they've sort of halved since then. And so the market really, really has gone really, really harsh on them. Probably another sign that this market is really polarized and 60% of the stocks does nothing or goes down quite a lot. So they're reinventing themselves. I think their core business is quite reliable and sturdy being they're basically shipping medicines to hospitals and the like. But having said all of that, I'm currently a shareholder in Sigma. And my preference is definitely with Sigma. I think Sigma is going to kill that sector to their advantage. And Westphalmas is in there as well. So it's not like there's no competition. So my preference, if you own eBoss, I think you can own it here for the turnaround, which at some stage I think will show up. But if someone says to me like pick your pick, might pick Sigma. OK. I got the contacts from Roger. Sorry, Roger, if you're listening or watching. He writes that he's taken an initial starter's position based predominantly on valuation grounds. And you can see why in that chart. In his opinion, it's a quality business. So he would like to hear your opinion. So quality or not quality? It is quality. It is quality. And it is basically the turnaround hasn't arrived yet. And turnaround's can take quite a while. It can. It has. But the core business is good. It just has to show up in the numbers. All right. So Roger's got a small position. He'd like to know your view whether this is a quality business he's in at on valuation grounds. Yeah, look, I tend to agree. Roger, I think a small position to start with is not too bad. I mean, I think the share prices come back hell over a lot. And it's probably presenting really good value. We have a training on less than 14 times earnings going forward. So for-- I would-- do I call it a health care stock? It is a health care stock. But it's really a sales and distribution. Holesala in the health care space. So you'd expected to trade on a higher multiple. Although health care stocks globally have come under a lot of pressure. We've seen CSL come off, Cochlear, ResMed, you name them, the big names, even globally have all come off. And they're all trading at multiples that you'd fall over yourself three years ago to buy them. Neta is there in the two hardbasket. I think the whole sector's showing really good value. So I'd be a little bit patient on this. This is a smaller company than the likes of Sigma and really mentioned with West farmers as well that's in this space. So I'd be patient at the moment now. And let's see where it tracks out of the next sort of couple of months before I'd add more to it. We have a buy recommendation on it. I'd be a little bit softer on that. I'd be probably more of an accumulate than the analysts and the analysts is very optimistic. I don't think the whole sector's going to turn around that quickly. So I think a little bit of patience and rewards will come yielding 5.4% fully frank. It takes up to 7.8%. I think it's rewarding you to be a bit patient. All right, Roger, look, there's your opinion from both of my guests. Don't forget this is information only. It's not personal financial advice because we don't know the whole picture. So you'll have to do your own research or seek out financial advice, but that's the view today on the call. Glad we got your context in. Thank you. All right, let's get to next on the list. This is MediBank. This one is for Ellie. Rudy, I'm going to you first because you've mentioned cost of living a couple of times in the Aussie economy. I mean, are these private health insurers at the mercy of some of the broader sentiment factors as well? There was an element in there, but the larger player in the market, which is MediBank, they're basically eating on both sides of the cake. They also have a cheaper product in the market as well. And on average, they're doing relatively well through the cycle and since listening, they've done relatively well. At the moment though, I would categorize them as an expensive defensive. And you can see, since March, I think, we couldn't either go back to the first of January. The local share market has had its runs in commodities and otherwise a very defensive market positioning. You see it in lots of wallowards. You see it in calls and you see the MediBank private. So money has to be treated onto the defensive side because of examples like worldly, judo capital and the likes. People don't want to lose money. So they go into the defensive. At some point, you would expect that's going to change again. The money's going to flow out of those stocks. So if you own MediBank private, the likes of MediBank private, I think you can hold them. If you have a longer term view, but you should be prepared to the share price, probably at some point goes a bit lower because money is going to flow into some of the stocks that we're discussing here that are really, really cheap. And at some point money will flow back in there. If that's now, I don't know. Maybe we have to wait until, as I said earlier, when the market has time to again start focusing on hey, the RBA is changing in tune. And maybe then we start buying these stocks. But at the moment, I wouldn't necessarily sell something like MediBank private because you get a different yield. You're probably doing well, longer term, you take a longer term view, the share price should be up. They're very reliable, sturdy, solid, you name it. But at the same time, don't expect miracles. And at the moment, I don't think they're cheap. Buy holders, sell MediBank. We've got to buy. I'm probably a soft buy on it because where the price is at the moment. I think really is right. If it comes back under $5, I'm happy to be buying it. It is a defensive. And