the call: Wednesday 24 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 Dusseldorg. 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 warm welcome to the call 10 stocks picked by you to expert guests over 60 minutes. I'm Juliette Sali and great to have a Wednesday panel with us Andrew Waland from DP Wealth Advisory in sunny to warm be Henry Jennings from Marcus today who's in the big smoke this morning this afternoon. I am welcome gentlemen should be a fun hour we'll kick it off with a stock that's probably not on either of your radars given the age of your children but the stock of the day today is baby bunting. Now it's cut its profit guidance for 2026 amid the higher cost of living expecting net profit of around 16 million to 17 million dollars that is after softer than expected trading in the fourth quarter really weighed on sales including a weaker demand here for prams take from that what you will we know the fertility rate is going down we had a downgrade from a fertility clinic as well fuel people are using their IVF services so all of this weighing through into baby bunting and we're seeing shares down by a whopping 11% today. All right Henry if you were in the market for a pram would you be looking at baby bunting? Well if I was in the market for a pram probably I would be I've yet to have the pleasure of being a grandparent so I'm a little bit out of the loop in this one but yes I mean it was a bit of a profit downgrade I can't see how anyone will be surprised given the economic headwinds that we've got at the moment lots of grumbling lots of people you know pulling back on retail spending etc. Weetness in prams cost safety also a falling basket size a part of the problem there and you know when interest rates go up people defer the family decision perhaps it's hardly a big surprise I must admit it's not the stock that pops up that regularly on my radar if you're going to go in retail I guess there's other stocks that you would go to first it's not like we're going to get a pita castello baby bun you know one for mum one for dad and one for the country I think at the moment it's one and done yeah maybe rather than three so not a stock that I would look at not a stock that I would be that interested in they are talking about the store the future network which is a bit of a bright spot and clearly you know if things improve and we did see that that retail the CPI number come in today which was better than anticipated I have to say maybe that's going to help the RBA keep rates on hold but you know there's a lot going on economically and I think people are struggling a little bit so not really that interested given the leverage to disposable income that children are right so I'm getting a void but if if you did have it would you would yourself probably not I probably hold it okay yeah I think I probably hold it it's you know the damage has been done with down 11% this this market is very fickle let's face it you know Wyistat was down 18% the other day it's down to up 12% today so you know it is very fickle and you know it's been pushed around by forces beyond my comprehension at the moment absolutely all right Andrew your view because I think apart from cost of living pressures a point that I made as well I mean people and Henry also said people having a few babies but a lot of people choosing to be child free as well all these partly about Juliet and how they see you and Henry I know Henry is dressed up for his court appearance which is exciting so relating to the question they rather than my poor attempted humor I really just think that people are pulling their heads in relating to spending and they're making some really really tough decisions including to your point Juliet not having kids and that we're getting a bit of a read through there obviously with baby bunting Henry and I looked at this around three years ago and it's pretty much halved over the since we've last looked at it and it's not just the share price that's halved but it's the return on equity their profit margin is down to just one percent I mean can you imagine trying to run a business where your profit margin is one percent you know all you're basically doing is just treating water there so on the basis of this current downgrade usually history will tell us that this isn't the final downgrade there's probably at least one more coming it's trading now on a p of nine so if we look at the broader market I think the markets are in 16 17 times and I'm certainly not trying to invoke anything with my next statement but if you look at barbecues galore these specialty retailers are under immense pressure at the moment so at best this is a hold and arguably it's a sell if you have a look at that chart and my comment before relating to another future potential downgrade rather the one saving grace Juliet I think is that it'll get to the point where someone will actually come and lob and offer for it you know whether the the private equity guys and girls whether they want to come and have a look at it but for the time being it's a tenuous hold at best do you know who is buying prams all the people that love their dogs around the area that I live in there you see people walking around pushing their dogs in prams and I'm always like trying to get out of everyone's way and then I realize it's a dog and I'm like oh my god I sort of cat in a pram the other day anyway no I'm getting into one but yeah okay um all right we're getting this but we do have good reason to go in here so you know I remember I have two minute gomas I'm guessing you probably don't have a baby bunting anyway that is you do have a baby bunting I learned something you're about to remember every day that I talked to you I'm gonna say that that's a that's a double hold their potentially arguably sellers Andrew said for him but not a stock that Henry is interested in there of course we talked a lot about the economic situation a lot of people in people choosing to have fewer kids or not having kids at all and Andrew also saying look when you've got a profit margin down to 1% not something that they would be interested in there all right let's get to the first five stocks of the show including gold ETFs we're going to look at GHLD versus MNRS from Rob and once us to look at both Challenger and Suncorp kind of in conjunction with each other so we can have a little bit of a longer chat on those two Tanner asked for West Pack and then another ETF because we have the ETF Whisperer we've got Betashae's Cloud computing ETF CLD D coming through from Leicester all right so let's get then into these gold ETFs and Rob says I don't own either GHLD or MNRS his thesis though is that gold will go up over time the US dollar will go down so Andrew will start with you which one of these ETFs would most likely give Rob a better return in this environment I can only choose these two can we go why don't you like but I think Rob wants to get an idea at least of what you think of those two and and and that's why we're here Juliet to answer the viewers questions so thanks very much and listen to such the people who are on the podcast as well a special shout out to you so might do briefly with gold but I'll leave Henry to do most of the gold because of course just like I do a little bit of our ETFs Henry is all over the gold piece he's even been to gold conferences that's how much Henry knows about gold I would suggest