pre-May 2012

A sample of pre-May 2012 content below:

Victoria economy, things aren’t all rosy: cuts 4200 public sector jobs, predicts surplus of $155M, manufacturing base impacted by high dollar, slowing population growth impacting building. Unemployment predicted at 5.75%, up from 4.4% 12 months ago.  “Financial conditions worst in a decade” – Treasurer Kim Wells.

Direct marketing reforms, be aware of client EDM subscriptions: Sweeping changes July 1, tighter regulations of direct marketing, easier for people to obtain and correct information held about them, tightening what information can be sent outside of Australia.  Be aware when implementing EDM integration and inform clients about risks.

Tourism is looking for investment: Hotels in Perth and Sydney at capacity, occupancy rates increased to 75% between 2005 and 2011, new Australian Tourism Investment Guide aimed at Asian investors outlines $42B of “shovel ready” investment opportunities.

Online taking over brick and mortar: Major cosmetic brands Estee Lauder and L’Oreal reducing prices by 20% to 40% on some brands to reduce sales leakage from department stores to online, local prices can be 60% to 100% more than US retail sites. Cosmetics 15% of sales at Myer and David Jones, online penetration at 20%.

Mining facing increased AU costs: Rio Tinto shelving Mt Pleasant NSW mine ($2b expansion, 350 new employees , 10.5m tonnes thermal coal) citing investor pressure to return more cash, high Australian dollar, labour constraints, carbon tax, and  construction inputs.

Universities easier to get into: Federal government targeting to increase enrolments, forcing universities to move away from previous minimum entry requirements.

Blackberry RIM new features: Blackberry touting improved multi-tasking as main feature in the new Blackberry 10 OS, due 2nd half 2012.  Also to include virtual keyboard with improved typing speed, moving keys on screen to match user’s typing style, guessing whole next words based on previous words.  Future phones to allow camera that rewinds photos to one where the person is not blinking or frowning.  RIM year on year sales down 25%.  Last quarter, Blackberry sold 500,000 Playbooks, 11.1m total Blackberry smartphone sales, Apple sold 11.8m iPads, 35.1m iPhones.

Japan quake still around: An estimated 4.8 million tonnes of debris were swept into the ocean during the March 2011 tsunami, 1.5 million tonnes carries away by currents.  Some now hitting US shores, 95% will end up in the north Pacific garbage patch.

Google great at tax: Google produced Australian revenues over $1b, 97% market share in key segments, posted a $3.9m loss in 2011, total income tax expenses $781,471. Tax liability reduced by moving profits through Ireland, Netherlands, and Bermuda.  Employs 650 people in Australia.  Apple pays a tax rate of 9.8% through similar practices.

Are you a submarine builder looking for a job?: Despite military budget cuts and delays in F-35s, AU to build 12 submarines, estimated cost of $36 billion, have a $214m design and engineering package planned.

Harvey Norman sales bad, blames the weather: 44% pretax profit slump in March quarter, first nine months earnings for 2012 down 25%, group sales down 8.1%, same store sales down 7.5%.  Claims perfect storm of deflation from high dollar, discounting due to collapse of WOW Sight & Sound and restructuring of Dick Smith, cautious consumer spending, and poor weather.  Says growth in furniture, appliances and bedding, although AV and IT represent 70% of business.

Super Retail Group growth: planned 70% jump in profits this year, auto and cycle (SuperCheap Auto, Goldcross) same store sales up 3.3%, leisure division (BCF, Rays Outdoors) up 6.9%, Rebel Sport and Amart acquired last year up 3%. Cites store refurbishments, better sourcing, product mix

NZ unemployment rising: Unemployment rises to 6.7%, highest since 2010, exceeds 6% for 3 years, dollar falls lowest in 3 months, annual job growth 0.9% [Chad: Hopefully our iPhone recruitment drive can help?]
Japan nuclear-free – for maintenance: Japan halted sole operating power reactor for maintenance, first time since 1970 that Japan has run without an operating power reactor.  Country’s 50 nuclear plants provided 30% of Japan’s power before 11 March, 2011. Using coal, oil, and gas powered plants in the interim, driving up costs, driving down an economy that has contracted three of the past four years. [CR: Nuclear free, but at what cost?]

US jobs point to another dip: Labour force participation rate (those actively looking for work) fell to 63.6%, lowest since 1981.

Apple wins sanctions on Samsung: Apple wins sanctions against Samsung over failure to produce source code, limiting information Samsung can submit to defend itself. Apple saying Samsung’s 4G and Galaxy Tab 10.1 infringe on patents. [CR: Can you imagine if they had the thought to patent the Internet back in the day?]

