Job ads grow, but not in newspapers. Another solid job ads survey report from ANZ (trending higher now for 15 months) for the internet, but not newspapers. A year or so ago, newspapers were responsible for around 5% of monthly job ads in Australi; last month it was 3% and falling, according to ANZ. Internet job ads rose 1.5% month-on-month, while printed newspaper ads dropped 6.7% for the month. Overall job ad growth was 1.3% in January, up 10% on the preceding year.
“The pace of deterioration in newspaper job ads appears to have stepped up in recent months,” said ANZ. But the bank’s analysts cautioned that “this series is particularly volatile and makes up only 3 per cent of overall ANZ job ads”. If anything, the report once again underlines one of the great errors in Australian media management — the failure of then Fairfax CEO Fred Hilmer to buy a stake in Seek back in 2003. Newspaper ads totalled 2822 in January, according to the ANZ survey. Just dividing that figure between the nine major capital city papers, there were around 300 in each of the month. January is a low month because of the holidays, but in January, 2013, there were 4758 jobs advertised in the major papers, according to the ANZ. So you do the maths.
But Seek’s Paul Bassat reckons if Fairfax had have gotten hold of a swag of Seek, it might not have been a success. “In some ways Fred Hilmer has been unfairly maligned, because had the newspapers come through with the sort of deal that James Packer did, for a quarter of the business, we would have said no. And the reason for that is with James, we knew his only motivation was to create a successful business, whereas [with] Fairfax we would have been concerned their motivation was to slow us down and stop the impact on print,” he told The Australian Financial Review last April. In other words, the dead hand of Fairfax would have choked Seek, and allowed someone else (such as Monster of the US) to grab the market leadership in internet-based job ads. — Glenn Dyer
Not everyone’s a fan of the job ads survey. The job ads survey has pushed higher for 15 consecutive months (and up 10% for the year to January), but not everyone’s a big fan of their predictive ability when it comes to the jobs data from the Australian Bureau of Statistics. Take Westpac economist Justin Smirk, who was quoted on the Fairfax website late yesterday as saying, “Westpac has noted before the many issues with ANZ jobs ads and the problems with how the internet series is composed. We thus use job ads cautiously as a leading indicator of employment.” Hissss. And Westpac’s consumer sentiment survey is out tomorrow, so will ANZ economists return fire? Perhaps, especially seeing as how the survey’s results seem to be driven, at times, by the feelings of voters for either party rather than consumers generally. — Glenn Dyer
The Sage of Omaha, to write and write and write. On February 28, fans and investors with a thing for the words of Warren Buffett and his annual letters to Berkshire Hathaway shareholders (and the global investment community) will get three letters for the price of one, along with the quarterly and annual reports. Both he and his co-founder Charlie Munger are planning to write individual letters to shareholders to mark Berkshire Hawthaway’s golden anniversary under the control of both men. Buffett and Munger are independently writing their views of Berkshire’s 50 years of life under their control — and what they expect for the next five decades. According to US media reports, neither man will change a word of the other’s commentary. There will be a lot of interest from investors and other Buffett-watchers about what he and Munger say about the succession at Berkshire Hathaway, rather than the future investment strategy (which won’t change all that much). Both men are well over 80 (the two have a combined age of 175), and the succession question is starting to consume more and attention. — Glenn Dyer
Analysts moan. The Financial Times had an odd story yesterday (and in the AFR this morning) — investment analysts who cover Berkshire Hathaway want more disclosure from Buffett, especially about his huge insurance businesses. The FT said five of the six analysts who follow Berkshire want to see changes and more information. (Yes, just six analysts cover one of the largest companies in the US, worth US$370 billion, compared to the 20 who follow the smaller General Electric).
Seeing as Buffett ignores investment banks and analysts and never uses them in deals, the moans are pretty self-interested. In fact, Buffett told the FT that he had never followed an analysts’ recommendations since he started buying shares when he was 11 years old. The FT said Buffett’s aim was ensure that every shareholder has the same level of information at the same time, rather than allowing analysts and large institutional investors additional access. If only other companies, large and small, thought the same way. His annual meeting in May will have him and Charlie Munger answer questions for six hours from three journalists, three investment analysts, and shareholders. And to think a lot of Australian boards hate annual meetings and treat shareholders with contempt. Certainly Pearson, the UK owners of the FT and Fairfax Media (which owns the AFR) do not treat their shareholders with anywhere near the same generosity as Buffett does at the annual meeting. — Glenn Dyer
Fangs for the fries, or would you like a molar with that burger? It’s amazing what a tooth can do to McDonald’s sales. Earlier last month, McDonald’s was hit by what it now calls “broad-based consumer perception issues” with a tooth found in fries in Osaka, Japan, last August and plastic bits were found in a chocolate sundae in December in Fukushima Prefecture. These were the latest in a series of food-safety woes in Japan and China in the past couple of years. So it was no wonder store sales have been falling in the company’s Asian markets for the past eight months. But in January, the slide deepened with sales in the company’s Asia Pacific, Middle East and African markets dropping 12.6% from January, 2014, when they were up 5.4% from January 2013. And the bulk of that fall came in China and Japan.
In fact, Goldman Sachs reckons sales in Japan (49.9% owned by Macca’s) fell 40% in January due to food-safety problems and a continuing shortage of potatoes keep french fries in short supply (that shortage is due to industrial disputes in West Coast ports where American spuds are shipped to Japan and the rest of Asia. They are now going by air from Gulf Ports). But there’s light at the end of the queue for Macca’s — the company says an investigation of the tooth showed it hadn’t been fried, but also that none of the staff in the outlet had reported losing a chopper. So … that’s OK, then … maybe? The chopper didn’t make it into the manufacturing process, which means it was fresh, unlike a lot of the stuff at Macca’s. — Glenn Dyer
But it’s not just Macca’s. The entire fast food/carbonated soda sector is in trouble. Macca’s big rival, Yum Brands, which owns the KFC, Taco bell and Pizza Hut chains. Its chains have hit trouble in China and says it will take longer than expected to recover — meaning weak profits. And tonight in the US, the Coca-Cola Company is expected to report weak fourth-quarter figures tonight and perhaps its worst trading year for a decade as the love affair with the company’s big brands (Coke, etc) fade over continuing concerns about the healthiness of its products. In Australia, Coca-Cola Amatil next Tuesday reports its worst yearly result for years as the new management seeks to clean up the mess left behind by former management (and the dozy board). There will be a lot of talk of new directions, new strategies, etc, but the bottom line will be the struggle to sell consumers on the increasingly dubious idea that they need to drink more carbonated drinks and pay more for that and for bottled water. — Glenn Dyer
Crikey is committed to hosting lively discussions. Help us keep the conversation useful, interesting and welcoming. We aim to publish comments quickly in the interest of promoting robust conversation, but we’re a small team and we deploy filters to protect against legal risk. Occasionally your comment may be held up while we review, but we’re working as fast as we can to keep the conversation rolling.
The Crikey comment section is members-only content. Please subscribe to leave a comment.
The Crikey comment section is members-only content. Please login to leave a comment.