that in the short-term gold is going to remain under pressure as we've got a strong US dollar but to Rob's point longer term given the fiscal situation in which the US finds itself with that significant budget deficit then certainly gold will remain in favour so I might leave the gold commentary there and leave the rest of Henry relating to these two ETFs that have been put forward GHLD which is the hedged version of one of the oldest ETFs on the market GOLD which is the un-hedge version by hedging I'm talking about where the dollar is as opposed to MRNS which we can see there on the screen at the moment from Betashe's and that's the gold minus so really the question being asked is would you buy the physical gold because that's what GHLD does it's got a vault with controls gold building in a vault in London or do you actually want to own the underlying miners so I guess the benefit of owning the physical gold is you haven't got any cost blowouts or anything like that you got to worry about it's just simply what's happening with the gold price and because it's hedge you don't even have to worry about where the dollar's going it's just literally what's that underlying price of gold whereas if you're buying the miners then you've got added upside or downside subject to what these underlying companies that are held within the miners have they're going relating to controlling their costs have they going relating to extending mine life all that type of thing so from mine I'd probably own the physical gold ETF so whether it's GOLD or GHLD subject to your view of where the the Aussie dollar is going if I was to buy the underlying gold miners, I'd nearly be inclined to buy another name, a new mom to a Capricorn or whatever the case may be, an evolution, I'd be more inclined to do that rather than trying to buy the basket because you're going to, if you're buying the basket of the miners, you're trying to get more bang for your bucks, your maize will pick a name, but if you're just trying to get broader exposure to gold, I'd be more inclined to do either GLD or G-H-H-H-H-H-L-D. Well, okay, that's a GLD or G-H-L-D. What about you, Henry? Yeah, I think at the moment, we've seen the gold price come off quite significantly and I don't think that's going to change and I get the feeling it's going to test that 4,000 level again. It's certainly looking that way. The US dollar is bringing in money and we've seen the Federal Reserve Chief, Kevin Warsh, I really get used to saying that. It's so easy to slip into your own power, but Kevin Warsh has intimated that if you're inflation, it's the target, it's the enemy and he is going to do everything to get that down. Bear in mind, 63/4 of inflation in the US above the 2% target. So it's been there for a long time, 4% plus at the moment, that's going to come down with fuel prices. So gold is going to be under pressure. Now the reason people buy gold miners, of course, is they have leverage to the gold price and that is something significant. A lot of them don't hedge in the past, some did and some actually unwell in their hedge books at what looks now when you look at that chart at quite elevated prices at time. So gold companies are bought because they don't hedge. You want exposure to the metal and that's through miners. Now if you look at the ETF that you're looking at, miners MRNRS, then Newmont is 12%. So as Andrew suggests, maybe you're better off just buying some names that you like, whether that's Newmont, whether it's, you know, you look at other stocks here, Barric and Ego Eagle, of course, they're big parts of that as well, but Newmont is 12%. So given that gold is going to come off a little bit, I think, and it's going to test 4,000, I wouldn't be buying either just at the moment, but you do buy the miners for that leverage. You want them to be unhaged and the miners say to you, we don't hedge because we want to give investors that leverage to the gold price. And the gold price goes up to a 3%, the miners will go up 7, 8, 9, 10%. And you look at the chart, you know, over the last year, the ETF on the miners is up what 53%, whereas the gold price is not up that much. So that's where you get your bang for your buck. I wouldn't be buying either of them just at the moment. I think you need to be patient. At the moment, gold is under pressure and I can't see a catalyst really for that to change in the near term. So I think it's going to be a long winter of discontent or a summer solstice for the gold price at the moment. All right. That is what we're thinking with those two will sum up at the end, but getting onto stock number two, coming from Challenger. And this is actually working with the next two in conjunction. So Challenger and SunCorp. And this question comes to us from Anne. So she says she currently owns both Challenger and SunCorp. She's wondering if now is a good time to take some profits before the end of the financial year. So many thanks, she says, for those thoughts. Henry, start with you. Take profits from CGF or Sun. Well, obviously this is general advice only we can't talk to your specific situation. But yeah, the good questions, I guess Challenger and SunCorp, very, very different companies in some respect. SunCorp is now very much an insurance company. And we know, I guess, from our own personal experience, that insurance is probably one of the biggest expenses in the household. And you look at it, whether it's pet, life, health, car, home, content. And it's going up in cost, let's face it. So SunCorp is a much simpler business. Challenger is trying to become a simpler business as well. It has an outstanding agreement to merge its FDANTY Funds Management Business with Channel Capital, trying to shrink itself in some respects just to simplify the business structure, very much in the annuity business. And it's kind of still, there's been people that have tried to get into that business. But it's really still there, number one, and holding a big advantage there. It's had an almighty run. I would probably be trimming these kind of prices around, what is it, $9, $80 or something. I would just be trimming and maybe taking a little bit of profit of the trade. So trimming both? As far as SunCorp goes, SunCorp is probably in a slightly different basket. But as I say, that one is having sold the banking business. That one has changed somewhat. It is now just a plain insurance company. And insurers do relatively well, I guess, when one they can push rates up. And also there's no catastrophes, which is also good. And also when interest rates are on the higher side of things. So probably a hold in SunCorp. But I would probably be trimming just a little bit in Challenger Group at the moment. Right, so I'm going to put that down as an S because I don't have a T for trimming. What about you, Andrew? Yeah, look, and I note the 45% odd game that Challenger's had over the last 12 months. So certainly that's a positive for them. And the fact that around 74% of their portfolio is in fixed interest. So again, given where interest rates are at the moment. So the fact that you've got that Japanese life insurer coming on to the register as well, 19.9%. That's also a positive forward as well. But yeah, bottom line, I'd probably be to use the parlance trimming or, you know, bluntly selling. In the context of SunCorp, yeah, I understand that the question is linked, that they are two separate businesses