it's got to remember that the tax legislation forces people to be, yeah, probably health and short. So that's a good thing for MediBank and other private health insurers. They're experiencing customer growth at the moment coming from the company. And younger member participation, which is interesting. I think younger people, they are realising that, yeah. And some of them, because of their owning capacity, as well, that they've been forced into taking out private health insurance. And the brand name MediBank, their parents probably had MediBank coverage. So that's all they know type thing. So policy or holographic growth is still continuing. They haven't changed any of their outlook for FY26 and revenue rose strongly in the first half of '26. So look, all the numbers stack up. But because it's defensive, you're not going to get a lot of volatility in the share price. But if what really suggests, and it can happen, the ones that are really cheap, the bit of a rotation out of the defensive, that's going to create buying opportunities for something like MediBank private. And we hold an our income portfolio. And it's been a bit of a stable there for quite some time. Yeah, all right. Of course those dividends that do go up. Yeah. Yeah. And the dividends are defensive different to what we mentioned earlier with Peppa Money, where you look at a 9.2% dividend yield. But I think that's a bit of a dividend trap rather than anything else. OK, let's get on to Waypoint. Read. This one is for Bailey. Again, Bailey, I don't know if you already own this one. But REITs have been coming up a lot in conversation this week because of this whole notion that we've hit peak rates. Waypoint is fuel and convenience, solely, I think. So is that an attractive part of the REITs complex to be in for you? Yeah, look, the other element that you need to appreciate is the changes to the tax environment, which is forcing people out of direct property ownership. They're now looking at the share market and REITs where they can be a little bit more agile in their investment in the property space. It is an asset class. I don't call this Aussie equity. I call this property. So it's slightly different. And the difference being is that you don't have to buy one whole property by shares. And it can be a little bit more agile in your investment. Waypoint is a good one. It's one of our preferred, if you like. It's yielding 7%. It's trading on a multiple of about 14 times. It's gearing levels of 32%, which I'm happy with. The 30 to 40 would be normal for a property trust any higher than that. I'd get a bit worried. The weight at average is 6 barries, around 6.4 years. And they're at almost 100% occupancy. So for me, it stacks up as a good property trust. Most of the service stations are V-Vir energy. They've exercised the 10-year lease option on 21 other sites. They're buying back some of the stock. I think they just completed about 50 million buyback. So let's keep the share price where it is. If not, should go, we have buy recommendation. I'll probably agree with that. Not probably. I wouldn't agree with that. You would. As we're looking at client portfolios and we're moving some more into property for clients, that'd be one name that we'd add. My holder's sound. Hold. And definitely not prefer the my hand. But I don't disagree with anything that Francesco just said. But one thing that I see is there's a lack of growth. And I think even with trust, you better off with trust that can at least get in growth as well over time. What you see over time over the past five or six, seven years or so, this particular one basically moves in line with bond yields and with expectations of tightening and loosening. So on that perspective, if you have patients, I will be loosening at some point so that becomes attractive. But I don't think there's much happening in terms of growth hence why they're also buying back their stock. So I'm a little bit more lukewarm on this one. I would definitely not put it forward as my most preferred one in that sector. But the same respect, a cash to yield in, wait for the RBA momentum to turn and you should do well. OK, let them compare that one to Centuria Group. This is C&I for Riley. So it's real estate. But it's also funds management. Pretty diverse. So it's commercial opportunities. They've got a little sort of AI play as well. I don't think about it. But I'd say the magic word as now dropped on gets interior. It's AI. So that's why we recently saw that run up in the share price. That's why I get a little bit more ANC because yes, it's nice for them to jump on to that. But it's a long-term story. And we might have to wait a long time. So basically, disappointment is almost by definition waiting around the corner because that AI enthusiastically Peter off, because they are very unlikely to come up with positive AI news in the shorter. So on that basis, I would actually hold off. And I would actually depend on what you're buying. But you're buying essentially a manager of reads here, of assets. In that perspective, it's relatively small. If that's what you're looking for, I would put forward a STH limited as a, I think, a better proposition as a manager of assets. This is too much AI exuberance in it for the time being, I think. So I would go elsewhere. So you'd avoid that one? Would it be already under? Would you hold it? Myself. Ah. Yeah, I would actually sell it, I think. I would go elsewhere because, as I said, the AI enthusiasm, I think it's too early. Okay. Centurally capital. Interesting change in direction for them if you like to the AI. I think all property managers want to be data centers. These guys are a little bit different in that day. And they use the