ASX News Live | ASX Up 0.35%; Kogan, Regis Resources, Pointsbet Feature

Nick Scali held its annual general meeting on Thursday, providing a brief trading update for the four months ending October 2022.

Sales revenue rose 74% on the same period in the prior year to $194 million. The prior corresponding period predated NCK’s acquisition of Plush.

Group margin rose 1.8% on the second half of FY22 to 61.3%. The furniture retailer expects its gross margin to continue to improve over FY23 ‘with further realisation of the Plush synergies’.

Based on current delivery levels, NCK expects net profit after tax for the first half of FY23 to be in the range of $56 million to $59 million — 57% to 66% above 1H22 of $35.6 million .

While Nick Scali expects a strong improvement in 1H23 net profit, it did not feel comfortable in providing guidance for the full FY23.

Nick Scali said uncertainty on future near term levels of demand occluded FY23 performance visibility.

 

For a few weeks now, we’ve been talking pretty intensely about the ‘Age of Scarcity’.

This idea that we’re on the cusp of a huge materials shortage is the brainchild of our new commodities expert, James Cooper. If you haven’t already checked out his full thoughts on the matter, you can do so here.

Here’s the thing, though, I am firmly of the opinion that any ‘scarcity’ will be transient.

I’m sure plenty of savvy investors, like James, will make a lot of money from that transiency, but I don’t expect it to last. After all, humanity has faced resource shortages before, and we’ll continue to face them in the future. What we’re best at, as a species, is innovating and adapting via new solutions.

Even if the planet truly does run out of oil, copper, or gold — there is still an alternative.

All we have to do is look up…

Despite what many may call a pipe dream, travelling to other planets, asteroids, and celestial bodies for their materials will eventually occur. It is simply a matter of when, not if it will happen, in my view.

And what may surprise you is that it could happen a lot sooner than you think.\

Last week, you may have heard that NASA launched a new rocket to the Moon. Known as Artemis 1, this unmanned craft was sent to test the capabilities of its new Orion spacecraft.

What is special about this mission, though, is that it will be the first of many. The entire Artemis program has been built around a collective goal to get man back on the Moon. And this time, NASA doesn’t just plan to visit, they’re looking to colonise…

https://www.moneymorning.com.au/20221124/space-mining-is-coming-sooner-than-you-might-expect.html

Fintech Tyro (ASX:TYR) said it is tracking toward the top end of all operating metrics guided for in October. In October, TYR said it expected to reduce operating leverage from 85% to 82% while increasing EBITDA to a range of $28 million to $34 million (up from a range of $23 million to $29 million).

The payments solutions firm also provided a trading update to October 2022.

• Transaction value rose 52% on the prior corresponding period to $14 billion
  • Hospitality vertical transaction value rose 87% on the prior corresponding period
• Over the first four months of FY23, TYR averaged 1,440 new merchant applications per month
  • Total merchant count now at 67,205
• Gross profit year to date to October 2022 rose 57% to $61.9 million

However, TYR’s new chief executive Jonathan Davey said the company is ‘tempering expectations’:

“We are however tempering our expectations. We remain cautious of the broader macro-economic environment and the impact of interest rate increases to spending in Tyro’s key hospitality and retail verticals. We must also flawlessly execute key initiatives that are critical for the realisation of operating expense targets. Although the headcount reductions of the past month have presented a challenging period for our team members, this process, and our renewed focus on the delivery of critical initiatives has provided clarity to our team, and our shareholders, on my ambitions for a leaner, more focused Tyro. My vision is that we return to our fintech roots, we are an innovator who uses technology to deliver faster, more secure, more reliable, customer focused payment and banking services.”

TYR shares are down 50% over the past 12 months but have rallied recently. Tyro is up 50% in the last six months.

Wagering stock Pointsbet (ASX:PBH) has launched online sports betting operations in the US state of Maryland.

Maryland is PBH’s 13th online sports betting operation in the US.

Pointsbet USA chief executive Johnny Aitken said:

“As one of the few sportsbooks to be on the starting line in Maryland, PointsBet will be delivering sports fans in the state a new way to take part in the action – whether that’s for the NFL, NBA, or NHL. And we’re particularly happy to launch just as the 2022 World Cup is starting and showing Maryland bettors why we’re known as the home of live betting through our new suite of Soccer Lightning Bet markets.”

Pointsbet is talking up the potential of the football World Cup in Qatar on the US betting sector, saying it is the first World Cup since sports betting became mainstream in the US.

Year to date, PBH shares are down 70%.

Online retailer Kogan (ASX:KGN) said year to date trading — covering July 2022 through October 2022 — was marked by ‘subdued sales activity in eCommerce’ while also suffering negatively from comparisons to abnormal sales during the COVID-19 year.

