Rob Millner's simple rule for investing success

Episode three of Success and More Interesting Stuff features Rob Millner, the patriarch of Washington H Soul Pattinson.

Soul Patts is the closest investment vehicle that Australia has to Warren Buffett’s Berkshire Hathaway.

And, like Berkshire Hathaway, Soul Patts has been an outstanding success. Rob is only the fourth family member to run the company in over 100 years and to date he has managed to multiply the share price 10 times and increase the dividend for the last 20 years.

Rob — and Soul Patts — take the long view, with a disciplined focus on fundamentals and proud attention to corporate governance.

"I've always had it at the back of my mind that I don't want to be the one that blows the place up," he says.

In this episode, Rob describes what it was like to take on great responsibility as a young man and how he thinks about succession planning these days.

He also shares his simple rule for buying cheap stocks and explains why so many investors fail to follow it. 

Edited transcript

Matthew Kidman

Welcome back to Success and More Interesting Stuff. Rob Millner carries a heavy load. He is only the fourth family member to run investment giant Washington H. Soul Pattinson in over 100 years.

He is acutely aware of the importance of his family and what they have built over many decades. So far, so good. Very good.

Since taking the reins as chairman in 1998, Millner has presided over a tenfold increase in the Soul Patts share price and 20 years of increased dividends. In fact, Soul Patts has the longest track record of increasing dividends on the ASX.

Millner succeeded his famous uncle, Jim Millner. Jim had been a prisoner of war in Singapore. Hardened by his experience, he went about changing the face of Soul Patts from a modest retail pharmacy business into an investment powerhouse.

In fact, by the time Jim had retired from the chairmanship, the business resembled a mini Berkshire Hathaway, with large investments in coal, building materials, listed investment companies and television.

Rob, despite spending his formative years on the family farm in Cowra, New South Wales, was picked as his successor.

After more than a decade working inside the investment empire, Rob took over as chairman and started to leave his own mark on the corporate icon.

He famously parlayed the group's television spectrum into telecommunications on the back of industry deregulation.

Not long after, he teamed up with David Teoh at TPG, and the pair went about growing a multi billion dollar internet business that delivered hefty rewards for Soul Patts shareholders.

More recently, Rob ticked off on another major acquisition and development for the company with a takeover of listed investment company Milton.

The Milton takeover is the next platform for growth as Soul Patts cements the company as the Berkshire Hathaway of the southern hemisphere.

I first met Rob in 2003 when we interviewed him and his uncle Jim for the book Masters of the Market. Hi Rob. Great to catch up after all these years.

Rob Millner

Good to see you.

Matthew Kidman

Yeah, it was a great time with your uncle Jim. Out of Woolwich or Greenwich?

Rob Millner

Woolwich.

Matthew Kidman

In the big sandstone home?

Rob Millner

Yeah.

Matthew Kidman

And I remember he positioned himself, now that he had this big house, and he sat in the kitchen by himself looking at his shares and reading stuff.

Rob Millner

He was a great man. He was one of a generation that went through the Depression and, as you said, prisoner of war and also Second World War.

They were hard and tough people that didn't suffer fools. And in those days, you could get on with business. If you didn't like someone, you'd sack them. It was a fact of life.

And the AGMs used to go for about 10 minutes. Well, his uncle, Fred Pattinson, who was the chairman before Jim, was the son of old Lewy Pattinson, who started Soul Patts. There have been three wonderful men before me, and I've just been lucky I've been able to fill their shoes.

Matthew Kidman

They left a terrific legacy, and no doubt you learned a lot off Jim. I remember sitting with him, and he wasn't too verbose in those days.

He was pretty limited on his words, but he had some pretty simple rules around investing. Always have a little bit of cash, always buy when things are bad, look after it and sell when things look expensive. It all sounds pretty simple but it's really hard to do.

When I look at your style and your annual reports and at your AGM, you keep articulating the same kind of message all these years later.

Rob Millner

It's a pretty simple rule. Always have cash. If you go back to the global financial crisis, most of your listeners all remember that period of time. We bought Macquarie Bank for $14, Commonwealth Bank for $27, 14 cents for TPG.

Matthew Kidman

14 cents.

Rob Millner

Yeah. Macquarie Bank is now $200. And Commonwealth Bank at $27, I think we worked out the other day that we've got more than $27 in dividends since that time out of Commonwealth Bank, and they're $110 or $112 or something.

Matthew Kidman

Amazing stuff.

Rob Millner

So you've got to be able to move, unfortunately, when others are suffering. If you've got cash, you can move pretty quickly.

Matthew Kidman

The few downturns I've ever seen, you'd think that everyone will buy when it's down, but they're always putting out their own fire in their own backyard, and they need the money. So it's interesting. Everyone says they've got cash, but it's not always there.

Rob Millner

And the recent period we've been in with the low interest rates has been a completely different period than any of us have ever experienced before.

Generally we've had interest rates, a lot of people, between eight or 10 or 12% or even higher. So if you are in some sort of trouble and you've got to pay that interest rate on top of what you're already going through, it makes it very difficult.

Matthew Kidman

Very difficult. Now we're going to go back first before we get all to the good stuff of today. You left school and you went and became a stockbroker. Were you good at that? Because it didn't last that long.

Rob Millner

The day after I did my last HSC, I started work with a company called E E Balltis and Co.

Matthew Kidman

They're not around any more.

Rob Millner

No, no. He was a Swiss guy who picked gold in those days. This is late 1968, early '69. And I started there, and I worked there for about 15 months and thoroughly enjoyed it because it was in the boom, the Poseidon-Tasminex boom. So there was plenty of action.

Matthew Kidman

And is that the biggest boom you've ever seen? Because a lot of people got rich off Poseidon. That's what people forget. It made a lot of millionaires.

Rob Millner

You've got to remember, going back in those days, there weren't the regulations that we have now. There was a lot of insider trading, and the geologists would ring up results.

And there was a lot of shenanigans going on, and you could virtually set the market price at five minutes to four every afternoon. People made a lot of money, but they made some wonderful discoveries in Tasminex and Poseidon.

Matthew Kidman

Sounds like cryptocurrencies these days.

Rob Millner

And that's what really started Soul Pattinson onto a new direction. As you mentioned in your preview, we virtually started as a pharmaceutical company.

And then in the late '50s, early '60s, Jim was invited to sit on the board of Australian Oil and Gas, which in those days was the biggest mining company in Australia, bigger than BHP.

And on that board was a guy called professor Eric Rudd, who was a geologist and regarded as probably one of the better geologists in Australia. And they flew all around Australia, plus New Guinea and Fiji.

And they put two and two together. There was going to be a mining boom. So Souls and the Millner family bought up a lot of Western Mining, Cleveland Tin, Emperor Mines, Peko-Wallsend. That was the real start of the next leg into the Souls empire.

