I scream you scream but Unilever doesn’t scream for Ice Cream
Plus: Rakon watch day 104??
Rakon watch
$1.15 today and it has been a long, long time since there was an announcement to market. Surely the board has a duty to disclose what’s going on with the NBIO? What would mum and dad think?
Is the property bubble bursting?
Short term property speculators often remind me of the below video —
Anyway, a few things to note — headlines I’ve gathered as of late:
I don’t know, you guys, this doesn’t feel great!
Hold the phone — there are some property stocks we do like.
We still like the retirement operators (Oceania, Arvida, Ryman) because you get the cash flows associated with running them + the property revaluations (or devaluations). We still like datacentres (NextDC, Infratil) because we see AI + more data all needing a place to be stored. We are skewed towards “boring” industrial-type stocks because warehouses will always need to be used. We are repulsed by Du Val, etc. And obviously, there is Hong Kong and Shanghai Hotels limited, which is selling at about a quarter of its NAV and owns prime property across the world.
Talking about prime property
By now you all know I have a massive crush on Bernard Arnault. LVMH is maybe my favourite company. Hearing reports that LVMH is looking at buying the massive Bergdorf Goodman building in NY — he just bought a boatload of prime property in Paris — our dude Bernie has gone on a spree. As the source I got this from sez: “the only real prime property in the world is in NY, London, Paris and a bit of LA”. Preach.
I scream you scream but Unilever doesn’t scream for Ice Cream
Once upon a time you dressed so fine, sold ice-cream by the dime, didn’t youuuuu….
Once upon a time Ben and Jerry’s was the crown jewel in Unilever’s consumer-studded palace of things like “Dove soap” and “Hellman’s Mayonnaise”. The Ben & Jerry story is still a fantastic case study in how to build a rootsy brand from the ground up — it was started in Vermont in a converted gas station, the founders started doing “limited prosperity” way before it was “woke” (donating +7.5% of profits to the Ben and Jerry Foundation; paying a living wage to employees; paying suppliers fairly) and of course it did very well. When Häagen-Dazs came after them, the company responded with the now-famous “What’s the doughboy afraid of?” campaign (yes, that’s a hand-written sign, and one of the founders carrying it — no fancy marketing here; the campaign was in fact customer backed — years before Kickstarter was invented).
Anyway, eventually Unilever bought Ben and Jerry’s for $326mn in 2000 — it was a purchase that came with caveats — B&J wanted an independent board. That was probably smart — in my experience big corporations end up messing brands like this up — there are always overpaid idiots who come in with “better” ideas (see: CBS & poor Bill Paley, who only listened to “yes” men).
Plot twist — Unilever’s new CEO Hein Schumacher (ja, mein kaptain!) has decided to spin-off the entire ice-cream division — that includes Magnum, Klondike, etc. In total Unilver’s ice-cream business bought in €7.9bn last year and profit of €760mn — what’s it worth? In 2019 Nestle sold its US ice-cream business to Froneri for $4bn — turnover was $1.8bn; so 2x sales roughly. Same math applied — €16bn business? (ten percent operating margins ain’t bad for a consumer product). I’ll happily be a buyer of that business at the right price — Ben & Jerry’s has an incredibly strong brand value, as does Magnum and so on. J&J spun off their consumer products division, Kenvue, last year — trades at a v reasonable 22x earnings and has fallen 22% since listing. It’s not glamourous, I know, but it’s a way to buy pure-play consumer staples — Band-Aids, Listerine, etc. I’ve been watching it for a while — no view.
Bigger picture; is this really the right move for Unilever? When a CEO’s best ideas are to sell units, I get worried. The restructuring (ick!) comes after grumpy old Terry Smith’s attack on the company a couple of years ago (I love Terry Smith).
He also attacked Unilever's purpose-driven marketing, saying the company had "clearly lost the plot" in feeling like it "has to define the purpose of Hellmann's mayonnaise".
On Tuesday, Smith reiterated "we don’t know how well it (Hellmann's) would have grown without the (virtue signalling) 'purpose’", adding that "maybe Hellmann’s would be growing as fast or even faster without its ‘purpose'"
Well, yes. You don’t need to define the purpose of mayonnaise. You spread it. On the other hand, a “plan” that involves spinning off units creates what looks like short term shareholder value but does little in the long run.
God Bless Australia and Les Patterson
God bless tacky noveu-riche who make my skin crawl a little (I prefer my aristocrats to be repressed and wearing cardigan’s that go back to the Doomsday Book, thank you very much). Had to share this article about the billionaire founder of some online gambling casino with you. Link.
When he’s not flying around on a Bombardier 7500 emblazoned with his nickname Lee – funded with a multimillion-dollar loan from retailing billionaire Gerry Harvey – he’s riding around in a supercar or importing Lamborghini yachts. Lingerie-clad waitresses pour Dom Pérignon at a private club in his hometown, Perth. In Hong Kong, he’s on a shopping spree for rare Rolexes.
Oy vey! But here’s the kicker — you’re going to love this.
Escalante’s early life could not be further from how he lives today. He grew up playing World of Warcraft and by 23, after studying to be an actuary at Macquarie University, Escalante was running Christian software startup White Knight Games.
In one game released in 2005 – Timothy and Titus: Saints, Martyrs, Heroes – players collected “love”, “faith” and “hope”, rather than cash or weapons. “By … encouraging players to learn from the lives of Saint Timothy and Saint Titus, we believe we are able to put Christ and His message at the core of the players’ experience,”
I mean — less saintly indeed. It all makes me think of Sir Les Patterson, my favourite Australian and probably Australia’s greatest export:
Anyway — investors want his company to float, and I don’t think a gambling company is floating anytime soon. Look at the debacle of Star Casinos and over here, Sky City.
End of the Line for Dries
I’ve always loved Dries Van Noten — wonderful designer with an eye for subtlety and tailoring. He’s retiring after decades as very much a “designer’s designer”. Loved his Len Lye inspired collection…here’s to the OG…(the label is owned by Puig, btw, which also owns Charlotte Tilbury, etc, and is eyeing up an IPO later this year).