and two separate areas. I guess the thing that I look at with insurance companies in general is they actually don't make money out of insurance. They actually make money out of holding your money and then waiting for you to make a claim. So as a consequence, it's, you know, what's the ability of these businesses to actually be sort of making some money. So from my point of view, I look at the return on equity of SunCorp and it's a 7% ROE relative to say QBU or IAG, which has got ROE's return on equity of between 14 and 18%. So it's actually quite a weak ROE. They did incredibly well as they'll be a bank off to ANZ at top dollar. They are able to give shareholders good capital return and a great fully frank dividend. But what's the next steps for SunCorp? So I'd suggest it's a whole, it's trading their consensus valuation, but certainly it's nowhere near is interesting from insurance point of view relative to the other two. As I mentioned before, so it's a hold. And sorry, what was the challenge or a hold as well? So. So for challenge, okay, double sell. All right. So just going to add just one interesting thing. I guess, you know, when we look at companies that could benefit significantly from AI, you would have to say that if you're an actually working for an insurance company, the amount of data that's out there, the amount of analysis by AI is going to be quite stunning in terms of the way they can cut costs and the way they can simplify businesses and make better decisions in terms of who they ensure who they don't and what sort of rates are. So they could well be quite a beneficiary of AI, QBE, IAG and SunCorp have all done very, very well. Higher interest rates obviously help them as we've talked about, but AI could be that kind of catalyst for cost cutting that kicks them a bit higher. All right. Good one. 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? 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. Let's get into Westpac. Then one of the big four-tanner asking for this one, no huge question in terms of what he wants asked. But we have been seeing, I guess, Henry at least to start the year. It was certainly the story of banks out of favour, whether or not that switch is going into all this reporting season. What's your view on Westpac? They're all pretty much the same aren't they? They all make a huge amount of money. They're all very important parts of our lives. And there is a kind of a packing order. And we've seen that packing order CBA in there, probably Westpac and ANZ with its past, Mr. Meeners coming in last. The problem for all the banks, I guess, is that they're pretty much building societies on steroids to some extent and very much geared up to the housing market, which we know both anecdotally and through, I guess, the constant bombardment in the media that housing is under pressure. And that means that there is less activity. And although prices are down, people don't tend to crystallise that or loss necessarily. They tend to stick and maybe renovate, which could be good for the likes of Westpac. But certainly, the banking business of lending money on homes and given that we've got these changes coming through from the budget with negative gearing and CGT and self-managed superphones, etc. There is the rivers of gold that have been the mortgage-based business for the Big Four Banks has, I guess, dried up. Well, I wouldn't say dried up, but it's drying up a little bit. It's cold. It's certainly it's gone a little colder. So I think it's hard to mount a good argument for buying the banks. However, in a defensive market, and we've seen this time and time again, because of the nature of the Australian Stock Exchange and the ASX200, the banks are such a big part of it. If you put money into the ASX8 ETFs, you know, 25, 30% is going to go into the banks. So it does tend to push it up. There is probably a lot of shorts out there in the banking sector, you know, in relative terms, not in the same as, you know, Wystech terms or other terms in terms, you know, some of the big shorts. But certainly it is known as the Widow Maker Trade. And international head funds do love to short Australian banks because of their exposure to housing. So, you know, any good news does tend to blip them higher. But I think it's a sector that's probably going nowhere for the time being. It is defensive, it is facing headwinds, good yields, they'll keep making profits. AI is going to help them. But, you know, I think at the moment the housing market is just going to weigh on them, starting to kick a lot higher. So it's a whole. Hold, yeah. Andrew. Yeah, it's a Henry's point. You know, that passive money will absolutely hold the banks up. But I guess I sort of also look at the deteriorating housing market. I was at a, a NAB presentation last week, the week before, and spoke about NAB cutting back their housing growth forecast from 9% growth in housing prices to minus 2%. And so if people aren't feeling that wealth affected, their feeling is those things are going sideways, they're going to put their hand in their pocket. They're not going to be borrowing as much. And that will certainly steady them up. Around 1.1% of Westpac's loans are impaired. So in other words, 98.9% or not. But that number is trending upwards. They're nim, their net interest margins holding it at about 1.9%, which is not too bad. But again, if you consider that they really need that leverage to try and drive that growth in their business. I guess at best, I think this will be a hold. And the reason I'm suggesting it's a hold is institutional investors from offshore, who want Asian exposure, but are still potentially concerned about the geopolitical concerns or risks of investing in places like China, are still buying in Australia. I was at a conference recently where they spoke about buying banks like Hongwelfers like, but it's like they treat it like water. It's just so liquid they can get in and out of any particular position. Westpac's the third largest company on the ASX. So I think that will be a positive. It would be a remiss of me not to mention the ETF in VB, which in essence buys all the banks. So if you're trying to work out which is the better bank and Henry's right, they're all relatively the same. It buys the big four banks plus McCwory plus Bendigo plus B.O.Q. So that might be another way to play it. But I think if you think banking is the place to be, but I think banking in general is a hold. All right, M.V.B. the Vanneck Australian Banks ETF. Let's then stick on that movement of stocks to ETFs and do stocking our five, which is actually an ETF. B.D. She is cloud computing ETF. CLDD, which comes to us from Leicester. So coming through on that topic of what we were talking about with the insurers and AI. CLDD, you could say, has been a standout of some of this AI and cloud infrastructure beneficiaries on the ASX. Is it still a good investment case, Andrew? Well, the premise being it was a good investment case to begin with, Juliet. If you look at the last month, up 21%. Well, then, but if we sort of zoom back and we look at it the last five years, it's sorry, last year, rather, it's down 5%. In an environment where some of these tech names have just been going ballistic. And if we zoom all the way back, like you can see on the chart there at the moment, it's up 0.42% per annum for the last five years. So with respect, that's a bit pedestrian. And