Matthew Kidman

That flexibility of people running companies, you wouldn't get away with that today, if you're a little retail business or not little, but reasonably small in the big scheme of things. And all of a sudden you're investing in mining companies.

Rob Millner

Well, there's only a few of us. We're a bit of an exception. Wesfarmers is probably the same sort of company as we are. And I think, unfortunately, in this day and age, you get criticised if you're different.

A lot of people criticise us and Wesfarmers as well. Did they sell out of coal at the right time? Or have they done this, or have they done that? It's very easy for people to criticise, but both companies have probably outperformed nearly every other company on the market.

Matthew Kidman

They delivered enormous value to their shareholders.

Rob Millner

We had a Souls board meeting yesterday, and we were only talking about we're now about a top 40 company in Australia, but nearly all the companies in front of us have gone broke. BHP, Westpac, CSR, and Boral in our building days. They were in the top 10 companies in Australia. It's been incredible, and these two companies have been able to keep going and grow.

Matthew Kidman

Yep. Keeping on and on, which is terrific. So you left stock broking, and you went back to Cowra.

Rob Millner

I went back to the property. Yeah.

Matthew Kidman

Why was that? You just loved farming?

Rob Millner

Well, I went to boarding school when I was eight, so coming home on holidays. And in those days it was a three-term year, so you were away for 14 or 15 weeks at a time. And I just had an urge for it.

I stayed there until late '83 or early '84. And then in those days, you were invited to join a board. You didn't go through the process you go now with head hunters looking for people. People asked you to join a board. And Jim asked me, would I like to go on the board? And I accepted. Yeah.

Matthew Kidman

So just going back to the farm, farming's a tough business. I know you love it, and you still spend time down at Cowra. What did you learn about business on the farm?

Because in that period you're talking about, if my memory serves me, there were some hard times, but then the drought broke just as you were leaving. In '83, the Hawke government came in. It rained. Things turned, but it was very tough before that.

Rob Millner

Well, most of my generation growing up didn't have a lot of money, and commodity prices rurally in the '70s were very ... Cattle were worth $30. We sold bullocks the other day for $3,300.

There wasn't much money, and we didn't have the equipment. You sat on a tractor with no cabin and these sorts of things, but it was a good lifestyle. And some of my best mates are still the guys I grew up with in Cowra.

Matthew Kidman

And I think that sustains. Even know agriculture's become a lot more professional, people still like the lifestyle, the freedom of it, I gather.

Rob Millner

Yeah. And I don't like to say this, but most of the people in the bush are genuine people. They're not trying to show you how big their boat is or how big their house is.

Matthew Kidman

No, they're pretty modest.

Rob Millner

Yeah. They're hard-working people who get on with life.

Matthew Kidman

And did you know that you would go to Soul Patts? Were you close to your uncle? This is while you're out on the farm, and you're farming, and obviously your uncle was building quite a big business based in the city. Did you know that was going to happen? Did you have an inkling that's what you wanted to do?

Rob Millner

Well, I'd always been brought up with shares, and we'd had family meetings. We used to go to Canberra every year and have a family meeting.

So I knew what was going on business-wise and share-wise, market-wise, et cetera, et cetera. So I knew that part of the business.

In those days, Souls was a hell of a lot smaller than what it is today. It was virtually the cross share holding and Brickworks, and New Hope a was very, very early investment. And it was basically just pharmaceutical business.

Matthew Kidman

So you came from the farm. You got invited onto the board of Soul Patts, which you went onto. Then you moved to Sydney at the time?

Rob Millner

No, I didn't. I used to get the plane down, or I drove. And then obviously in that period after I joined, New Hope took off.

We went to Indonesia and started a mine called the Adaro Mine, which we sold in the middle '90s. It was doing 25 million tonne of coal when we sold it.

So we started that, built a coal loader, et cetera, et cetera. So that took a lot of our time. We'd end up going up there two or three times a year.

Matthew Kidman

So as a board member, you were involved a lot in the operations.

Rob Millner

Oh, yeah. And Souls has always been very hands-on.

Matthew Kidman

And that was quite brave at that stage. Indonesia, there were obviously some Australian companies there, but they were the big companies. And Soul Patts, as you said, was just emerging. You went up to Indonesia. It was pretty brave stuff.

Rob Millner

Well, a chap told Frank Robertson, who used to be with Patrick Partners in the stockbroking business, and him and Jim were good mates. And his son Graham went up to Indonesia and married the Sultan of Yogyakarta's granddaughter.

So that enabled us to do things that you probably wouldn't normally do. And there's no way we could have done now what we did up there. There was a lot of US$25,000 and things like that to get to the next stage.

Matthew Kidman

That was a different world.

Rob Millner

And I think that's probably why you don't see a lot of companies now, Australian companies now, going into those sort of places. And we're even experiencing it now with some of those companies in New Guinea are struggling with.

Matthew Kidman

Yeah. So with that period in '84 through to '98, you obviously became more senior as time went on. Did you get a lot of exposure to Jim and what he was doing?

Rob Millner

Yeah.

Matthew Kidman

Because he was the boss. He was pulling the reins. And what did you learn from him?

Rob Millner

Well, obviously I stayed there quite often. As I said, he was a very, very astute man; knew what was going on. He was a pharmacist, obviously, by trade. He came back. He didn't finish the degree when war came, so he came back and did that.

But I think that experience he had with Australian Oil and Gas gave him a great insight to what happened in Australia, as far as mining goes. And he and his uncle Fred, who was the chairman before, Soul's had always had a share portfolio.

Matthew Kidman

So they always liked the market, it seemed like.

Rob Millner

And also in that period, there were no Coles or Woolworths, and Souls was the first one to have baskets outside our shops. And we used to put Omo laundry detergent in there, or salmon.

We were the first discounters in Australia. And also, in the pharmacy, we had our own wholesaling, manufacturing and retail. So we were by far the biggest pharmaceutical operation in New South Wales.

Matthew Kidman

Yeah. And the one big regret, I remember talking to Jim, was that he never went full blow into supermarkets. He thought he'd missed that opportunity, which was true. But he had a lot of other opportunities. I suppose some things fall your way and some things don't.

Rob Millner

And looking back, with the size of those companies now, I don't know whether Souls would have ever been able to do it or not, because they're massive organisations now, the Coles and the Woolworths, but there's no doubt it's changed the way people live and shop now that the old strip centres are all gone.

Matthew Kidman

It's changing again, as we speak. So take us into the Millner psyche. Your uncle Jim was in charge for a long time. 1998 comes. You come in as chairman. You've been on the board for a long time. Seems sensible.

But did the Pattinsons and Millners always think it was to be handed onto the next generation of the family, even though it was a publicly listed company? And did you feel that way when you were on the board?

Rob Millner

No, no, no. I don't think there was any hard and fast rule, but obviously I'd done my groundwork there. And it wasn't only Jim. It was Hugh Dixon, who was also on the board. Other members of the board thought that I was able to take the load and continue on.

