Coles CEO’s $1bn refresh gambit

Original article by Eli Greenblat
The Australian – Page: 17 & 20 : 19-Jun-19

Coles Group has outlined plans to reduce costs by $1bn over the next four years in a bid to arrest the 20 per cent downturn in earnings over the last two years. The proceeds from the cost-cutting program will be redirected to initiatives such as refurbishing stores and enhancing Coles’ online operations. Coles plans to open about 10 new stores in 2020, compared with 21 in 2019. It also intends to refurbish 75 stores in 2020, up from 50 in fiscal 2019. Coles shares closed 3.44 per cent higher at $13.21 on 18 June.

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COLES GROUP LIMITED – ASX COL, COLES SUPERMARKETS AUSTRALIA PTY LTD, WOOLWORTHS GROUP LIMITED – ASX WOW, ALDI STORES SUPERMARKETS PTY LTD, COSTCO WHOLESALE AUSTRALIA PTY LTD, KMART AUSTRALIA LIMITED, TARGET AUSTRALIA PTY LTD, WESFARMERS LIMITED – ASX WES, VERTIUM ASSET MANAGEMENT PTY LTD

Telstra set to axe 10,000 contractors

Original article by James Fernyhough, Max Mason
The Australian Financial Review – Page: 13 & 16 : 5-Jun-19

Telstra CEO Andy Penn has advised that the focus of the telco’s ‘T22’ strategy cost-cutting will shift to its indirect workforce from 2019-20. Telstra boasts about 40,000 indirect workers, who include contractors, call-centre workers and customer service staff. Penn has signalled that the telco will shed about 25 per cent of these workers over the next two years. Telstra unveiled plans in mid-2018 to retrench some 8,000 direct employees over the next several years. The ACTU has accused Telstra of putting profits ahead of people, jobs and service.

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TELSTRA CORPORATION LIMITED – ASX TLS, ACTU, NEW STREET RESEARCH

Foxtel eyeing sport, programming costs

Original article by Max Mason
The Australian Financial Review – Page: 17 : 14-May-19

Sports rights and associated production costs accounted for $800m of Foxtel’s $1.6bn expenditure on programming costs in 2018. The pay-TV group’s total operating expenditure for the calendar year was $2.56bn. Parent company News Corp has indicated that there is potential to reduce spending on "non-marquee" sports content, as well as non-sports programming costs. Foxtel is also reviewing the prices of its programming packages and has not ruled out an increase.

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FOXTEL MANAGEMENT PTY LTD, NEWS CORP AUSTRALIA PTY LTD, NEWS CORPORATION – ASX NWS, KAYO SPORTS, AUSTRALIAN FOOTBALL LEAGUE, NATIONAL RUGBY LEAGUE, RUGBY AUSTRALIA, FOOTBALL FEDERATION AUSTRALIA LIMITED, THE A LEAGUE PTY LTD, THE W LEAGUE, SOCCEROOS, TEN NETWORK HOLDINGS LIMITED

ANZ to cut $1bn in search of growth

Original article by Joyce Moullakis
The Australian – Page: 17 & 22 : 2-May-19

The ANZ Bank has posted a 2018-19 interim cash profit of $3.56bn, which is two per cent higher than previously. The result for the six months to 31 March included provision for $175m worth of remediation charges. CEO Shayne Elliott has flagged further cost-cutting measures in coming years, although he has downplayed talk of further staff cuts and branch closures. Meanwhile, Elliott says the banking sector’s mortgage loan repayment buffer of 7.25 per cent should be revised, given that the cash rate is just 1.5 per cent at present.

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, TRIBECA INVESTMENT PARTNERS PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Myer cuts another 50 jobs as sales fall

Original article by Sue Mitchell
The Australian Financial Review – Page: 19 : 22-Mar-19

Myer Holdings has stressed that customer-facing staff will not be affected by the department store group’s latest job cuts. CEO John King has advised that 50 employees will be retrenched, primarily in store administration, marketing and merchandising roles. Myer is expected to shed further jobs when it begins reducing the amount of space it leases in some of its stores. Myer retrenched 30 executives and managers in August 2018, shortly after King took the helm.