it's funds under management. It's only got about 38 min funds under management. For those who are wondering what they do, I mean, the name sort of describes it, but they get the majority, companies in there get the majority of their revenue from cloud computing. And some of the names include digital ocean snowflake, data dog. I have to say that's one of my favourite ones. As in just from a name point of view, I have no idea what data dog does. I just thought the name was pretty cool. So I think the market's trying to sort of tell us something here. I'd be sort of more inclined, you know, to be sort of looking at that sort of broader technology space or the energy space. You know, the picks in the shovel, so to speak. I'm not super interested in this one at all. So I would suggest it's a sell. All right, what about you, Henry? It's been pretty volatile, hasn't it? And I guess this is another one of those ETFs that is kind of marketing over substance. You know, they pick a bunch of stocks. They put a cool name on it. They put a nice tag on it, cloud computing. Everyone gets really excited. But as Andrew says, you know, its performance has been not that flash in this space. You know, over the last year, 5.2% down. It has had a pretty good one month and pretty good six months. Clearly, you know, there's a lot of volatility at play here. And we've seen that with stocks in the tech space just across the board. I mean, career, 10% up, 10% down. So it is kind of the 38 million in it tells you something that it really doesn't do what it does. I have no idea like Andrew, what Dada Dog does. But as he says, it is a cool name. I mean, they talk about it. The bit of shares people talk about it as pure play exposure. You know, you have to meet a minimum threshold of revenue from cloud computing services. But you think, you know, if you're going to invest in cloud computing, you would think that Amazon would be kind of up there with AWS, rather than Dada Dog or Snowflake or Z-Scaler. You know, it's a Z-Scaler. So, you know, digital ocean holdings is their biggest holding at 6.8%. It really is not for me. I think there's probably better ways to play. And if you want to invest in Dada's, you know, in the cloud, go with the big boys. You can just go single stock, Amazon, AWS. That's the biggest cloud provider around. So we're going to talk about cloud a bit more in a minute. I think in that sense, it is probably so. And you know what, I'm so sorry, Lester, actually forgot to read your question. I got so excited about seeing what these guys had said. But he said he's held it for four and a half years. He's been very patient. It was a fantastic thematic knot with standing the recent AI trend, traded in a narrow name. Got some nice names and it's top 10 holdings. As we said, funds on the management about 40 million. Never got traction, no wonder. And only once has the share price been above the purchase price. So actually, the question was, is it a dog to dispose of leading up into the end of financial year? Which I'm guessing is, yes, you both have, both at a sell. Well, I guess the problem, Lester, and this goes to the harder things, especially at the moment, is buy and hold for five years. You know, you've done pretty badly in this one. But if you've been in it for the last three months, you've done very well. So as always, with the markets as in comedy, timing is everything. Sorry, I like to support them. I don't encourage you. Please don't encourage me. Oh, I'm sorry. That is an old joke, couldn't resist. But yeah, Lester, that's the problem timing is everything. You know, those names, you've obviously been a patient man for a half years. You've seen it up, you've seen it down. It's been better than it has been. I would probably look at it and go, you know what? There's probably better ways to play this theme. You could be absolutely bang on with the theme. You've just picked a basket of stocks that has beta shares have provided for you, which really haven't been the right basket. All right. Well, Lester says, love the show. So thank you, Lester. And thanks for watching. Let's sum up then the first five stocks of the day with the gold ETFs, G, H, L, D versus M in RS, both my guests saying that G, H, L, D, or as Andrea also put you could be looking at G, O, L, D as well, better to have exposure here to physical gold, which actually has some gold in a vault in London. Some learn something new on this show every day versus owning the M in RS, ETF, because if you do want to own them, miners, why don't you just get into some of the stocks and you pointed out to Newmont to Capricorn, Henry also put out there a thought of Barric as well, given that Newmont is 12% of that M in RS ETF. Then we looked at Challenger and SunCorp with Anne and it was a sell both for Challenger or Trim as Henry said. But a bit of a different story with SunCorp, and particularly in this interest rate environment, when the insurers are going to look a little bit more favourable, unless we of course have more major catastrophes, but solid business. Andrea though did point out that it's got a weak RWE, and so what is the next step, but it was a hold for both for SunCorp. WestPak, the Widowmaker trade says Henry, but both are hold also given, of course, the exposure that we all have to the banks through our Super, through In-Store investors as well. Andrea pointing out that he's seen quite a few In-Store investors from offshore that might have a few risks in relation to investing in emerging markets that are buying into Australia and they like some of the banks, and of course it's passive money that will hold up long term. they're also pointing out that you could just buy into the ETFs, the ETF rather that's in all the big four, which is MVB. And then speaking of ETFs, a sell both for CLDD, Henry saying, why wouldn't you just get into Amazon instead? Less than 40 million in funds under management. Yes, it's done well. On one month, it hasn't done well as we looked at over the year. And also not that patchy or quite patchy, I should say. Over five years, as Andrew said, a bit pedestrian. So we are avoiding that one, a sell for CLDD. Well, the call is tracking our very own high conviction fund, which is picked by our investment committee and the latest episode of the committee meeting is available for you to watch at osbiz.com. Let's check in with the portfolio update and going into June, the committee leaving the level of cash unchanged around 8% of the portfolio. Meanwhile, two stocks are out of the portfolio of San Tol Sanjudo Capital. Instead, the panel added energy one and seisminder. And you can of course watch the latest episodes. He more of Henry Jennings and get the reasoning behind these investment decisions. The June episode is on osbiz.com.au with the drop-down menu the investment committee. So far, the fund up 30.82% on a cumulative return basis since its inception more than four years ago on the 1st of March 2022. So keep sending in your requests. Keep the call switched on to see which stocks are committee. We'll be looking at next and really thank you for those thoughtful questions and huge apologies to Leicester that I didn't read your question until the end. But I did get to it. We do really appreciate when you put the time in with the stocks that you want mentioned on the call. For more than 50 years, he's been guarding Australians, been 