Terry White Chemist going small: TWC moving to smaller format stores, joining David Jones and Woolworths. TWC, currently with 160 stores, to open 75 to 80 smaller format stores in next three years.  Average pharmacy turns over $6.5m per year in sales, large store may be up to $12m, small stores $3m.  2.5% same store sales across the chain.

Facebook IPO roadshow: Roadshow for investors started Monday, network valued at $US86B, price target $US28 to $US 35 per share. Download the prospectus here. [CR: Most commentators focused on the fact Zuckerberg wore a hoodie.]

Break up successful for NAB: National Australia Bank gained 650,000 new customers since launching last year’s “Break Up” campaign, will increase planned 2013 marketing budget.

Online advertising paying for the Internet: Online advertising revenue up 19% to $713m in March quarter, scheduled to represent 22% of total ad revenue by end of 2012. Up from 17% growth each in 2010 and 2011.  Search and directories up 21.4%, represent 55.5%. Google accounts for more than 95% of search revenue.  General display represents 21.6%.  Email advertising dropped. Motor vehicles highest spending sector, followed by finance and real estate.  74% of online spend based on CMP (cost per thousand).
No more pirates in Britain: While Australian High Court rejected copyright lobby request to have providers like iiNet police networks for file sharing, the British High Court ordered five leading British ISPs to block access to the Pirate Bay.  Pirate Bay generated $US3m from advertising last October, made 4 million copies of music and films available to 30 million users. 3.7 million British users access the site.

New MasterCard digital wallet service coming end of year: MasterCard launching digital wallet service PayPass Wallet Services, online payment version expected 3rd quarter.  Invitation-only trial to 100 AU consumers and a few retailers, including JB Hi-Fi.  Other launch markets include US, Canada, and Bristain. In-store version which allows people to pay using their smartphone also being developed, pending discussions about whether transaction security should be built into handsets or mobile SIM cards.
David Jones photogenic for web store: David Jones builds a photographic studio in Sydney to photograph and process 90,000 products over three months for its new web store, increasing from current 9,000 products.  Will employ 17 full time photographers and stylists plus 50 part time staff.  Signed a deal with IBM in January for a multi channel ecommerce platform to raise digital sales from 1% to 10%, in partnership with Visual Jazz.  50% of photographs will be on-body (not mannequin), research shows 360% view videos do not boost sales but they do decrease product returns.

Potential impacts from EU economy: China AU’s largest trading partner, China’s growth slowing to three year low based on weakening export demand from China’s larget trading partner, Europe.  Australian dollar may fall below parity in the coming weeks.

Budget recap: Families earning more than $46,355 per year who are eligible to receive the family tax benefit part A will receive an extra $100 per child, or $200 for 2 or more children, on top of current payment, worth up to $2,000 per year, limited to children under 18. Education tax refund replaced with flat Schoolkids bonus of $410 fo rprimary kids and $820 for high school.

Queensland insolvencies up: Rate of business failure up 17% from 2011 March quarter, Queensland accounted for 23%, biggest rise of mainland states.  Highlights Queensland’s two-speed economy, has the best and worst economy, with a large gap between boom and bust.

David Jones management shuffle: David Jones increasing management capacity in strategic planning, financial services, and merchandising.  173 year old company, facing 35% to 40% net drop this year. Admits company erred in only doing strategic planning every 4 years. [CR: 1) Agile applies to executive teams as well; and 2) resource capacity in leadership is critical for growth.]

Toyota comes back: Toyota forecast profit doubles to a 5-year high despite last year’s natural disasters, introducing new models and meeting pent-up demand for government vehicles.  2012 would be the first crisis-free year since 2009. [CR: Good business metaphor for choosing  response as a victim or to overcome.]

Billabong changes: CEO O’Neil fired, replaced by ex-Target managing director. Good quote: “Very few brands don’t go through difficulty in their lives at some point. It’s about how you respond that matters. You must keep the essence of the brand but change the face of it.”

Yum! Brands and Eaton Corp talk China’s rebalance: Yum! Brands (Pizza Hut, KFC) opening 600 sites in China this year, 1500 total outside of US, on the back of increased consumer spending in China.  Hydraulics manufacturer Eaton may not recover in third cover as expected. Consumption up to 77% of GDP growth (51% in 2011) while investment fell. [CR: Saw the same thing in Taiwan and before that Japan, as consumer mentality forces change over successive generations.  One-World economy, here we come.]