And I had a great education about three or four months after I had taken over as chairman. I got a phone call from Sir Ron Brierley. I nearly died, of course. Just been in the job for a couple of months and ...

Matthew Kidman

Brierley was a famous corporate raider at the time.

Rob Millner

Yeah. Well, it was in that era of John Elliot and Robert Holmes a Court.

Matthew Kidman

Well, all those guys were still fresh in our minds. Today we don't really hear about it as much, these raiders, but then it was the back end of what they were doing, wasn't it? It was still alive.

Rob Millner

And again, there's no way those guys could have operated today the way they did in those days. There was a lot of insider trading in shares.

Matthew Kidman

And it was very aggressive. And what did Ron say on that phone call? Do you remember?

Rob Millner

He said, "We're going to come and take Brickworks over." So fortunately we had a guy called David Fairfull, who was on the Soul Pattinson board, and he was an investment banker. He started with Kleinwort Benson.

So I got him involved. Then he said, "I think I know the bloke that we can help fight this case. He's a guy called Jeff Hill." Because Jeff had done quite a bit of work for Sir Ron.

Matthew Kidman

Oh, right. Because I know he worked with Spalvins out of Adelaide, but I didn't know he worked for Sir Ron.

Rob Millner

And he knew how all these guys operated. I said, "Ron called a meeting in our office."

Matthew Kidman

An EGM?

Rob Millner

No, no, just a meeting.

Matthew Kidman

Oh, of you and him.

Rob Millner

Yeah. To tell us what he was going to do. And Gary Weiss came with him, of course.

Matthew Kidman

And how were you feeling? Were you nervous?

Rob Millner

I was nervous as buggery! I could have said something else, but yeah, I was very nervous! Jeff Hill said, "Well, Sir Ron has called the meeting, so we just sit here, wait till he says something."

The Bradman Trust had put out 100 photos of Sir Donald Bradman and we had one; we'd never done much corporately, so we bought one of these.

So I sat Sir Ron down underneath, because he was a mad cricket fan. We sat there for quarter of an hour before Sir Ron said something.

Matthew Kidman

Fifteen minutes then?

Rob Millner

Well he called the meeting! Jeff said, "He's called the meeting; just wait till he says something." To me, that was one of the greatest experiences. That really hardened me up and toughened me up and I thought, "Shit."

Matthew Kidman

It's real.

Rob Millner

Yeah.

Matthew Kidman

And why do you think you just sat there? Was he trying to scare you, trying to freeze you out?

Rob Millner

I don't know.

Matthew Kidman

See if you break, say something silly.

Rob Millner

Yeah. Well, I suppose. Luckily we'd had someone who'd been in this environment telling me what to do.

Matthew Kidman

And finish the meeting. How did it end up? What happened?

Rob Millner

Oh, he just told us what he was going to do; he was going to take Brickworks over. After it all happened, everybody said he probably should have had a go at Souls, but anyway, that's another story.

Matthew Kidman

And was that where the cross shareholding came from?

Rob Millner

Yeah.

Matthew Kidman

In a defence mechanism against takeover?

Rob Millner

No, the cross share holding was already there.

Matthew Kidman

And he wanted to unwind it.

Rob Millner

Yeah. A guy called Bill Dawes at the same period of time — we were talking about with the John Elliots and Holmes a Courts, et cetera, et cetera — he owned Brickworks and he was worried that something was going to happen. Him and Jim met up somewhere and that's how they put the two together.

Matthew Kidman

We'll keep going on the cross shareholding scenario because you've still got it. But you had the big run with Perpetual, which was quite public, quite bruising. Because there was a lot of legal action.

Rob Millner

Yeah. They planted guys around the place that kept throwing stones at us and writing these ridiculous articles. We ended up in the court of law and they got absolutely thrashed.

Matthew Kidman

We know why the cross shareholding came about. You just told us there was some people — your uncle and the other gentleman — who were a bit scared. Why is it still relevant today and why do you like having it?

Rob Millner

I don't say why we like having it. It's been a very good business for both Souls and Brickworks, particularly, I think, probably more so for Brickworks, because in the building industry, you get peaks and troughs.

With the Souls dividend that's paid twice a year to Brickworks, Brickworks have been able to produce steady and increasing dividends even while the building products have gone in some of these troughs that they've had.

Matthew Kidman

It gets the advantage of the diversification through Soul Patts.

Rob Millner

And again for Souls, which we'll probably touch on. But it's one of our major investments and has been a good investment for us.

Matthew Kidman

Sticking with Brickworks, Lindsay Partridge has run it for many years and I know you're close to Lindsay, but the amazing thing about Brickworks is now it's mainly a property company.

They've set up this trust and it's been an unbelievable performer and taken advantage of the property boom we've all gone through. It's been quite amazing, hasn't it?

Rob Millner

Well, going back 20 odd years ago, Bill Dawes, who I just mentioned, who was founder of Brickworks, bought 1200 acres out there, on Wallgrove Road in western Sydney. I'll just go back a step. The first brickworks in Sydney was at St Peters.

Matthew Kidman

Yup.

Rob Millner

Obviously, over time, land and buildings encroach on the brickworks and they're not the best thing to have in your backyard.

Over the years, Brickworks had plants at Brookvale, plants at Eastwood, one at Scoresby in Melbourne, which we've had to close because they encroach the environment and it's not a good place. And then all of a sudden the land is too valuable to make bricks on.

Anyway, old Bill Dawes had this great vision. And 25 years ago, if this was this morning, he'd probably hear on the traffic report that there were some cows out in the road at Wallgrove Road. And we used to save, I think it was $180,000 a year, by running cattle out there.

Matthew Kidman

Yeah. I think you still do that with your coal assets!

Rob Millner

As you said, I don't think anyone could have envisaged in 25 years how this trust has grown. And Lindsay and I said every time we sell a parcel of land, we're not going to pay a special dividend and give it back to the shareholders. Why don't we put this into this trust? Looking back 20, 25 years ago, none of us would have envisioned the growth of this.

Matthew Kidman

It's interesting, Because there're the likes of Soul Patts and Brickworks, Harvey Norman, and others who like to own the hard assets, the property. But the trend over the years is don't own the hard assets because you tie up too much capital.

Have you got to view on that? Have people been wrong on that and it's always better to be your own landlord and own the asset underneath because over time that's always going to be valuable? Do you think like that?

Rob Millner

I think so. I think that's the way to go, if you're able to do it financially. Looking back 25 years ago, that land is a couple of million dollars an acre. Who would've envisaged that?

I remember we went down to Bowral eight or 10 years ago and paid $30,000 an acre at Bowral. People thought we were mad, but we were getting a million dollars for our land at Wallgrove.

Matthew Kidman

Yeah.

