What CEOs have been saying during the ASX reporting season

As part of the NAOS investment process, we pay particular attention to the comments made by company CEOs and business leaders in order to gain a greater understanding of the current investment environment and key trends that may be emerging. Below are quotes from the week which in our view detail some of the most important and prominent industry trends and economic factors impacting their businesses.

Equity Capital & Investment Markets

“Computershare maintained market share for its IPOs. But the number of IPOs we processed in the first half of ‘24 compared to ‘23 it was down 50%, half the number of IPOs” Stuart Irving, CEO, Computershare Ltd

“Direct [property] funds had a quiet half as investors and advisors took advantage of higher interest rates to deploy equity into cash products. We expect these flows will return once expectations of rate cuts increase the appeal of property versus term deposits” David Harrison, CEO, Charter Hall Group

Mining & Mining Services

“Customer activity and overall demand remain robust, with increasing iron ore and thermal coal exports and a resilient infrastructure and construction project pipeline” Ryan Stokes, CEO, Seven Group Holdings Ltd

“In the resources sector, the major miners have all announced large multi-year iron ore replacement and sustaining capital cycle projects, resulting in a visible pipeline of new mine developments, expansions, and upgrades” Market Statement, NRW Holdings Ltd

Residential & Home

“Trading in the first 6 weeks of FY '24 second half reflects ongoing growth in new 'for sale' listings in Sydney and Melbourne which continue to lead the market recovery with early signs of improvement in the other states in February” Jason Pellegrino, CEO, Domain

“As expected, we saw the trading environment become more challenging, marked by heightened competitive activity and increased on-floor discounting” Terry Smart, CEO, JB Hi-Fi Ltd

Construction & Infrastructure

“We don't expect to see any material impact from green shoots in the new residential construction setting emerging until calendar year '25.” Peter Wilson, CEO, Reece Ltd

"The second thing that we have been having to manage, as has the industry, has been and that started really in late '21, early '22 and at the input costs whether it's wages, transport costs, other associated labour costs or energy and I think for us, what we're seeing and what we're talking about is that we are seeing a levelling off of those rather large percentage increases that have occurred over the last few years” Mark Irwin, CEO, Adbri Ltd

Media & Advertising

“There seems to be a pretty big lineup of a number of categories, particularly around automotive, banking and finance, that seem to be trying to sort of restart their markets, which have started to sort of slow down…I think any form of positivity in the market will bring money back to our sector. We’re always the first to go and the first to come back” James Warburton, CEO, Seven West Media Ltd

“The Company expects that Out of Home will continue its structural growth, taking revenue share from other media sectors. The Company expects mid to high single digit revenue growth for the industry in CY24. Major advertising agencies have also indicated similar growth expectations for Out of Home in 2024” Market Statement, oOh!media Ltd

Agriculture

“In FY24, we are seeing a return to more normalised crop volumes and a moderation of margins from historically high levels across our business” Robert Spurway, CEO, GrainCorp Ltd

Labour Markets & Childcare

“Volumes slowed slightly more than the usual seasonal trend in the last two months of the 2023 calendar year. It is too early to judge the extent to which this trend will continue post the slowdown for the summer period in ANZ and the Lunar New Year in our Asian markets. We have assumed that absolute ad volumes continue at this lower level throughout the second half, and therefore forecast that our full year revenue will be at the bottom-end of original guidance” Ian Narev, CEO, Seek Ltd

“Demand has encouraging trends in the early part of the year” Pejman Okhovat, CEO, G8 Education Ltd

Utilities

“In a period of heightened market activity, where we saw customer churn reach the highest levels for several years, I am pleased that we have seen growth in our overall customer services number” Damien Nicks, CEO, AGL Energy Ltd

Travel

“The post-COVID boom blip and domestic leisure travel appears to be normalising, but we’re still ahead of pre-COVID levels” Jane Hastings, CEO, EVT Ltd

“The group is seeing second half travel demand remaining strong across the portfolio with intake trends also remaining strong” Robert Marcolina, CFO, Qantas Airways Ltd

Food, Beverage & Hospitality

“There’s no question, [though] that it is a challenging operating environment with pretty competitive market dynamics” Timothy Ford, CEO, Treasury Wine Estates Ltd

“Retail growth was stronger in both markets [ANZ], as consumers responded to cost-of-living pressures by shifting consumption toward in-home dining options. This shift has come at the expense of traditional out-of-home channels such as quick service restaurants and food service” Andrew Reeves, CEO, Inghams Group Ltd

Retail

“I mean we would expect that if the consumer was maybe a bit more confident with their spending, then we will also receive the benefit of that. I don’t think there’s many retailers, pure retailers out there that are enjoying fantastic times in sales at the moment” Glen Robinson, CEO, Beacon Lighting Group Ltd