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. Re-rated our economic growth forecast for the end of this year down to 1.6%. Discipline was mentioned 106 times in the recent investor day presentation. So after we just look at the share price, I think how could I have missed this, but the thing is this is not the same company from all over the world. Watch live on osbiz Tuesdays 1pm or catch up on demand and subscribe to the Switzerland newsletter free. Visit switzer.com.au All right, halfway in this episode of the call we've got Henry Jennings from Marcus today. Andrew Wailen joining us from DP World Advisory in to Wumba stocks six to ten megaport MP1 leads us to about that super retail SUV from Rem, Jennings plus group GNP from Oscar, something cross electrical SXE from Robin and Mayfield group, which was Henry's pick MYG. So kicking it off here with Megaport, which Lee has asked no question from Lee, but just wanting to get an outlook on Megaport Henry. Well, it's done Megawill, isn't it? Let's face it. I keep laughing at your jokes. I know I'm sorry. Well, Lee's something. Carregi. There's a check in the post. As far as Megaport goes, it's kind of rare, isn't it, that the company raises 830 million bucks from a pro rider rights issue at $14.30 and then just goes stratospheric. So it's obviously doing something right and it is doing something right. It is moving into what they call the neocloud. And this is a term that you're going to hear a little bit more of going forward. And it is basically the ability of companies to rent out their computing power. So rather than build your own stack of compute, you actually just rent out what you've got to different companies and they can buy it by a bit of rent-vesting in the computing world. A bit of rent-vesting. So yeah, I mean, this one, they're building more, the GPU pull build out was the big attraction and they're certainly getting into this. And the fact that they've got so many, I guess, Dolisenter connections going on has really been pretty good analysts love this one. Even before this capital raise, which is kind of turbocharged the business, the analysts community had much, much higher price targets on it and they still have following this capital raise. So it looks pretty good to be honest. It has run a little bit hard for my money. I'd love to see a bit of a pullback. I know we probably won't get it, but strange things have happened. We have seen a bit of a pullback in some of those chip stocks, some of those Korean-focused stocks, Samsung, SK, Hynix, etc. So there are a few wobbles out there. So it would be good to kind of just set yourself a price where you could be temptedly to go back into the stock. But it has run pretty hard. Usually when you get a rights issue or some sort of capital raise, at some stage during that process, it kind of dips towards that price. And those people that are taking up that stock tend to get a little panicky. But here it is at 20 bucks. And the rights price was $14.30. I think that's wishful thinking if you think it'll get back there. But if it got back to 16 bucks, I would certainly be a strong, strong buyer. And probably, I guess, nimble away as it comes back. I think this is certainly one of the winners from the AI boom in Australia at the moment. It's, you know, unlike next DC, which seems to get punished for the money that it raises, because it raises huge dollars to the build new dialis center. These guys with this sort of neo-cloud push out have been very much rewarded by the market. So certainly one for you. Watch this. Buy on any price weakness, I think. Buy on a dip. All right. Andrew. Yeah, I tend to agree. I think certainly if you could get it on a dip, but to Henry's well-made point, you know, you've got four cars earnings per share, growth of 200%. And it's really hard to find quality tech companies in Australia. So when investors were given that opportunity at $14, it's no great surprise to see them wipe that up. And as you know, Julia, one of my favourite measures is are the insiders buying? Are the people who are in their day to day or the governance team? Are they buying shares? And they are, but the cheer and the CEO is adding to their holdings over the last four months. I think on a momentum basis, it's a buy, but I absolutely share Henry's concern that it's just gone ballistic. Consensus is around $22. So, you know, there may be a small margin of safety there buying at these levels if you trust consensus valuation. But ideally, you would be waiting for a pullback. And again, it's probably going to be more of a macro geopolitical pullback rather than a company specific pullback. And that's probably the time to get stuck into it. So I'd say it's a technical buy, but I would suggest that on a valuation basis, if you could be sort of getting it in a lot of $20, that's probably where I'd be suggesting that you start nibbling away. All right. Well, I sat in a den yesterday. I wanted to grab the bell from Cauchy's desk in case we had a double buy. And I forgot, but I'm just going to pretend because I think that was a double buy there, even though it's on the dips. Yeah. I'm going to call out a double buy. First one of the of the show. And you can just pretend that I'm ringing a bell. All right. Going into super retail group from REM. So long viewed as a pretty good retailer, but consumer spending Henry's still under pressure. We touched about this earlier. So is there any confidence that they can deliver earnings growth here? Well, they've got a pretty ambitious store rollout policy and they're starting to look in smaller areas as well in terms of rebel, unboding camping and fishing. So they've got some good businesses, super auto, BCF. And of course, rebel is their main thing. All of which, yes, to some extent, a discretionary. But BCF, if people's wallets are a little bit lighter, they would look at more camping. And certainly when you look at the amount of gear that people have on their trucks, etc. Or the gear, no idea. Or their boats, etc. All gear and no idea. It's obviously a growth sector of the market. There's plenty of competition in that sector as well, but they do face headwinds, I guess, from lower consumer confidence, lower consumer spending. But buying a pair of football boots or a football or something for the kids, you know, they should get a bit of a world cup boost as well. So that will help them. And there are trying to rationalise things, transform the business, use AI more in their business. So, you know, it's suffered and it has got some corporate governance issues as well, which have surfaced from time to time. Not quite in the same league as Ystec, but certainly there has been some issues. I'd say here, you know, it's had a pretty good run off the sort of 12-butt level up to 13 bucks. I would probably be a bit of a holder rather than a buyer here. There's some pluses and there's some minuses. And I think at the moment, probably they kind of cancel each other out. So I think I'd be a hold for now around these sort of levels. All right. Andrew, you're a camper. I was about to say, Rem, thank you for thinking that Henry and I would be sort of able to speak to camping, but I can. I cannot. I cannot. I cannot. All stars not five stars. Sorry, five stars not all stars. Yeah, okay. Are you a glamper? Do you? I'm so angry. Not. I can't encames. I'm not camping. I mean, I have done it, but no. I'm not not getting involved in