Rob Millner

Because we have a brick operation at Bowral and it's getting very tired. And we needed to buy some clay for the future development down there.

Matthew Kidman

Yeah. It's been terrific. And now you've got Amazon as a tenant.

Rob Millner

Yeah.

Matthew Kidman

Who would've thought that the second biggest company in the world is your tenant?

Rob Millner

Well, actually Coles is building an even bigger setup. You see, you can no longer take a B-double truck down Parramatta Road, for example, and these trucks cost so much to run. You pull them in, unload them, load them up again and they go back to Brisbane. They don't stop.

Matthew Kidman

I wonder, 25 years ago or 30 years ago when they were buying those assets, they thought, "Well, the world will move to online. We'll need factories and we'll need trucks. You've got to buy this land." Do you think that was the conversation?

Rob Millner

Well, we've seen an unbelievable change in the way the world works. I go back to when Commonwealth Bank and CSL floated in the '80s.

And you look at CSL — $310 or something; they've split the shares. They were $4 or something, $3.70? Commonwealth Bank was two instalments, about $6 or $7 weren't they? As I said, they're $110 — who would've thought? And a house at Mosman, what it's worth now.

Matthew Kidman

Yeah.

Rob Millner

And what my rural properties are worth. The whole thing — staggering.

Matthew Kidman

Yeah. It's incredible. It's incredible. And the people who have owned the assets over time have been the winners, haven't they? And you'll be dealing with those people and a lot of employees.

It's quite interesting how the world's going. It'll be interesting to see if it reverts back. We'll tell that over time, but it's hard to pick.

You told us about coming in. One thing I've noticed when I've spoken to you in the past and I've listened to interviews, the legacy of your family and running the company as the chair, weighs pretty heavily. I'm not saying it keeps you up at night.

Rob Millner

No, no.

Matthew Kidman

But there's a great acknowledgement that, "Not on my watch is anything going wrong." How do you feel about that?

Rob Millner

I've always had it at the back of my mind that I don't want to be the one that blows the place up. But again, I think the reason that Soul Patts and Brickworks and TPG and New Hope have been so successful, is we've had an ability to pick and attract good people to come and run our operations.

See, we've grown a bit in the last eight or nine months, but we added 10 or 12 people up at Souls. So I couldn't send CEO Todd Barlow out to run a brick operation or something if it went wrong.

I think we've had over a period of time, the ability to pick very good people to run our businesses. And I think that's been the strength of our success.

Matthew Kidman

Yeah. And just going back to that position: 10 times your money since you've come in. And we've talked about asset inflation and being in the right space, but they've been generally good decisions over time, measured decisions.

If the next 22 years was another 10 times, you'd be a $100 billion company. It's quite amazing when you look at it that way.

Rob Millner

Oh yeah. It's been incredible. But we've made mistakes. Every investment we've made hasn't turned out.

Matthew Kidman

What your worst? Let's get that out of the way.

Rob Millner

We went into a company called Balfours. Anyone in South Australia listening to this would know it's the biggest maker of meat pies and cakes, and if you look at the signage on the Adelaide Oval, there's always Balfour signs.

Anyway, we went into that, again, I don't know — it was a bit of a legacy, as you mentioned before, about being a Coles or a Woolies.

We struggled in that; we didn't have good people running it. And we ran into the powerhouse of Woolworths and Coles, of being a supplier to them. That's by far our worst investment.

Matthew Kidman

We all learn lessons, no matter how old we are. What lessons did you learn out of that? Diversity of customers?

Rob Millner

Yes. And I think, again, it was badly managed. We certainly wouldn't have had the losses we had if we'd had better management, but it's very difficult and it's not as bad these days, but most people then were suppliers to Coles and Woolworths.

Matthew Kidman

And what do you think you lost on that? Can you quantify it for us?

Rob Millner

I can't remember now, but it was quite a bit of money.

Matthew Kidman

Yeah. Let's go to a really good one. You bought, I think off Kevin Parry, if I remember correctly, an old entrepreneur from the '80s, you bought Newcastle 9.

And that was great for a couple of reasons. One, it was a very good asset in the '80s and '90s as a television network. But it also had access to spectrum.

My recollection is that's how you worked your way into the telecommunications market. At first that didn't work either. I remember Michael Simmons was running it and it was tough going, but then you found David Teoh and you married the companies up and off she went.

Do you want to talk a bit about what you saw there? The initial investment ended a lot different to what it is today, from what you started as.

Rob Millner

Well, you mentioned Kevin Parry, but that was at the same time as Christopher Skase had Channel Seven and Alan Bond had bought Channel Nine from the Packer family.

Matthew Kidman

And Frank Lowy took Channel 10.

Rob Millner

That's right, Frank. And they absolutely smashed the TV stations. They overspent, and Parry had a boat, Bond had a boat. They just blew the whole industry up. David Fairfull again, bought NBN 3 to us — $37 million we paid for that.

Matthew Kidman

What was it earning?

Rob Millner

I can't remember, but it was the largest, highest rating TV station in the Channel Nine network. And TV stations in those days generated a lot of cash. We went along, we went along and things were going very well.

And then all of a sudden we arrive up there one day and management tells us digital TV is coming. So they told us it's going to cost us $30 million. We nearly all fell off our seats.

And then the boys went back and did some more homework and found out — and people listening to this will remember too — when you're sitting at home, very rarely do you lose your picture on your TV. We owned our own transmitters and translators from Gosford to the Gold Coast.

Matthew Kidman

You bought the hard assets again.

Rob Millner

Yeah. We spent another $30 million and put infrastructure from Sydney to Gosford, and Gold Coast to Brisbane. In the meantime, COMindico spent $270 million putting a cable in inland from Melbourne to Brisbane, and an offshoot to Sydney.

We'd spent $30 million and gone Sydney to Brisbane and then we did a tie-up with WIN Television to go from Cairns to Melbourne.

Matthew Kidman

That's the Gordon family.

Rob Millner

Yeah. And then in the meantime, when it was enough traffic, we went out to Tamworth or we went to Wagga or wherever. We did all this for about $60 million. And as I said, the other people had spent $270.

Matthew Kidman

Wow.

Rob Millner

Time went along, and then Michael Simmons, as you mentioned, thought with the digital and the network we had, that we could start up a telco business. It was difficult going.

Matthew Kidman

Great idea.

Rob Millner

Yeah.

Matthew Kidman

It took a while to get going though.

Rob Millner

But as an investment for Soul Pattinson, in the meantime we sold off NBN Television, which we paid $37 million for. We sold that for $250 million.

Then we had SP Telemedia; you mentioned David Teoh. We put those two companies together. And when you look at it now, for $37 million, we own 12.5% of a $12 billion company.

Matthew Kidman

And David was TPG.

Rob Millner

Yeah.

Matthew Kidman

And he provided low-cost access to, basically, the emerging internet.

Rob Millner

Yeah.