term AI factory. I think it's a bit, I might say the word, but, um, yeah, most data centers are a shell. And then the data company will come in and put in their, their racks and their, their, servers and all that sort of stuff. These guys are intending to provide the whole solution, which I suppose. is novel, that to me takes on more risk as well. The biggest issue with these data centers is power. You can't put them in certain areas because they can't guarantee enough power to cool the data centers, how we call them the racks and so forth, on no tech person. But there's a lot to it. They just raised around a million, obviously to expand in this area. They're not making any money in this area at the moment, but their intentions are to have the next two to three years. I'm as ready. I'll probably more of a hold if you've been in there for a while. If I'm going to get in this path of a, and I call them not a property trust, I'd call them more of a property manager, I'd be looking at things like Goodman Group. They're the biggest and best at this in this space. Avos got to buy on it, but I don't necessarily agree with that. I agree with Goodman though. Yes. Any other one, Charter as well. Charter is a good one, but has a sort of, it doesn't get too overvalued like you're meant to do. Well, look, we'll leave that one there. Just a quick shout out to one of our viewers who has just made a supporter contribution. Thank you so much. We really appreciate it. We're very pleased to be helping you invest better and our experts obviously contributing to that as well. But thank you. And you can become a supporter just on the website top right hand corner. Just thought I'd give a little shout out to BR. Thank you. All right, let's get to the lucky last on the list. This is Transurban for Abdul TCL is the ticker code. Yeah, it's Transurban sort of an attractive defensive play for you or? It is. I wouldn't buy them at these levels at the moment. We're a whole recommendation on to agree with that. Look, I like Transurban. It's just one of these businesses. If you look at the revenue side of things, traffic numbers, times, tolls, traffic numbers increase here on you, the only year that they didn't was during COVID where they felt, but obviously they recovered and have recovered to well above that. And then on the other part of the equation is the tolls and they rise by the CPI plus a margin each year. So the mathematics on the revenue side of things to me just is pretty transparent and pretty easy. And then on the cost side of things, Transurban is one of the best toll road operators in the world. They do have roads in the US and even novel things like in the US, you can pay more to use a faster lane. So there's even novel ways of actually achieving what they want to achieve. I like it because of those qualities. It's yielded at the moment to about 4.6%. There's no franking on this because it pays it out of the trust side of the stable security. But it's PEE is pretty high. Sorry, PEE is very high, but this business you're looking at from a cash flow perspective rather than an earnings perspective. But where the price is at moment, I'd be hold. But if you say it down in the 12s, I think it's a good long term investment for portfolios. Okay. What do you think of that, Rudy? Yeah, not only pulled be the one of the best infrastructure investments you have on the ASX. It's one of the few now. There's not too many left. But maybe a different angle. On occasion, I always said to people like Next CC is not a technology company. And if you want to know what Next CC will probably look like in 20 years time, look at Transurban today. And that is basically where they're going to their infrastructure. At the moment, Next CC is a very strong growth phase, completely different form of wind wind Transurban now is. But Transurban, I remember when they listed way before my time in the 90s. It took them a lot more than a decade to before they reported their first profit as a listed company. And that was not because they were a technology company. That's because as an infrastructure company, you have the costs first and there were awards come later. And that's basically how it with young infrastructure companies works as well. At the moment, it's very difficult to argue that they are an attractive proposition or cheap or whatever. But they are sturdy, reliable. So you just pick your time and you're rising. But if you're not in it, you can hope or wait for cheaper entry point. If you're in it, you hold it, you cash in the checks twice a year and you take a long time to get it. The very good acquisitions as well. Generally, we'll only acquire roads that are mature, so they know the traffic numbers. And a good example of that was the Lankov Tunnel in Sydney, which I think was a consortium of a Canadian pension fund and a few others here in Australia that I think it was 1.2 billion at cost and to build it. They went to financial difficulty and Transurban bought it for 600 million. So they're pretty. Remember the Brisbane? Brisbane X, I love that story. Avoided that like the plague, thank you very much. So they bought all those roads that investors paid too much for. Sorry for the view, this is all people talking. I have no idea. I have no idea. Any of the two on the edges. I'm kidding. Look, I mentioned the supporter, which has made my day. I will say we got a viewer also writing in. And I'm going to put this to you guys just because I can. E-boss, he wants to know how you can possibly be calling E-boss equality companies. So you only have to, you know, 10 seconds or less. Why would E-boss be quality companies? I don't know why you wouldn't call them a quality company, but I guess. Well, I