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Jeremy Hutton: Milford Asset Management Equities Analyst on Briscoe Group sales dropping · Best of Business

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  Speaker 2: Jeremy Hutton, Milford Asset Management is with me right now. Hey, Jeremy.
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  Speaker 3: Good evening, Heather.
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  Speaker 2: Now, what did you make of the COMMUS Commission clearing
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  Speaker 2: Contact Energies acquisition of Munowere Energy.
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  Speaker 3: It was somewhat surprising news this morning with the COMMAS
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  Speaker 3: Commission approving their acquisition ahead of schedule. So for reference
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  Speaker 3: Contact Energy, they're one of the big four electricity gent
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  Speaker 3: tailors and they applied last year to acquire Manuwa, who
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  Speaker 3: are the fifth largest player in the generation market. So
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  Speaker 3: there is a key difference between generation and the retail market. Now,
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  Speaker 3: a large generator al Gentaylor acquiring a smaller player on
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  Speaker 3: the surface could make people a little bit nervous from
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  Speaker 3: a competition perspective, But the COMMAS Commission went away, they
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  Speaker 3: did their analysis and review and they said today that
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  Speaker 3: they were satisfied that the acquisition is unlikely to lessen
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  Speaker 3: competition in the retail market and then also unlikely to
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  Speaker 3: push up electricity prices for consumers.
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  Speaker 2: So that would imply that increased regulation for the electricity
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  Speaker 2: sectors low.
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  Speaker 3: Yeah, I'd say unlikely. I mean, the pressure is always
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  Speaker 3: going to be on for more regulation, and the Commist
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  Speaker 3: Commission did point out in its release that they still
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  Speaker 3: have some concerns about lack of competition in the market,
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  Speaker 3: and there are still a number of reviews underway which
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  Speaker 3: the Commist Commission is a part of. But under the law,
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  Speaker 3: and under competition law, if the Commission did their analysis
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  Speaker 3: and they believed that the deal wouldn't reduce competition, then
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  Speaker 3: they really have no option but to approve the transaction. Now,
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  Speaker 3: what I will say is that politicians, they're always going
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  Speaker 3: to have a view on this, and we are heading
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  Speaker 3: into an election next year and the sector does become
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  Speaker 3: very political. So I do expect a lot more commentary
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  Speaker 3: on this competition in the run up to the election
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  Speaker 3: next year.
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  Speaker 2: Okay, let's talk about Maine fright now. Mainfrates had a
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  Speaker 2: very start, a strong start to the main mouth. What's
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  Speaker 2: going on.
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  Speaker 3: Yeah, So the main freight share price that had been
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  Speaker 3: hit really hard on fares of lower earnings expectations, and
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  Speaker 3: that's primarily driven from reduced global growth and effectively the
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  Speaker 3: Trump tariff turmoil. Now main freight they released a trading
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  Speaker 3: update on Friday, and it was a pretty emphatic rebuttal
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  Speaker 3: of some of these market expectations of a downgrade. Currently,
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  Speaker 3: they're only seeing impacts in their transpecific freight lane, so
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  Speaker 3: that's the China to US freight lane that we're very
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  Speaker 3: familiar with. In the US division as well, now there's
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  Speaker 3: quite a small part of Main Freight's earning, so it
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  Speaker 3: doesn't move the dial too much. But most importantly their
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  Speaker 3: crown duel divisions, which is Australia and New Zealand, they're
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  Speaker 3: not seeing any impact at the moment, and that was
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  Speaker 3: quite surprising to the market. It took it quite positively
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  Speaker 3: and the share price was up thirteen percent. So if
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  Speaker 3: that contagion doesn't come down to the side of the
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  Speaker 3: world so much and keeps limited to the US, then
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  Speaker 3: the Main Freight share price should continue to be very strong.
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  Speaker 2: And then what about Briscoes. They had to trade update today.
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  Speaker 2: I mean, they had been doing really well, but then
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  Speaker 2: they've taken a has and Q one have they.
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  Speaker 3: Yeah, one of widely perceived as one of New Zealand's
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  Speaker 3: leading retailers, and they reported their start of year sales
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  Speaker 3: numbers and you know, it just continued to highlight to
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  Speaker 3: me how tough the retail market still is in New Zealand.
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  Speaker 3: And then just you know, some of these green shoots
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  Speaker 3: that we've been expecting, you know, continuing to get pushed out,
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  Speaker 3: mainly in their Homewhere division. You know, they saw their
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  Speaker 3: sales down almost five percent versus last year. But most
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  Speaker 3: importantly they just had some confidence in returning or stronger
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  Speaker 3: profits in the second half of this year and their
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  Speaker 3: forward guidance, and I think a lot of other retailers
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  Speaker 3: in New Zealand will be holding out hope for that
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  Speaker 3: as well.
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  Speaker 2: Absolutely, Jeremy, thanks has always this really good to talk
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  Speaker 2: to you that It's Jeremy Hutton, Milford Asset Management.
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