Matthew Kidman

And you put those together and there you have it. And is that your best ever investment?

Rob Millner

It'd be hard to beat, going from $37 million to 12.5% of $12 billion. New Hope has been a wonderful, wonderful story. It's a dirty word these days, coal mining. But the cash that New Hope has generated...

Matthew Kidman

It's been enormous.

Rob Millner

Oh, unbelievable.

Matthew Kidman

We'll come back to New Hope. Let's finish on the telcos. The merger with TPG, and then it's had another offshoot, and David's gone up to Singapore.

Rob Millner

Yeah.

Matthew Kidman

At the same time, the Australian TPG has merged with Vodafone. You've effectively in Australia become the third.

Rob Millner

Yeah.

Matthew Kidman

And now out of it, you're also a player in Singapore — probably the fourth at the moment?

Rob Millner

Yeah.

Matthew Kidman

It's becoming an international business; it keeps going.

Rob Millner

Well, David's a very smart operator and he had vision. He's Malay, so he knows that part of the world very well. And again, we're going to be the lowest cost producer up there, so we'll do well.

Matthew Kidman

And you retained your share holding in the domestic company.

Rob Millner

Yeah.

Matthew Kidman

TPG. David's not there now; he's running Singapore. Has it got a great future?

Rob Millner

Yeah. We've been handbraked since the pandemic. I think we've done about $100 million last year just on overseas visitors and students not coming, particularly people coming out of Europe. Everybody knows the Vodafone brand, and when they come to Australia they get a Vodafone SIM card.

That has some impact on us. But again, we have been held up for two years by the Australian Competition and Consumer Commission, and in the meantime, Optus and Telstra had spent all this money on infrastructure.

We're a long way behind them. But I think they've announced in the press in the last couple of days that we've got 85% coverage in some of the cities now. So we are going to get there.

Matthew Kidman

And you'll be the price disruptor, like David has always been, or TPG has, and you'll get your fair market share.

Rob Millner

See, we've got the infrastructure. We've got better back haul than anybody else, but we've just got to get the infrastructure in place.

Matthew Kidman

And 5G? You're excited about that.

Rob Millner

Yeah, David has said for a long time how much difference people will notice with the speed of it.

Matthew Kidman

And Singapore, you've got a reasonably big holding in the (inaudible) investment company up there. David's very excited about that.

Rob Millner

Yeah. Again, it's been difficult because he can't get up there to put his footprint on it a bit more, but we've got some very good people running it.

I usually go five or six times a year because we've got some other business interests up there. I'm looking forward to going up in February and having a look around and talking to the guys up there.

Matthew Kidman

They've started well, it looks like.

Rob Millner

Yeah. But again, we had to start from scratch, and I've got to be careful what I say here, but you're dealing with Singapore Inc up there, which is the Temaseks, and they haven't made it very easy for us.

Matthew Kidman

Okay. Well, if you break that down, you're going to do very well. Get over those first few hurdles. Okay. Let's go to coal. It's interesting what you say about coal and you've done incredibly well.

Long history, Indonesia, New Hope, Acland, and through the Hunter Valley here. And we all know the issues with coal. We've just had the COP26, interesting name for a gathering. And coal had a bit of a reprieve, or a bit of a win.

Rob Millner

They should have called it COP400, the 400 private jets that all flew in.

Matthew Kidman

It was amazing wasn't it? It was the biggest gathering.

Rob Millner

All these people trying to worry about climate change, and all got their own plane. None of them went on a bloody domestic plane.

Matthew Kidman

No.

Rob Millner

Crazy. Crappy.

Matthew Kidman

And they arrive for two days, and then they're out. The whole thing keeps going, it's quite an amazing situation.

But you did mention before that you talked about analog and digital. Now, that was a commercial outcome, but you were faced with a change, and it's not much different this time.

Coal, as I've heard you say, needs a place for quite a while, but in the end of the day, your grandkids or whoever will probably not live in a coal-based world for their power. I could be wrong there, but that's the way the world's heading.

How do you see that? And what role does Soul Patts have, and how do you handle it? Because it's a dual front for you.

It's a very good business that produces a lot of money, but a lot of investors these days have already said, well, we can't invest in that. And so, the asset may never be worth what the cash flows are. So, from that point of view, how do you handle that?

Rob Millner

It's a question with about six or seven fronts on it. I don't know. To me, the question is still out. They're still building high-energy, low-emission power stations as we speak, so they're going to need coal.

All the interviews I do with people on the press and the TV, they won't print, is 14% of the world still not have got running water or power. That's 14%.

So, one-seventh of our population still has no energy, and most of those people are in Asia. There's no gas or no coal in Asia. We have the cleanest coal in Australia and plenty of gas.

At this stage, it appears they're going to be winding down. I don't think there's going to be many more approvals. Our operations will be finished by 2038, so 2050 for New Hope is not a problem for us, anyway.

Matthew Kidman

So your sunset is 2038?

Rob Millner

Yeah. Unless we buy some other assets with longer mine life, but we're still going to need some sort of base power. I don't know whether you saw the figures the other day, if we all had electric cars at the moment, how much increased electricity is needed to charge that.

Matthew Kidman

Incredible. We're racing towards it, but we need more power to do it.

Rob Millner

So, it's a difficult one to answer on the facts that we're facing at the moment. There's a push to end coal and gas, but where all that ends up, I couldn't give you a...

Matthew Kidman

And you're holding in New Hope is 39.9%, close to that?

Rob Millner

Yeah.

Matthew Kidman

What does that mean for your accounting and your control of it? How do you see that?

Rob Millner

We still control it. Our cost base is virtually zero. New Hope over the years has paid out over $1 billion just in special dividends.

Matthew Kidman

Incredible.

Rob Millner

And at the moment, coal is US$160 dollars a tonne. It was US$260 a tonne a month ago. In July last year, it was US$50 a tonne.

Matthew Kidman

Incredibly volatile.

Rob Millner

So, the money Whitehaven and New Hope and Yancoal are making at the moment is incredible.

Matthew Kidman

And this is the cleaner coal around the world, and we all know that coal's got a role to do this transition, and it can't just turn off overnight. It's ridiculous.

But places like India, China, much bigger populations, coal Is nowhere near as clean. Do you have a view on what happens with them?

This is more of a political question about how world coal goes. How do they wean themselves off the energy source they've got at the moment? Because we all know that especially the Indian coal is not great for the environment.

Rob Millner

No. And nor is Chinese coal.

Matthew Kidman

No. That's right.

Rob Millner

And that's what we've just seen in the last period of time when they've cut us out of importing, whether it's wine or coal or whatever it is into China — they've been burning their own dirty coal.

Matthew Kidman

It's an ongoing disaster. They keep turning their production off because of the pollution.

Rob Millner

They're not too worried about the pollution. They just keep burning their own coal, and they didn't even turn up to Glasgow. I don't know. As I said before, I don't know where it all ends up.