believe this person is looking at the price only. Exactly. And that's often the problem when you only look at the share price. I mean, these guys lost the contract. They've obviously gone through a little bit of tougher times, which every company goes through, even today's Microsoft has had its times, apples had had its times. And quality company is because they have a very strong correlation with their customers. They have a very reliable core business. That's where the quality comes from. It's the same thing as why you would regard a cochlear or CSL, CSL previously as a quality. It's the core business that gives you confidence in investing in them. But that doesn't mean that other things can't happen, right? Whether contracts, government regulation, you name it. But I think, and also, if you look at the years, since they're listed on the ASEX, they've basically done everything right in acquisitions and in development of their business. Unfortunately, that doesn't work out in past few years, but if you believe that management and the core business remain quality, then they will find their way back. Any agreeance quality? Yeah, look, and I suppose the comment came through because the share price was where it was and is near where it is. And unfortunately, management can only do so much to drive share prices. Sometimes companies get significantly overvalued and deserve to be solved. There's some companies I look at and I go, well, it's a quality company, but I wouldn't pay that much for it. It's no different going and looking for a small business. Let's say you're going to buy a corner store. It's good foot traffic and all that. It looks like it's well-run and you think, well, that's a good business to buy. The proprietor puts up a price and you go, well, hang on a minute, that's too expensive for me. So I think sometimes investors look at the share price before they look at the actual underlying business itself and on with Rudy. I think management has done quite a good job with the business, looking at earnings growth over the years as well. It's in a great sector. I like the healthcare sector, despite what's happened to it over the last six to 12 months. And the analogy of, I think CSL's a high quality business. Twice six years, by the way. I think CSL's a high quality business, but look at $300. It was expensive. Now I think it's cheap. But the underlying business has changed much, not really. Yes, they've had a few issues with some earnings growth or lack thereof and changed their CEO, which I think had to happen. But the underlying products and the quality of the business hasn't changed right there. All right. I think the conclusion here is that share price doesn't tell you whether a company is high quality or not. It's not the share price. Yeah. It's the online business. Yeah. There you go. No more emails. I'm not going to read any more emails right now. Thank you very much. E Boss, it is a hold for Rudy quality company. But he does prefer Sigma. It's a patient buy for Francesco, but recognizing that the turnaround still needs to happen. MediBank, it is a buy, a soft buy, I'd say, for Francesco. It's a hold for long term. It's an expensive defensive, says Rudy. Waypoint read, it is a buy for Francesco, but it's a hold because growth is not there enough for Rudy. Centriure Capital, it is, I wrote down everything from no void to a hold, but we landed on a sell for Rudy. And it is a buy. live rewards but a whole for me. - I thought it was full for Francisco, both of them preferred Goodman Group. And you just heard what they had to say about Transurban so buy it around $12. Says Francesco but it's a solid hold for both of my guests. That was a fun program. I like having you guys in. Thank you Rudy. Thank you Francesco. - Thank you. We like you doing that. - Yeah, we like you. - Thank you to our viewers and our supporters. Thank you for sending in your requests as well. Osbus.co/callpix. Stay with us. (upbeat music) - 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 at 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, you know, 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 need to bring our finance partners along for the journey. So for the last kind of six months, we've been working collaboratively around what those next one to three-year plans look like, what kind of funding do we need? How do we secure it? How we align all the covenants 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 though have heard turnaround stories before and 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, you know, that was always my measure at the half was to say, don't judge us on the first, judge us 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 four to five percent growth in the second half. So minus 1.7 to a four percent to five percent 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, we 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're 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 to optimizing our great supply, how we utilize our wine. So I now am clear on every lever within the business. And I think we're just at the beginning of how we can optimize that cash utilization and protection going forward. It's interesting you touched on COVID, because 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 used to, people have less cash. Interest rates are rising, petrol prices are rising. How does all of that and that gloominess kind of 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, flavoured cans, where you can buy one to four or six or case, it's up to you. Doing really, really well. RTD globally offers smaller bases, continuing to grow. Beer's pretty flat, but still showing good buoyancy in some emerging markets, because 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. 