Discretionary Spending

“Look, based on what we've seen in the first 7 weeks [of CY2024], we are more buoyed by the Australian consumer behaviour than we were over the prior 12 months. It's been our most consistent period… it's the discontinuation of no further rate increases that's created some stability in the Australian -- in the minds of the Australian consumer” Daniel Bracken, CEO, Michel Hill International Ltd

“The last 2 months in November and December, we did notice a significant drop in the inquiry right across the board in all markets…Having said that, we have seen a bounce back in January and February. So, things are looking a little more optimistic than they were, say, in December” David Ahmet, CEO, Motorcycle Holdings Ltd

Consumer Staples

“We're encouraged by this [CY2024] improvement compared to quarter 1 and quarter 2 [of FY24]” Cameron Fox, CEO, Shaver Shop Group Ltd

“Pleasingly for customers, we are also seeing deflation in fresh produce and meat, and continued moderation in packaged inflation” Market Statement, Coles Group Ltd

Healthcare

“Cochlear implant trading conditions continue to be strong across most markets, with an improving trend in adult referral rates in many developed countries” Market Statement, Cochlear Ltd

“Sector dynamics remain positive for Pacific Smiles with several demand factors underpinning the favourable outlook for the group. This includes the rising number of restorative and higher-value services in dentistry. The well-understood demographic shift, that growing and aging population in Australia, comes with increased demand for dental services, which typically do grow as people age. Private health insurance participation rates, which appear to be broadly holding up, notwithstanding the current economic climate” Andrew Vidler, CEO, Pacific Smiles Group Ltd

Freight & Logistics

“Turning to pallet availability, we have seen an industry-wide improvement driven by increased access to lumber and new pallets, as well as inventory optimisation initiatives being undertaken by retailers and manufacturers to reduce the elevated inventory levels built up over the last 2 years” Graham Chipchase, CEO, Brambles Ltd

“Both Qube and Patrick [Terminals] had strong container volumes across all activities through the period, and that was despite an overall decline in container volumes across the industry in the period. It is expected that our container volumes may moderate a little in the second half” Paul Digney, CEO, Qube Holdings Ltd

Telecommunications, Technology & AI

“As we look beyond 2024, the underlying trends of a growing population and increasing data consumption support underlying growth for our business” Iñaki Berroeta, CEO, TPG Telecom Ltd

“[Microsoft] Copilot is real. Copilot’s happening. We've been selling Copilot last 4 weeks. We have become a leading Copilot distributor in Australia and New Zealand…and in the last 4 weeks, it's been tremendous” Vladimir Mitnovetski, COO, Dicker Data Ltd

Manufacturing & Packaging

[The] prices out of the warehouses are coming down, driven by international factors. So, for instance, American buyers out of Asia are drying up, making the Australian market more important for our Asian manufacturers” Ruslan Kogan, CEO, Kogan.com Ltd

“Global market conditions remain challenging, inflationary pressures are now moderating” Brian Lowe, CEO, Orora Ltd

Automotive & Electrification

“We're now seeing demand returning as car owners are attending to both their servicing and repair needs, which should bode well for the Australian market” Mark Bernhard, Interim CEO, Bapcor Ltd

“Our strong performance was supported by increasing demand and availability of Electric Vehicles reflected in novated lease sales being up 25.7% for the period with electric vehicles now accounting for 36.9% of new leases in the period” Robert De Luca, CEO, McMillan Shakespeare Ltd

Banking & Lending

“Firstly, on the environment, the impact of higher rates is clearly still working through the economy. As a result, our report to lending remains dynamic with our appetite to lend to different sectors regularly reviewed… That said, near term, we rate property, retail, hospitality and manufacturing as amber in terms of our lending appetite…We are more positive on agri[culture] and health, and we also see opportunities in professional services.” Joseph Healy, CEO, Judo Bank Ltd

“Although cost-of-living pressures continue to be felt by many Australian households our brokers are reporting an increased level of inquiry, which points to a better residential market as we head into the second half of FY24 and into FY25” David Bailey, CEO, Australian Finance Group Ltd

Financial Services

“Put simply, the impacts of climate change, a reassessment of Australia and New Zealand risk by our global insurance partners, the planning mistakes of the past and now inflation have converged to put the upward pressure on insurance pricing that we are currently experiencing” Steven Johnston, CEO, Suncorp Group Ltd

“Performance in the first 7 weeks of the [2024] year has been consistent with the last 3 months of the calendar year, moderate growth in hospitality and retail, with health and services growing strongly” Jonathan Davey, CEO, Tyro Payments Ltd