camping. No, thanks. All right. What do you think about super retail? a good show as a far show. I agree with Henry aspirationally. Thank you for laughing at my age, Juliet, that 790 stores currently aiming for 900 by 2031. You're being asked to pay 13 times earnings on forecast earnings per share growth of around 7% per annum. ROE is pretty strong for a retailer, 16%. And again, not an amazing margin, but for retail 5% margin in this environment, that's certainly not too bad. And I do like the fact Henry referenced it briefly relating to that loyalty members club and the ability for super cheap to be using AI. They've got 13 million members. So basically, because how many we got people in Australia, but 28 million? So one and two people in Australia are members of their retail loyalty group. So there's certainly huge opportunity to be leveraging off that. How they do that and how they execute across that. That's another story. But from a valuation point of view, I'd say it's probably a hold, but if you could sort of be picking it back up a little bit cheaper, it would be a buy if they can execute against it, but at these levels, it's a hold. That sounds extraordinary. Hi, doesn't it? One in two, almost as if some people might have given two email addresses and they're the one person. Who would have thought that would happen? All right, let's go in to stock number eight, GNS+ group, GNP from OSCA. Okay, so cited as a beneficiary here of the electrification and grid upgrade investment cycle. How much Andrew could that already be factored in? What could drive their next leg of growth here, do you think? A bit of a thing coming to these next three that are about to cover. I hadn't come across this one as we spoke about, or we have spoken about previously, one of the benefits of doing the call apart from you laughing at my jokes and Henry's poor jokes is I get to actually come across businesses that haven't been on my radar, and this is but one of them. So infrastructure services, power generation and communications, they recently did a placement at $9.25, another one where it doesn't really seem to have harmed the share price. Certainly that upgrade and guidance that they provided in mid May was equally helpful for them. You're being asked to pay 20 times earnings for a business that's forecast to grow its earnings per share by around 81% next year and consensus valuation on this one's around $12. So I'd actually have this one as a buy, Juliet. Cool, wow, okay. Can't come across it and now you want to buy it, what about you? I have come across it and you may have to get the bell out. Oh, some of my brinkosh is bellian. Brinkosh is bellian. Areas, it has recently done a lot of. He's literally doing it. This is exciting. Sorry, go. There he is. It has done a pretty big acquisition recently, $325 million, which kind of doubles its business really. As with all acquisitions, execution is key and it's easy to buy something but it's quite another thing to integrate it and leverage that buy. So it is a good deal. The market likes to deal. It has raised money as Andrew says and the market rewarded it for raising money. You look at that thousand percent over the last five years. That is a pretty good business. You've got there Mr. Riches and he is a founder led, well this one is a founder led company to some extent. Still the majority shareholder there. So that is good. But it is, you know, in the words of Sir Humphrey Appleton, it is a courageous move, a minister, to buy something this big and it will take a little time for things to settle. But I think long term, this is a good business which is leveraging the electrification, the upgrade of the grid going on that we need. You know, it's all very well building renewable energy but ultimately you still got to connect it to the grid. So you can build it wherever you like and they get a lot of sun but you got to connect it. So you know, these guys are going to do what out of that. So I like this one. I think it's run hard again. I think it's a buy. All right. Double buy, second double buy of the. Ring the bell, I can see Mario's out there. He's just going to ring it himself. Oh no, don't worry. You can bring it in at the end of the show. All right. Bring it in. Slide TV. Come on. Bring it in. Bring it in. Bring it in. Bring it in. Tell her how it is. Bring it in. Come and jump between us and ring the bell. I think do it. Do you have to ring it? You're in here. Okay. Woo. Okay. Double buy. Jesus Christ. The new stock is jumping here. You didn't have your headphones in too loud there. Bringing props into the call. This is what happens when Andrew goes on holidays. Everything goes awry. All right. Let's go into stock number nine. Southern Cross electrical asked from Robin. She says, "We own shares here. They're doing a share purchase share price placement for $3.85. Do you think it's worth buying into this one, Henry?" Well, share purchase plans are. Well, they're always worth buying into if the stock is above the share purchase plan price because you're getting the stock effectively to discount. Now obviously there are risks involved with an SPP. It has done very well and I do like the stock. It's involved in the electrification. Same as we talked about in the previous stock GNP. Dada fit out. Dada center fit out. It has been doing very, very well. Lots of contracts coming from these guys. Now with all SPPs, you know, you've got a few options. You can just apply for the the share purchase plan at $3.85 and you can take your potluck and with the stock at $1 above it, just about you're going to get scaled back. Sometimes the companies do scale up the SPP. So you might be lucky and you might get more than you hope for. The other option of course is you can sell some of your existing shares to pay for the ones that you're going to get at a discount and try and play the arbitrage there and try and take the dollar. The risk there of course is that you don't get as many shares in the SPP because it's such a free money round effectively and as a result you end up with less shares than when you start it with, although you've got more profit. So that is a concern. You can just do nothing. You just let it go through to the keeper, which is probably I'd say the worst of all solutions. You're best to do something. If you like the company and you're getting the offer to buy a cheaper price, go for it. Well, I would say as well as keep an eye on the timetable for SPPs and make sure that you kind of leave it till the last possible moment markets are moving around quite considerably on a daily basis. This one is no exception in terms of volatility. So, you know, if you're going to put your check in, do you still do checks? I don't know, but if you put your money in, you are effectively lost control of that money until the SPP allocation is announced. So you've got to be careful because you're out of your money, you've got market risk, if the stock drops to three bucks, then you look a bit of a clown. So leave it as late as you possibly can and then either apply or not apply depending on the share price. But just bear in mind there is an arbitrage opportunity. It does crystallise a tax issue, of course. So, I'd be aware of that, but if you are sure to funds, you need to raise some money. It is a valid way of doing it. Sell some shares and then apply on the SPP. What doesn't crystallise a tax issue these days? Anyway, this