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 don't open bottles of wine often influenced by the size and the volumetric nature of that drink. We don't want to go out 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, OK, this is the opportunity, but it had to be executed in a way that solves 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's 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 a 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 advanced 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, 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. As she said, that she founded in her local liquor store. And it's quite popular. She asked the retailer. I have to say in mind, 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 Licka 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 Licka stores have huge choice. You know 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 with our retail partners who fully believe in this trend and this movement to create destinations to sign posts for people. You know 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. You know 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 it'll originality. You don't know what to buy. Yeah. You're guessing or you go to things that you're comfortable with. You know 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 you know 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. Yeah. 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? Lim Seco and the like? Lim Seco continues to perform like there's two stories. Pocovino we drove distribution. We agreed with partners and went everywhere. Lim Seco has just been growing organically. You know 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 Lim Seco at $12 USD on shelf. And believe it or not it is more economical for us to make it here. Ship it there and sell it. Now then it is to make it there and ship it out from you know domestic production. So even with all this tariff torque 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 Lim Seco 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 firing away our biggest bet. Yeah. Going back to the fact that people are drinking less and some people aren't drinking it 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 you know the healthier aisle has now become just the store. You think about the growth of gluten free, of fat free, sugar free, you know 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, Pinanois, 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, 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 alcohol 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. It just doesn't deliver as in the way that beer is managed 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 are 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, are to have big factories is a bit of a noose or a bit of a challenge. But actually what it gives us is an incredible capacity to serve as huge volume potential. So Pocov, 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 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, oh, 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 a 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. And it's predominantly in charas and reds, you know, 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 pen and y 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 Pinaigri Gio are going nowhere. Yeah. You know, Sav Blanc and Shardinay go through this constant kind of up and down over the decades. Pina and Y is not going anywhere. There's a definite shortage. And 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. And so that's what we've been really focused in on. Whether or not you like so in your long or Shardinay is such a contentious issue as well, or mugged friends, can't it be? Yeah. 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. You know, that's been the court that does 90% of our of our of our dollars and our volume. So when I go around Asia and I talk to them about trends in spritz, I show them small formats and disruptive shelf solutions. They're a 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 and cultural relativity. What we're finding with POCO is 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, they're really open to these changes in the industry. 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 could double that. These are off small bases, like 20 million in revenue. The other one is North America. 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 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 so dynamic that it can also make them. We're big enough to do something in the US but small enough to do it quickly. So POCO will run off the line in California, in July this financial year and so that's a big part of our focus for next if we can get a viable POCO Vino business in the US, it's a game changer for our organisation. Yeah, ding ding. They're 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 you're opinion in you? Yeah, I think look very passionate. 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 who've got to want to follow you and believe in it. But also, I think I'm super fair. 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. 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. 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. So 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 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 the 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, consolidator, 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, cheers to that Tom, Australian vintage CEO Tom Dussordel. [Music]