Matthew Kidman

No. It's difficult. And then they decide to do some kind of loose deal with the US and cut everyone else out.

Rob Millner

Yeah.

Matthew Kidman

Strange stuff. Let's keep going with the different assets. You've done one of your biggest deals recently. In fact, a lot of things have happened at Souls. You're not slowing down.

Rob Millner

No. I've got good people up there.

Matthew Kidman

You've been with Milton for a long time. Been on the board.

Rob Millner

I was actually chairman of Milton.

Matthew Kidman

That's right. Yeah. And you owned a percentage of it.

Rob Millner

Yeah.

Matthew Kidman

But now you've decided to merge with Milton, and no longer will it be an LIC — it comes into the Soul company. Why would you do that?

Because you've already got your own investment portfolios within Souls, and you've got a number of positions in different various fund managers, and you've built up a terrific business, but now you bid this, and it's a big one. It's a big deal.

Rob Millner

Again, they've got good people down there. And it gives us the option of not having $3.5 billion or $4 billion — it got to $4 billion at one stage — all in the Australian market.

It's going to give us an option, and we're not going to be as dependent as Milton was. And an LIC, as you well know, what I call the older ones have always been very dependent on paying out somewhere between 90 and 100% of their profits out to shareholders. Whereas we'll bring that into Souls.

We can put some money into overseas equities, probably put some money into private equity, and just diverse a little bit, but with the investments that we've got in Souls, Milton's shareholders are going to continue and probably get an extra dividend than what they would've got normally because they've got the diversification of the portfolio of Souls behind them as well.

Matthew Kidman

So, it works for them just like it has for Brickworks over the years. So, you've had your own investment portfolios that you've got in Souls, large caps, small caps. Does Milton basically come in under those? Is that how it's going to look?

Rob Millner

It'll all be one. Obviously, it'll be different cost bases because obviously the Milton shares have all been set at a different cost base, but they'll be just run by the same people.

Matthew Kidman

And with your other investments, you've got BKI, you've got Pengana, and there's five or six of them, do they come under the same scrutiny as what you're saying there? Milton was a lot bigger.

Rob Millner

Yeah. Yeah.

Matthew Kidman

Or do you have ambitions?

Rob Millner

No. The Milton portfolio now will be run internally by Brendan O'Dea and his team, who are the Milton team. BKI is a separate investment that came out of when Brickworks bought out Bristile.

We needed to raise some equity, and again, I mentioned before the dividend income out of Brickworks. So we raised a few more dollars and floated that off into the market at $180 million. It's now worth about $1.3 billion.

Matthew Kidman

It's been a tremendous success.

Rob Millner

Yeah. So, that's a smaller investment that we've got. I don't know whether they're going forward with things like Pengana and Iron Bark and those things, whether they'll all come into one. But we've just got to see how that all plays out.

Matthew Kidman

And a question that we talked about before we started the podcast was, you're in an unusual position. You've got a big investment house, and you take positions, and you back people, you don't necessarily own assets 100%.

So, you're definitely an investor, and we talk about Berkshire Hathaway, but you are also sitting on boards, helping make decisions. You're also an operator. In your own eyes, what are you, investor or an operator? Because you succeed at a buck.

Rob Millner

Yeah. Some people ask me, and I say, "Well, I can't really be an expert on one particular type of asset, but I hope I know quite a bit about most of the investments that we're in." And we've always had that position on boards — it's given us some influence on those companies.

I think it's important when you own 30, or 40, or 50% of a company, we should have some sort of representation on that board, and we've had some great relationships with all the people that we've worked with.

We're common-sense people. We don't go in and tell Lindsay Partridge how to run Brickworks, or the people on the Brickworks board how to sit at a table.

Matthew Kidman

So you see yourself as an operator, but a facilitator for the people on the ground. Is that a good way of putting it?

Rob Millner

I don't know how I can describe myself.

Matthew Kidman

An investor first, operator second.

Rob Millner

Yeah.

Matthew Kidman

And today, how many boards do you sit on?

Rob Millner

Don't tell the authorities. I think there's seven at the moment.

Matthew Kidman

And chair of?

Rob Millner

Three.

Matthew Kidman

That's quite a load.

Rob Millner

Yeah. But I've been doing it all my life. People don't realise that within Soul Pattinson, API came out of our own pharmacy business, New Hope was 100% owned by Soul Pattinson. The TV station was 100% owned by Soul Pattinson.

We floated all these businesses out into the market, so I'm not doing more now than what I was doing 25 years ago, except we've probably got better people running them. No. Outside the Soul's group, we've got some very good people.

Matthew Kidman

You've got specialised people. But it does provide great variety as well.

Rob Millner

Oh, yeah. Again, apart from investing in good people, we've been able to pick businesses that have, well, the most important thing, they've got to generate good cash, but they've always been able to produce cash. And if one's down, the other two or other four are up, or if two are down, the other three or four are up.

Matthew Kidman

Now, here's a question. Now, you brought up the word cash. It's quite interesting because when I was starting out in funds management, my mentor and boss was Geoff Wilson.

The first month I was with him, every day we'd go through the cash flow of a company and he said, "This is what you're really investing in, the cash flow."

Recently, I listened to a Livewire production, Buy Hold Sell, which is a show they run every day, and one of the young investors, they were asking them if you want to pick a 10 bagger, which Soul Patts has been over the period you've been there, what do you do to identify it?

And one of the participants in the show said, well, the first thing you do is not look at the cash flow. And he was referring to the ability of new-age companies in the technology world, that you need the investment upfront to get the market share.

Can you reconcile your view that cash is king with that attitude? And would you be able to pick a 10 bagger in that environment if that's what you've got to look for?

Rob Millner

Again, you and I've come from a different era. And this is the second one of these we've been through; we went through the tech boom there.

But I think we've all probably made big mistakes in not appreciating what things like Microsoft, and Apple, and Facebook have done and not investing in them, even though they're overseas companies. I think we've all made a mistake there as good investors.

But coming back to your point, in companies like Soul Pattinson and the investment companies I mentioned to you, our shareholders are dependent on dividends.

So we have to buy stocks or companies that generate income or good cash flows. We then can pay out those dividends to our shareholders. And I think, again, that's been our success.

You mentioned the company's been listed since 1903. We've never missed paying a dividend, and that's through the GFC, war years, depression. In the last 25 years, I think, we're the only ones now that put our dividend up each half. So, there's some proof in the pudding there.

Matthew Kidman

And just with Soul Patts, I think you had around 30,000 shareholders, pre Milton merger?

Rob Millner

Yeah. We're about 55,000 now.

Matthew Kidman

So, there's quite a few people depending on you guys for those dividends. That's what they're there for.

Rob Millner

As you know, you've been around the investment company, the majority of the older people have their money in something they can understand like an LIC, and they're very dependent on that income.

