CostCo, Kathmandu Deep Dive, Albo makes Petrol Crisis Worse, RBA’s Credit Card Surcharge Disgrace, Waymo Love and Victorian Government Gets Something Right

23:54Well, that's crazy. Microsoft's not crazy. I think 23 for a business of Microsoft's brand scale. You're basically almost saying that it's office franchises, Windows franchises in trouble at that level. But it's not growing, Microsoft. I think it's a great business as you do, but it's not growing. It's growing, what, 14%, 15 % EPS a year. That's pretty good growth. 14%, 15 % growth at 23 multiples. And 25 % as a multiple is pretty good. This is a PE. This is not a revenue multiple. This is a price earning. This is a net profit after tax multiple. We see these revenue multiples of 30%, 40%, 50%.

24:29I think it's EPS is growing 15%, isn't it? So that's the P. I mean, you're paying 25 times earnings. It's five-year compound EPS growth is 18%, which is outstanding. I know, but you're not getting it. Like, you can say that seems like a good price for Microsoft. It's not a bargain. It's not like it's growing 25%. You look at Meta, so I think Meta is much more interesting. It's growing faster than the rest of them, and it's on a lower PE than the rest of them. So that, to me, is like more interesting. Yeah, Meta is on a 19 PE, which is really low. Meta is a brand advertising business. Microsoft's a productivity business.

25:04They're very completely different. Everybody lumps them in the same sort of tech category, but they're completely different businesses. I think your mind has been altered by this crazy bull market for so long because it's not 25 times for Microsoft that's crazy. It's 50 times for Walmart and Costco that's crazy. And I know you know that, but like it doesn't mean that Microsoft – I'm not disagreeing with that. I'm not disagreeing with that. I'm just saying Microsoft 23 times – like the average multiple for the market over the forever is like 17, 18 times. That includes sort of slow growth, old shitty businesses.

25:34Microsoft's a great business. You look at competitive powers, they've basically got them all pretty much, forget counter positioning. They've got massive scale, massive brand, massive switching costs. Like they've got everything and they're trading on a 23 and they're growing 18 % over five years, like really strong growth. They're trading on a 23 times multiple. That feels really low. All right, great. I want to tell you something else that is going to get you worked up. So we haven't really like talked about a key issue in the media in Australia that has happened in the past few weeks, but I thought I'd raise it because both of us love the Financial Review and we think it's a terrific newspaper and we think it's like one of the voice of reason newspapers.

26:16Like obviously it's got good financial content, but also its position on social and political issues are very centrist as a general rule. And I think that like the editor transition of the paper has gone very smoothly. From Stutch to Chessel. That's right. And I think James Jessel's done a really good job and just continued the tradition, right? Yeah, I think he's good. And so how do you then explain the cartoons that are being run that we could only call anti-Semitic cartoons? And it's particularly heartbreaking for me because when the first of these came out, this was a few years ago, there was like a whole uproar member, Josh Frydenberg, was kind of spoke out on it as well.

26:56Like I gave, not only did I give the cartoonist the benefit of the doubt, But I reached out to him and had a bit of a conversation with him about over email. And he really assured me that it was all unintentional and it was just a mistake. And I found that plausible. And I publicly defended him. And now the latest cartoon, which is a week old now, but I'm just raising this because I just don't understand what's going on. The latest cartoon had Trump or something running a missile and yelling Torah, Torah, Torah, which is like the Jewish Bible. I mean, can you imagine if someone created a cartoon today and someone was yelling Koran, Koran Koran they need to put security around that building right and so I just can't understand what is going on with this run of just blatantly anti-semitic cartoons that have moved from from criticism of Israel and Israeli policy which I think has been very balanced in the fin review to this kind of just terrible terrible visual content and so you might disagree with how I feel about it, but I'm interested in your thoughts on that.

28:00It just seems incongruous to me for that publication. I saw James Hessel did sort of make a comment about the cartoon you're talking about. He didn't apologise for it, but he somewhat apologised for it. There's been three of them now, though. How many apologies can you make? I thought the other ones were in the Sydney Morning Herald. It wasn't the really bad one, which was essentially the old trope of Jews holding up, underground holding up the politicians. That seemed the worst. That wasn't in the Fin, though, I don't think. No, but I'm not shocked. When it's in the Sydney Morning Herald or The Age, let's be honest, no longer can we be shocked about cartoons we perceive as anti-Semitic.

