Hard Rock Cafe wasn't interested in Star Casinos, it turns out
plus: NZ earnings, Chanel, and more
NZ
Earnings cont. — Napier Port (NPH) had a very good result — 1H EBITDA +$27.4mn and revenue +10% to $70.6mn…pretty good innings though take note of container volumes falling 17.3% …well done to the co for doing buybacks too (more NZ companies need to do this — noting Sky TV continues to do theirs, as does the NZ Rural Land co — it is a superior way to return capital). Good read-through to other ports and also our fav, Mainfreight…
Meh result for ARG — net income +3.3% but $111.7mn revaluation loss … office property is still not hot property which I think reflects the continued shift to “work from home” — whether you like it or not the major big boys with multi-billion dollar valuations allow it — the world has changed since COVID and this is the realpolitik of it all … the old 9-5 formula does not work as it used to (questionable if it ever did work — my own observations are that many people act as ‘heroes’ pulling long hours but are not very efficient…). Talked to a major CBD property owner recently and she said that she didn’t expect office occupancies to go back to pre-COVID levels for “at least” 3 years and mixed-use is probably the way forward…
RBNZ — Still playing hold ‘em — no change. Expecting more downside to housing…
Charts — BOURDEUX — going down ?
Watches - Past the peak? (note that Richemont (CFR) recently reported a drop in sales in their watch ateliers…)
Aus
Droneshield received a +$5.7mn contract from the US govt for its C-
UxS (Counter-UxS) systems…still like this stock and see more movement in it given ongoing tensions globally… on a broader level I think globalization seems to be waning as the bifurcation of the US and allies and Russia/China and allies becomes more apparent.
Hard Rock Cafe never approached Star Entertainment, apparently? Per the AFR:
A Brisbane developer with links to the former Hard Rock Cafe in Surfers Paradise is the businessman who claimed to represent the entertainment giant in its discussions with Star Entertainment, and says he has “long-standing” and “confidential” arrangements with the group.
Patrick Farrugia made those comments after Hard Rock International, the Florida-based hospitality giant, distanced itself from any proposal for Star and said it was considering taking legal action.
This is funny, I guess — you could, in theory, represent yourself as, I don’t know — the New Zealand representative of Nintendo Inc, and say that Nintendo was interested in buying the assets of Sky City. Of course — eventually this bid will fail because you are not in fact, the representative of Nintendo Inc, and actually, Nintendo Inc does not even have a New Zealand branch (much like Hard Rock Cafe doesn’t have a “Pacific” branch). In the short term you might spike the stock price in the target company, in the long term — I don’t know — you look like an idiot?
Of course, you could say you have “confidential” arrangements Nintendo that You Can’t Disclose, so when they deny any interest, you can say — hey, they can’t talk about it! It’s confidential! Need to know basis!
This is basically what is happening with Star and per Hard Rock Cafe, they might take legal action against Farrugia:
Our brand is built on a legacy of integrity, excellence, and a commitment to our guests, partners, and team members worldwide.
Any misuse of the Hard Rock name in unauthorised business dealings is taken very seriously. We are currently investigating this matter and will pursue all necessary legal actions to protect our brand and reputation.
We urge stakeholders and the public to rely only on official communications from Hard Rock International for accurate information regarding our business activities and partnerships.
I don’t know. Star is trading back in the toilet. Hard Rock Cafe aren’t buying it. Etc.
Chanel is buying more property
The fashion house (still privately owned!) is planning on increasing its retail footprint +50% (recently the house acquired property in both Fifth Avenue in NY and Avenue Montaigne in Paris). This follows LVMH spending +€2.5bn on property last year and Kering buying a €1.3bn block of property from Blackstone in Milan. I think this reflects the experiential aspect of fashion and retail (look at the flop of Farfetch and the ongoing headache of Yoox/Net-a-Porter) — people want to shop, but they want to buy their luxury goods in store and have the whole experience. I think Chanel’s last few collections post-Kaiser Karl are pretty weak, but the brand’s loyal followers disagree — revenue was $19.7bn last year, up 16% against 2022 on a like-for-like basis, while operating profits rose 10.9% to $6.4bn. I wouldn’t be getting excited about a merger or sale of Chanel anytime soon — though I’m sure Arnault would love it.
Speaking of Kering — Still think this is well undervalued at 13x earnings — it is being priced like a discount shoe retailer and not like a leading luxury house. Yes, Gucci has been weak but early sales of Sabato’s collections are strong, according to buyers and retailers. Remember, was trading at +600 Euros per share not that long ago … now you can buy it for 333 Euros… same brands, same houses, same property footprint…
A new investment idea… Wise
I use Wise to send and receive money and frankly, it is superior to other methods. It is far cheaper to use than the banks and it is fast, efficient and maintains accounts in multiple currencies. Years ago the banks had a stranglehold on this industry and charged through the roof (they still charge through the roof in NZ). It ticked a few of my boxes — i) listed in the UK, which has equities that are trading on a very historically cheap basis relative to the S&P 500 and ii) it has a similar set of “lollapalooza”-like traits to two of my favourite “toll booths” — Visa and Mastercard. People need to use it to transfer their money, they are going to use it because it is the cheapest, it earns a “royalty” every time somebody uses it. So we did some digging.
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