is not a political programme just yet. Andrew, am I going to ring the bell again? Thank you, Marjorie. I just said that just to see you reacting to someone. So two main thoughts. So the first one, just talking about SPP share purchase plans, it's a form of dollar cost averaging. Like if the share price is going up and you have the opportunity to buy more at a discounted price and with no brokerage, why wouldn't you do that? If you are a firm believer in the business and we use dollar cost averaging here a lot in the business, in our business. And so this is us, it's a core tenant or a fundamental part of wealth creation. So SPPs, as long as you're a firm believer in the business, big fan of SPPs, that's sort of the broad sweeping statement. If we then talk about SKE itself, Henry and I looked at this back in May 2023 and I'm pretty sure Henry became a fan of it after that without trying to speak for him. And it's gone up five times since we've looked at it. So it's been, it has been and continues to be a great business, 26% return and shareholder funds, 6% margin, even though the P's are in 22 times, you've got four cost earnings per share, growth of around 34%. Ticks all the right boxes relating to areas that they're going to be involved in, around 40% of their clients are what they call blue chip and have been on the books for at least seven years. So there's lots to like about this consensus is about five bucks. So it's a buy. All right, I'm a bit worried how loud this is. No, bring it, ring it. Get into it. Yeah, just don't want to get any nasty like that hurt my ears when I was listening on the podcast. So I can turn that hearing out. But I think that did get so so I don't have to worry about it. All right, let's go into the final stock of the day, which is Mayfield Group, which was actually Henry's pick and had I not asked you first last time I would ask you first now, but I might let you have the final word on this one and go to Andrew just in the interest of fairness. Had you heard of this one before Henry picked it and what do you think Andrew? I had heard of it, but it not haven't looked at it for quite a period of time and I'm pleased Henry did raise it because it is it's gone really well. In fact, we've seen a moment how well it's gone up around. 200, there we go, up around 200%. So they're involved in the manufacturing and maintenance of electrical equipment. One of the reasons that they're doing well right now, not initially, you know, it's just the business has been performing well, but they've recently been added to the all laws. So the all laws are still a thing, remembering that the ISXS and P200 has been around for around 20 odd years now, 25 years. Whereas back in the day, it just used to be all laws, the all laws is now sort of almost the smaller companies. And so it's now been added to the all laws. So you're going to get some passive buying support that is going to support that share price. So again, same type of thing, electrification, decarbonisation, data centers, that the Matic, they are going to lean into that, 7,000 to 7 ROE. So you're not as strong as SKE, but a similar type of margin, consensus is around three bucks. So out of the three that we've mentioned, I mean, I'm happy to have this as a bar as well, but out of the three, it's probably not number one. I'd say probably SKE is number one and a strong second would be GNP, but certainly nothing wrong with this at all. And I'm happy to support it as a bar. But this is Henry. So I'll let him speak to it. Hmm, Henry. First of all, I have to say that we were led astray by the viewers question in SXE, because the SPP is being done up four bucks, not $3.85. So I just checked that. I did think that it was done up four bucks, but the question was, do you buy it 385 and the SPP? So if there's another one out there and you get it 385, go for your life. As far as Mayfield goes, it's, what can you say? I mean, it's done very, very well. It's still a small cap, 400 million bucks. It does have a majority shareholder, Lindsay Phillips, who's the non-exec chair, and he has got a pile of shares, and he did recently sell some, which I guess does spook the market a little bit. He's still got, I think it's 30.8 million shares left. So he's still got 100 million bucks in this one. And you'd have to say that execution has been good. They have got very good earnings growth, a strong balance sheet. They've got structural growth themes in terms of data centers, electrification, mining infrastructure, renewable energy, all those buzzwords. It does look pretty good. I have to say, and I'm putting aside the fact that Lindsay has sold some of his shares because he still has 100 million dollar reasons to stay there. I like this one. I recently had a chat to one of the analysts that I really respect in the tech sector, Jonathan Higgins, from Unify Capital Partners. And this is certainly one of his favourites. Again, it has run hard. The good have done very well recently. The bad have been absolutely mulled. This one I'd really like to buy it, but I'm really kind of a buyer around three bucks, which is not far from where it is in the big scheme of things. But it has run hard and it would be good to see a little bit of a pullback volume and liquidity is a smidge of an issue with this one because it does. I wouldn't say it trades by appointment, but it does have, it is sporadic. There's only 36,000 shares traded today. So bear that in mind. It's not so much that retail investors can't get set. That's not always the problem with these, as Andrew calls them, lobster pots that you can get in and get out. What is the problem? Is if somebody big who's a shareholder wants to readjust their portfolio or rebalance and wants to sell mayfield or buy may field, then that can move the share price disproportionately to say, you know, if you want to buy a million CBA shares, that's a lot easier than buying a million mayfield shares. So just bear that in mind, you might have to suffer a little bit of volatility. But below three bucks, this is a buy. I'm looking at the bell. I was just waiting if I'm reading the bell for the fourth time today. Yeah, ring the bell. Over the shoulder. I don't want it too close to the mic. We're going to set people. Henry, do Henry, do it. No, no, I'm already get carried away. I'm just, you know, I'm online for this show. I don't want to get in trouble. So we're just trying things out. But, um, ask for forgiveness rather than commission junior. That is correct. That is correct. I should do that. And then, and anyway, let's sum up because that, you know, might get a little bit of RSI from how much bell ringing I was doing there. So starting with a car, we'll do it. Megaport. It's loud. Megaport is a double buy from Lee. Henry saying doing mega well. They're doing something right. Of course, moving into the Neo cloud, somewhat of rent-vesting here out there, computer sector here. And Andrew also saying it's a technical buy, hard-to-find quality tech companies here in Australia. Now, it was a hold for super retail. But Henry pointed to their ambitious store rollout. We touched on whether or not we're campers. No, surprise. None of us really are a bit Henry a little bit. Henry is a little bit. Henry is a camper. Me and Andrew, we prefer five stars, not all the stars. Um, and Andrew said the ROE is pretty strong, but they do have that very strong loyal members