And unfortunately, this time last year, they all got smashed because some of the banks didn't pay a dividend, and BHP. I know BKI, for example, is going to make more in this half they made the whole year, last year because we've had these increases in dividends.

Matthew Kidman

Yeah. Quite remarkable. It's been an incredible story. But just before we leave, the companies that you've floated out, you said before you had all these assets in house, and then you floated them out.

Recently, there was Round Oak Minerals, which is base metals, clay, copper, nickel, and so on. You decided not to progress with that, with the float. Some colour on that? It's pretty recent and you've said, given the market, we're not going in.

Rob Millner

Yeah. I've got to be a bit guarded with what I say here. We've recently had some good drill results, and there's been a lot of IPOs on the market, and we just probably thought, well, maybe it's not the right time to do it. We can take it in-house again.

Round Oak is generating copper. Copper has gone from $2.10 a pound to $4.50 a pound. I think we got $75 million out of that company last year and made $180 EBITDA.

So we just put that on hold. We've gone and got a couple of extra directors to give us a bit more guts in that side of the thing.

But it is another investment that I'm very confident in years to come will grow, and I'm very confident on things like copper and some of these metals we're going to need going forward. It's a bit like coal. They're not allowing people a licence for another copper mine, or another zinc mine.

Matthew Kidman

But those products are in huge demand in the new world, especially the battery world.

Rob Millner

Yeah. We've got to ask ourselves, if people are not going to approve all these projects, what's going to happen to these?

Matthew Kidman

Yeah. That's right. But tell me, how did you go about putting Round Oak together? Where did that come from?

Rob Millner

Someone bought us the assets up at Cloncurry to start with, and we've just grown from there. We bought the Jaguar asset, which is a Western Australian asset. Again, we've got good people there, but for a while, we didn't have the right people in the job.

Matthew Kidman

And when did those assets come to you? When were they presented? Was the market in a lull?

Rob Millner

Yeah.

Matthew Kidman

It's been very strong recently.

Rob Millner

Yeah. Yeah. We had struggled for a few years with shipment because of commodity prices. And also, when you're opening mines, you're sinking cash into it.

Matthew Kidman

Sure. Yeah. And were the words of your uncle ringing in your ear? Do you buy when things are low and you'll prosper later on?

Rob Millner

That's right.

Matthew Kidman

Was that philosophy being played out there?

Rob Millner

Yeah. And interesting, everybody's now trying to raise money for these sorts of projects, but no one was raising money two or three years ago when they should have been.

So these assets two or three years ago could now be producing. So, what's happening now, people are raising money at the top of the market, then going away to build an asset.

By the time the assets ready to develop, you'll probably find the copper price has gone down again. So we're funny animals. We're funny animals. See Sandfire Resources, what did they raise? A billion and a half or something.

Matthew Kidman

It's interesting, because Warren Buffet always says, "If you were a buyer of an asset, do you want it to be going up in price, or do you want to be down?" And if you're buying a house or something you believe in, you say, "Well, the cheaper I can get it, the better."

But people in the market like to buy things on the up. But let's go back to what you said before, which is a really relevant part at the moment, because it's the evolution of the world, and Australia is playing a role in it.

These base metals are key. You sounded like in the long run you're embracing that. We've talked about out how coal might be a sunset industry over a very long period. Whether it be copper, nickel, zinc, these products, these base metals you're quite bullish on?

Rob Millner

Yeah. And again, if you believe all the facts and figures that are being presented to us, electric cars, all these types of things are going to need base metals. And I know all wind turbines, all the steel that goes into these sorts of things.

It's just, again, it's just been passive, they go in and build all this infrastructure in America. They're going to need a lot of steel and they're going to need a lot of things over there.

Matthew Kidman

It's almost a mini industrial revolution in some ways, isn't it? Because people are re-building from ground up.

Rob Millner

And when you look around the world, the underground rail systems in America and London have been there for a long, long time there. There's a lot of infrastructure that's getting tired and needs replacing.

Matthew Kidman

And on top of that, as you said, there's 14% of the world which is trying to do it. It's over a billion people that have got to be brought into the modern world. So it could be a 50 year cycle. It could be a cycle like your uncle went through in the 50s and 60s, where it went for a long time.

Rob Millner

As you know, we've been around a long time. Something always comes from left field that knocks something. But the way we are looking at the moment, I think commodities and base metals have got a very bright future.

Matthew Kidman

And Australia, a bright future? Given we've grown up on that, our agricultural products and then mining.

Rob Millner

Yeah. Yeah. Just having rural properties, agriculture's very, very good at the moment. And again, we need to feed the world; we're able to do that.

I'm not sure how we go government-wise. I think we've highlighted what's happened with these lockdowns and some of these premiers that... Walking down here today, the number of empty shops.

Matthew Kidman

It's dispiriting, isn't it?

Rob Millner

Yeah.

Matthew Kidman

This lockdown. Well, Sydney CBD, where we're sitting today — a lot of people haven't come back.

Rob Millner

And what we're hearing in the last few days in Europe, some of these countries are going back into lockdown.

Matthew Kidman

Yeah.

Rob Millner

I don't know. But genuinely, we're a great country. We haven't always been well-managed. I've got properties on the Lachlan River at Cowra, and it's in flood.

And they've been talking about extending the wall on the dam for years. Same as Warragamba Dam. So got all this water that's just been...

Matthew Kidman

We're not using it well.

Rob Millner

We're not utilising it.

Matthew Kidman

Water's a valuable asset, it's another one. So let's talk about the market. We've talked about the real world, some of the sectors. The US market is very high.

One of your key things is you're an investor, as you said. The Aussie market hasn't performed that well relative, but it's still up. What happens over there?

You've been in charge of Soul Patts for 23 years now, I think. You always invest in the long-term. I've heard you say, when we build a new brick kiln, it's for 40 or 50 years. And that's how you think. In this period and well beyond your tenure at Soul Patts, how do you think the share market goes?

Rob Millner

Well if history repeats itself, we've got to have a few cycles. Some people haven't got back into the market since the GFC, because they thought it was...

Matthew Kidman

A lot of retail investors.

Rob Millner

Yeah. They thought it was too expensive. And again, as we mentioned earlier, we're in this environment where interest rates, no one in the world has been through this period before of low interest rates. But there appears at the moment to be some rise in inflation.

Talking to people and reading articles, salaries and wages, some people are offering 10 or 15% increase in salaries and wages.

It's interesting, Lindsay Partridge was in America in June looking at our brick operations. And if you go to a McDonald's and have a cup of Coke, it's usually got the McDonald's branding on it.

On the cardboard, instead of having the Coca-Cola logo on it, they had, "If you come in for an interview we'll give you $100. If you are successful, we'll give you $1,000 bonus."

Matthew Kidman

Incredible.