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MYER HOLDINGS LIMITED – ASX MYR, HOUSE OF FRASER HOLDINGS PLC, TOURISM AUSTRALIA PTY LTD, J WALTER THOMPSON AUSTRALIA PTY LTD, OGILVY AUSTRALIA

Nine, Fairfax cuts won’t hit newsrooms

Original article by Max Mason
The Australian Financial Review – Page: 27 : 15-Oct-18

Grant Samuel & Associates has deemed Fairfax Media’s proposed merger with Nine Entertainment Company to be in the best interests of the newspaper publisher’s shareholders. The scheme booklet for the merger indicates that the deal is expected to generate cost synergies of about $50m a year, primarily by combining the sales teams and back-office functions, and by using shared technology platforms. The scheme booklet has emphasised that there are no plans to combine the Fairfax and Nine newsrooms or retrench journalists. However, it concedes that job losses in other areas are likely.

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FAIRFAX MEDIA LIMITED – ASX FXJ, NINE ENTERTAINMENT COMPANY HOLDINGS LIMITED – ASX NEC, GRANT SAMUEL AND ASSOCIATES PTY LTD, STAN ENTERTAINMENT PTY LTD, DOMAIN HOLDINGS AUSTRALIA LIMITED – ASX DHA

Banks urged to slash branches to offset rising costs

Original article by Richard Gluyas
The Australian – Page: 19 : 8-Oct-18

Morgan Stanley argues that Australia’s major banks could generate significant savings by closing bank branches and placing greater emphasis on mobile banking. This is one of four scenarios outlined in a new report; however, Morgan Stanley notes that banks are unlikely to significantly reduce the cost of their networks in the next year, given that the sector is under scrutiny at present. Morgan Stanley adds that the major banks could potentially generate large savings by reviewing their multibrand strategies.

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MORGAN STANLEY AUSTRALIA LIMITED, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Diggers still doing deals as gold price dips

Original article by Matt Chambers
The Australian – Page: 20 : 6-Aug-18

Mergers and acquisitions activity and rising costs are among the issues that are likely to attract debate during the annual Diggers & Dealers mining conference in Kalgoorlie. Justin Osborne of Gold Road Resources expects larger gold producers to continue to pursue exploration deals in the near-term, although he says M&A activity may increase in coming years. Stuart Mathews, the local head of Gold Fields, says it would be open to appropriate acquisitions in the exploration space but its existing assets are its focus at present.

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DIGGERS AND DEALERS FORUM, GOLD ROAD RESOURCES LIMITED – ASX GOR, GOLD FIELDS LIMITED, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG

Fairfax and News deal extends future of print

Original article by Max Mason
The Australian Financial Review – Page: 17 : 19-Jul-18

Fairfax Media and News Corp Australia have struck a landmark deal to share some newspaper printing and distribution facilities in New South Wales and Queensland. Fairfax will print some News Corp publications on its printing presses in North Richmond, while News Corp will in turn print some Fairfax publications. The deal is expected to generate annual cost savings of $A15m for Fairfax, and CEO Greg Hywood says it will help ensure the long-term viability of print newspapers.

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FAIRFAX MEDIA LIMITED – ASX FXJ, NEWS CORP AUSTRALIA PTY LTD, NEWS CORPORATION – ASX NWS, GOOGLE INCORPORATED

Village eyes rebound as salaries, discounts cut

Original article by Jemima Whyte
The Australian Financial Review – Page: 13 & 16 : 11-Jul-18

Village Roadshow will use the proceeds of a $51m right issue to reduce its debt. The new shares will be offered at $1.65 apiece, which represents a discount of 24 per cent to the stock’s most recent trading price. The theme parks and cinemas group has also advised that it will cease offering discounted tickets via resellers, with co-CEO Graham Burke noting that the majority of consumers now buy tickets directly from Village Roadshow. The company will reduce its joint CEOs’ salaries and its directors’ fees as part of a strategy to cut costs.

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VILLAGE ROADSHOW LIMITED – ASX VRL, WARNER BROS MOVIE WORLD ENTERPRISES, SEAWORLD, WET `N’ WILD WATER PARK, TOPGOLF, VILLAGE ROADSHOW CORPORATION LIMITED, ARDENT LEISURE GROUP – ASX AAD, DREAMWORLD, GROUPON AUSTRALIA PTY LTD