Year to date gross sales were 38% lower at $267.6 million while adjusted EBITDA was down 104% to an EBITDA loss of $0.5 million.

Kogan continued to sell-through its excess inventory, resulting in a positive cash position during the period but a gross profit reduction of 41% to $41.1 million. ‘Significant discounts’ affected gross profit, with the retailer expecting the ‘vast majority’ of inventory sell-through to end ‘by early calendar 2023.’

The retailer said it currently has $20.1 million net cash, seeing a ‘continued improvement in operating costs as inventory levels reduce further.’

 

In an investment memo released this week, Oaktree Capital founder Howard Marks addressed the question: what really matters or should matter for investors?

Marks approached the question by first considering what shouldn’t matter to investors. Short-termism was one.

• ‘Most investors can’t do a superior job of predicting short-term phenomena like these.
• ‘Thus, they shouldn’t put much stock in opinions on these subjects (theirs or those of others).
• ‘They’re unlikely to make major changes in their portfolios in response to these opinions.
• ‘The changes they do make are unlikely to be consistently right.
• ‘Thus, these aren’t the things that matter.’

Marks thinks focusing on the next one or two years is not worthwhile. Neither is gazing into the macroeconomic crystal ball:

‘Further, in the short term, security prices are highly susceptible to random and exogenous events that can swamp the impact of fundamental events. Macro events and the ups and downs of companies’ near-term fortunes are unpredictable and not necessarily indicative of – or relevant to – companies’ long-term prospects. So little attention should be paid to them. For example, companies often deliberately reduce current earnings by investing in the future of their businesses; thus, low reported earnings can imply high future earnings, not continued low earnings. To know the difference, you have to have an in-depth understanding of the company.’

Howard Marks: 'As I’ve said before, the average of all investors’ thinking produces market prices and, obviously, average performance. Asymmetry can only be demonstrated by the relatively few people with superior skill and insight.'https://t.co/nuFk0fksBi

— Fat Tail Daily (@FatTailDaily) November 23, 2022

Oil tankers are spending more time on water as Russia’s invasion of Ukraine upended normal shipping routes, propping up the price of oil even as markets see a bleak economic outlook ahead.

As the Wall Street Journal reported:

Economic fallout from the war in Ukraine has severed many of the short oil- and petroleum-product trading routes across the Baltic and North seas. Now, as Europe scrambles to find new suppliers and Russia looks to send exports elsewhere, tankers are spending more time on water before reaching their destinations. Many shipments now spend five times longer in transit to refineries or wholesalers than they would have before the conflict, tanker operators and analysts say. The upshot is that fewer vessels are available in a global fleet that has little prospect of quickly expanding in size, a boon for shipping companies.

Average tankers have earned more than $40,000 a day for four months, their longest such stretch in 15 years, according to London-based shipbroker Clarksons. The spot price for modernized ships known as very large crude carriers, which can stretch more than three football fields in length and carry two million barrels of oil, surpassed $115,100 a day on Nov. 18. That is an 11-fold increase from that class of ship’s average daily rate last year.

 

In its latest meeting minutes, US Federal Reserve officials considered the possibility of their restrictive monetary policy triggering a recession.

Fed officials acknowledged the ‘possibility that the economy would enter a recession sometime over the next year as almost as likely as the baseline’ projection of weak growth:

‘With inflation remaining stubbornly high, the staff continued to view the risks to the inflation projection as skewed to the upside. For real activity, sluggish growth in real private domestic spending, a deteriorating global outlook, and tightening financial conditions were all seen as salient downside risks to the projection for real activity; in addition, the possibility that a persistent reduction in inflation could require a greater-than-assumed amount of tightening in financial conditions was seen as another downside risk. The staff, therefore, continued to judge that the risks to the baseline projection for real activity were skewed to the downside and viewed the possibility that the economy would enter a recession sometime over the next year as almost as likely as the baseline.’

Most US Federal Reserve officials disclosed a preference to slow the pace of interest rate hikes, as shown in the minutes for their meeting earlier this month when the central bank passed a 75 basis points hike.

‘A substantial majority of participants judged that a slowing in the pace of increase would soon be appropriate,’ the meeting minutes said.

The minutes further contained:

‘A slower pace in these circumstances would better allow the Committee to assess progress toward its goals of maximum employment and price stability. The uncertain lags and magnitudes associated with the effects of monetary policy actions on economic activity and inflation were among the reasons cited regarding why such an assessment was important. A few participants commented that slowing the pace of increase could reduce the risk of instability in the financial system. A few other participants noted that, before slowing the pace of policy rate increases, it could be advantageous to wait until the stance of policy was more clearly in restrictive territory and there were more concrete signs that inflation pressures were receding significantly.’