Rob Millner

And we're hearing the same thing here. People are giving sign-on bonuses to people. I might be wrong, but I think it's going to be a while before we get migration coming back here to help us on the labour front.

Matthew Kidman

Well, I've heard Lindsay speak, and he refers to that now. He obviously specialises in the brick business and residential buildings. And he said, "You've got to temper your growth outlook. We're not going to grow as quick because immigration is going to be slow for a few years."

Immigration has been a great benefit for Australia. So you'd like to see the government to get back on the front foot and get that going again?

Rob Millner

We need immigration. As we mentioned before, agriculture, crops need to be picked and we need people here to work.

But in this era we're in now, we've got to be careful to bring people in who, one, have got a skill. And two, have been jabbed. Because we can't afford to have people in here again that spread the virus again.

Matthew Kidman

Yeah. Definitely. So when you came into Soul Patts, it was '84. You took the chair in '98. You were the Pattinson-Millner lineage. You mentioned before that you're slightly older than you used to be, like we all are.

You've got your son, Tom. He's on the investment side, but he also sits on the Soul Patts board, and a few other boards with you. Terrific young guy learning his craft, and he's done a good job of BKI.

How do you see that unfolding? Do you see yourself having your own timeline? I can't remember how old Jim was when he handed over, but he was probably in his 70s.

And then you took over as chair. Should we expect the Millners to continue on in the future? And is that how you see it?

Rob Millner

Well I'd like to stay while I'm still agile and able to do things for a few more years.

Matthew Kidman

I'm not writing you off, don't get me wrong. I know you got a fair bit left in the tank. But you must think about what the next step is.

Rob Millner

Obviously, yeah. All boards do succession planning. You've got to have something in place. And obviously the board will decide who they think is the best fit to take over from me. And whether they choose Tom, that'll be up to them. And obviously I'll stay out of it.

Matthew Kidman

And that's the correct answer, and the way it should be in a public company.

Rob Millner

Mind you, I've never asked him whether he wants to do the job either. But that's one — he's got to want to do it. And two, the board members at that time will then have to say, is he the best candidate or is Joe Blow a better candidate?

Matthew Kidman

And as I said, that's 100% the right way to go about it. And I wouldn't expect anything less. But rolling the other way for a second, just personally, given the handing down over the years to the Millners, it would be a proud day if Tom or one of the family members, or whoever it is, was the next leader of the group.

Rob Millner

It would be, it would be, I guess. They used to say the first two generations make it and the third blows it up. I'm the fourth, so I'm over that. But obviously the more generations we go on, there's probably more pressure. But again, it's going to depend on what others want.

Matthew Kidman

Yep. Okay. And Tom, a great guy, as I said. Very capable. He loves the investment game.

Rob Millner

Yeah. No, he's done well. He's done well. Still learning, of course. He's only in his early 40s.

Matthew Kidman

Yeah. We're all still learning. So, getting to this period, 23 years at the top of the corporate structure. It has grown an enormous amount; it's a big company. Something to be very proud of.

But if you start thinking about your legacy, because your uncle Jim left an incredible legacy. We interviewed him for Masters in the Market. And what he built was quite incredible. He diversified, he did it his way.

Speaking to Gerry Harvey recently, I asked him, "When are you going to finish up? You're 81, Gerry." He's got a few years on all of us. And he said, "Well, I was speaking to Rupert Murdoch, and Rupert's 90 and he said he feels okay." So there's no rest, it can't be 90.

Rob Millner

Very funny man, Gerry.

Matthew Kidman

But when the curtain does come down, and you'll make that decision, what's the legacy, the Rob Millner legacy on something that's been alive since 1903?

Rob Millner

We were only talking about this yesterday at lunch with one of our directors — Rob Westville retired after 16 years on the board.

And one thing I can say is that Souls have never done anything that's not above board. We've never insider traded. We've never done any of those sorts of things.

And I think I'd like to be remembered as a genuine person that's always put shareholders in the company first, and not myself or fellow board members.

We've always toed the line, and always looked at someone in the eye. There's a lot of people over the years have insider traded and made a lot of money that they shouldn't have made. We can hold our hat and say that what we've done is we've done it the right way.

Matthew Kidman

And that philosophy, that value system, and the shareholder mentality, do you think that's come about because you are shareholders, you're investors in your own products?

Rob Millner

Obviously, if you've got a large chunk of money in something, you've got to appreciate that more than someone that doesn't have any.

So what staggers me, you get some of these people these days saying, one, you shouldn't stay on the board too long. And two, if you got too many shares, you shouldn't be on the board.

I try and look at most of the annual reports every year, and I'm still staggered by the number of directors that don't own any shares. They turn up and get their director's fees.

Matthew Kidman

Or they've got options that they have to put money down for.

Rob Millner

And leave their bloody board papers on the table. You know?

Matthew Kidman

So you think that's very important.

Rob Millner

Of course it is. You've got to have some skin in the game.

Matthew Kidman

Which you always have.

Rob Millner

Yeah. Yeah.

Matthew Kidman

And is that where the dividend growth and focus is all important? When you look at the Souls annual report, it's got all these wonderful charts that go in the right direction.

But they're all about returns to shareholders, which is, as we talked about earlier, something that's been lost a little bit. We are divorced from the companies as investors.

Rob Millner

Yeah. As I said, I think having skin in the game and having good people that understand that shareholders are number one. The directors aren't number one, the shareholders are number one.

Matthew Kidman

And when you sit down, or the board does, as you said, you'll step aside because of interests. Do you think they'll successfully, that philosophy, that DNA within the company, the next group of leaders will have that built into them? Do you think you've been able to impart that on the key people around you?

Rob Millner

Yeah. I think CEO Todd Barlow has done a great job employing and gathering the people around him that he has. They're all young, all about Tom's age. Good, honest, genuine people that respect the company.

They're not out to what they can do for themselves, they enjoy their job and they enjoy working there. And more than happy to contribute to the long-term strategy of the company.

Matthew Kidman

And what does a retired Rob Millner look like? Back in Cowra?

Rob Millner

Ticky Fullerton did an interview with me some years ago. She asked, was I ready to retire? And I said to her, "My wife doesn't want me at home yet." I've just had three months at home when we were in that lockdown. No, things'll change, obviously you get to the end of your life.

Matthew Kidman

But you still enjoy that farm life, that freedom.

Rob Millner

Yeah, I enjoy going. I try and go back there a couple of times every month. Every couple of months. I enjoy that. I've got the family interests to look after as well.

Matthew Kidman

Terrific. Well, it's been great. A great hour. Really enjoyed it. It's been a long time. But I just wanted say, congratulations on what you've achieved, and good luck in the future.

And I'm a bit sentimental — I'd like to see a succession plan where the Millner name lives on. I'm barracking for Tom. Go Tom.

Rob Millner

Okay. All right, always good to talk to you, Matt. And thank you very much. Enjoyed it.

Matthew Kidman

Thank you.

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