Latest / Best of Business / Jeremy Hutton: Milford Asset Management Equities Analyst on the start of the NZX reporting season

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Jeremy Hutton: Milford Asset Management Equities Analyst on the start of the NZX reporting season · Best of Business

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  Speaker 2: And Jeremy Hutton joins me from Milford Acid Management.
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  Speaker 3: Hello, Jeremy, Good evening, Andrew.
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  Speaker 2: Reporting season kicked off this week with Vulcan Steel. So
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  Speaker 2: what are we expecting for the financial results of inzt
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  Speaker 2: X companies? And I tell you we just had the
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  Speaker 2: result from ASB which is a tick up and people
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  Speaker 2: are saying, oh, that might be a suddenly a sprout
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  Speaker 2: of green.
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  Speaker 3: Yeah. Vulcan Steel. They kicked off what will be a
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  Speaker 3: very busy three week period for INSIDEX stock market analysts,
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  Speaker 3: So there should be a lot of newsflow coming out
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  Speaker 3: of New Zealand companies over the next few weeks. So
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  Speaker 3: that'll be really interesting seeing how they're seeing the world
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  Speaker 3: at the moment. Now, this result period does cover the
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  Speaker 3: second half of twenty twenty four, which, unsurprisingly the market
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  Speaker 3: has pretty low expectations for. Now, Vulcan Steel their results
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  Speaker 3: confirmed some of those challenges we're expecting. As a reference
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  Speaker 3: for listen, Vulcan is a steel and aluminum distributor based
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  Speaker 3: in New Zealand and Australia, and their first half net
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  Speaker 3: profit result was down sixty five percent versus last year
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  Speaker 3: and this is now down from around eighty five percent
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  Speaker 3: from the peak times that they had just after COVID.
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  Speaker 2: And this and this is before the steel and eymdium
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  Speaker 2: tariffs that are coming in as well. But Vocus Steel
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  Speaker 2: had some very interesting comments yesterday on their outlook for
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  Speaker 2: twenty five.
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  Speaker 3: Yeah. One of the most interesting aspects in my view
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  Speaker 3: of the reporting season is it is a really good
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  Speaker 3: chance to hear from a variety of New Zealand businesses
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  Speaker 3: on their view of the go forward. So what are
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  Speaker 3: their expectations for twenty twenty five. And Vulcan Steel, as
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  Speaker 3: we know, has been at the really pointy end of
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  Speaker 3: a construction and building activity slowdown and this is a
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  Speaker 3: really important part of the New Zealand economy. But they
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  Speaker 3: finally had some more positive news. So the Vulcan management
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  Speaker 3: team they were much much more optimistic on their view
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  Speaker 3: of the next twelve months. They were talking to tangible
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  Speaker 3: green shoots that they're seeing and better customer orders in
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  Speaker 3: their forward pipeline as well. So finally some good news
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  Speaker 3: for that sector.
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  Speaker 2: To buildings next week, do you think they might say
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  Speaker 2: something similar.
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  Speaker 3: Yeah, I'd say that Fletchers are unlikely to be as positive.
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  Speaker 3: They have all of the market up fairly well for
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  Speaker 3: a tough six month period that's just been and the
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  Speaker 3: business has been through a lot of change recently at
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  Speaker 3: the senior leadership level, so a relatively new CEO, CFO
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  Speaker 3: and the chair also just appointed fairly recently as well,
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  Speaker 3: So they're all getting their feet under the table somewhat.
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  Speaker 3: But the markets won't have that much patience, you know,
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  Speaker 3: they'll be expecting some pretty significant thinking from those senior
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  Speaker 3: leaders on what the go forward plans for the business are.
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  Speaker 3: And further furthermore, the New Zealand Convention Center another delay
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  Speaker 3: last week. It just highlights some of the challenges that
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  Speaker 3: Fletcher's is continuing to work through.
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  Speaker 2: And we're expecting news out of the electricity gent tailors.
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  Speaker 3: Yeah, Contact Energy. They're kicking off the big electricity gent
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  Speaker 3: tailors on Monday, and some of the gentailer results will
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  Speaker 3: be a little soft around the edges, you know, some
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  Speaker 3: of them have been impacted by that very dry end
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  Speaker 3: to the winter in twenty four some of them had
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  Speaker 3: to buy some very expensive gas to keep the market
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  Speaker 3: supplied with electricity. I also expect the gent tailors to
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  Speaker 3: announce a range of renewable projects. It's very important that
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  Speaker 3: they continue to build more generation for the country as
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  Speaker 3: it demands. And then finally, any comments that they have
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  Speaker 3: on system resilience or gas that will be followed very closely,
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  Speaker 3: especially by politicians. They will not be wanting a repeat
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  Speaker 3: of some of the winter stresses that we had last year.
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  Speaker 2: Is I've got some news on that after the news
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  Speaker 2: which is up next Jeremy Hatton from Milford Asset Management.
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  Speaker 2: I thank you so much for your time today.
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