club. GMP, we rang the bell again for genus plus. Maris has given me a weird look out there. It has done a big acquisition. It's up a thousand percent over five years. And Andrew, who hadn't actually come across it until today, is also very interested in it. SXE, we rang the bell again. Yes, if you buy it at a discount, but we did know that the share price placement may actually be a little bit higher than what Robin had indicated. But still, if you can get it around that price, looks really good. Just remember, you might have to crystallize some of those tax issues. And Andrew pointed to the fact that both the panelists have been looking at this since around May 2023, as well. And it's risen five times since then. And then may feel group, which was Henry's pick was a buy from both. A lot of volatility here. Henry's sweating to a lot of buzzwords talked about Jonathan Higgins from Unified Capital Partners. We had him on yesterday. One of his picks as well. And Andrew saying that at 17 percent ROE, the consensus as well around the three dollar level. But out of the three, the last three stocks that he picked, SXE would be his number one. Well, I hope you enjoyed that episode of the call. Let's see whether they're ringing the bell on the buy stays or whether I get sent to the naughty corner. But really enjoyed your time. Andrew and Henry. Pleasure. Thank you. All right. Have a great afternoon. Stay with Oswears for more views and news next. 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, 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 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 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 dollar 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 grape supply, how we utilize our wine. 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 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, a rising, petrol prices, a 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, there's always substories. You know, 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 mill 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, 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 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 Hoko Vino, somewhat the star of the turnaround story, how much of your successful future growth that Australian vintage requires, 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 or don't open bottles of wine often are influenced by the size and the volumetric nature of that drink. We don't want 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. There's 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'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. You know, 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 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 is 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. You know, 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 and yourself. But also we went looking for it. So Nadine lives on the northern beach as 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, you know, 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. You know, I think the challenge we have now is not a question of, you know, more exposure. It's about working with retailers to build destinations that service consumer shopping needs, right? 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. 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 one consumption. And you see an aisle of just wine bottles that all are the same except for their labels and price points and maybe a bit of regionality. 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 partners and went everywhere. LEMSECO has just been growing organically. You know, it's a good product because it's been made with just fresh lemon, concentrate and Prosecco. 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 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 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 Pocov 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 healthy aisle 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. Why and actually on total easing 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 Yeah, they just haven't been big enough to overcome the sheer volume of red wine that boomers drank for so many The boomers 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 Yeah, you know it doesn't have the 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 or a bit of a 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 would take them years of capital installations and 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 and 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 yeah 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 know I think Australia is producing too much wine now. I mean there was a the glut for so long We definitely are this I think I've heard numbers of nearly two billion liters of excess supply Mainly in red wine that's gonna 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 liters 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 utilize off that land So to pull that out is a big commitment to go right I don't no longer in this industry. So that is happening, you know That's the sad part of a of a structural Over supply when when consumers move away and it's predominantly in Shiraz and reds You know places like Barossa Valley you're reading in the press around Bordeaux. Yeah, 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 pinnacle grigio are going nowhere. Yeah, you know Saved long can shard and they go through this constant kind of up and down over the over the decades Pin and wire 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 shard and a 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 a and z and and UK and island You know 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. 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 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. Yes fun. It's colorful. 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 it. 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. Yeah, 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 Pocco Vino business in the US it's a game changer for our organization. So 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. Yeah, very hands-on So European and you yeah, I think look very passionate, you know I you've got to believe in what you're doing I think that's a big part of 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 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 organization 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 of 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 is a challenging role as well. What's the toughest lesson you think you've learned? In leadership Is 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 unirrefeatable data is sometimes the best leadership trait So I'm 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 on to things maybe a bit too long to the detriment of me and potentially those those ideas And this is 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 we're 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, we could be the benefit of what is coming in an industry dynamic. That, to me, is really compelling. 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. That's the bit that I keep looking to. 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 Düsseldorf.