28:36And by the way, that has a long history of The Age. Michael Loenig's cartoon created a cartoon that was, I don't even want to call it anti-Semitic. It was so bad that it ended up in an Iranian regime exhibition for their Holocaust denial-like festival. His cartoon ended up in there. He's dead. He is thankfully dead now. I don't know. He was fired from the age. He might also be dead. I think he is. I think he's dead. I think he died recently. I think this is the first one that the Finn has done. I think just in Finn's defense, I think the other ones are all in the SMH and the age. I clearly don't like these cartoons.

29:14I don't know. Does anybody even look at them? Yes, definitely. If the Jewish lobby didn't make a big fuss out of it, would people even – I feel like we're strides on these. No, I don't agree with you on this. I don't know why they have these cartoons. I find cartoons always, pretty much always unfunny. Like I find them try hard. There's something from bygone era that nobody I don't think even looks at. Like I wish we just stopped talking about them. We have totally opposite views to this whole thing. I think they can often be great. The ones in the Australian are pretty hilarious often. They can be great.

29:42I think that the good political cartoonists, they are incredible at encapsulating an entire issue in an image and like making it humorous. And I actually do find the guy that writes for The Fin often creates really good cartoons. Like I think it's a high quality political satirist. So you and I don't agree on the medium. Yeah. Yeah. If they got rid of cartoons, I wouldn't lose. I wouldn't even notice. I was more. I care that little about cartoons. Why don't we put it? Why don't you do one of your famous LinkedIn polls, which you haven't done for a long time, and about should cartoons continue?

30:15Forget the anti-Semitism. Just like, does anybody actually give a shit about these things? All right. I'll do that. Mike, are you a cartoon guy? I've actually always thought the same thing as you, Adam, where it's like who actually reads them and analyzes them to this level? It's because we're Gen Z and - You're not Gen Z. It's a few generations, I think. You're not Gen Z and I'm not a boomer. What are we? You're - Millennial. Notionally millennium acting like a boomer with a boomer personality. Isn't Gen Z and millennial the same thing? Isn't Gen Z and millennial the same thing? I mean, I think you've just discredited yourself on this topic entirely with that question.

30:50millennials are gen y us oh gen y sorry gen y us gen y's we we care not about the gens us gen y's don't even know what gen is and what millennials are all right well anyway i thought it would i'll put that i'm going to put that poll up and we'll see because i'll be quite surprised if you're right about that and that will be very interesting to me yeah the people will speak uh let's move on speaking of politics we saw albanese's absolute waste of time three minute address last week where He tried to calm the nation, but he just ended up pissing off the nation. This is a guy who's just not a wartime PM.

31:23But to make matters worse, if that sort of three minutes of theatre wasn't bad enough, the Albanese government committed yet another horrific own goal last week when Anthony Albanese announced that the government would slash fuel excise by 50%. As the fantastic Patrick James wrote in Rampartum, so Joe's found a couple recently, anyone who studied Economics 101 knows that the worst way to address the supply shortage is by stimulating more demand. It's the economic equivalent of trying to put out a bushfire by adding oxygen and fanning the flames. What's more, the failure to curb demand by higher prices may indeed exacerbate existing supply shortages.

31:56In short, the market here was doing its job pretty well. Last week before the excise was cut, traffic on the roads was much lower than I'd noticed it historically. And as soon as the excise was cut, traffic levels basically reverted back to normal. So this is, of course, the exact opposite to what the much less moronic administration is doing globally, where policymakers are using emergency tools to curb energy use or where sky-high prices are forcing consumers to stop buying. Bloomberg reported in some corners of the world, the war's ripple effects are already appearing. In South Korea, residents are being told to take faster showers.

32:29In Laos, students are adjusting to a three-day school schedule. In Thailand, short-sleeved shirts are recommended to curb air conditioning usage in the office. In the Philippines, civil servants are taking the stairs in lieu of the elevator. In Egyptians, the malls have a 9 p.m. curfew. In Australia, Anthony Albanese is doing his best to create a fuel supply shortage by making petrol cheaper. Is this the dumbest government we've ever had or have we just lost the plot completely? It's a tricky situation, isn't it? Because basically, you keep coming back to this idea that politicians have got a long-term view on what's going to be good.

33:04And I keep saying to you, they just want to be elected. And so if you have very high fuel prices, like the fuel prices, I don't know, are so high, I don't know if you've noticed this, that some of the petrol stations, their numbers don't even go that high. Like they're going to like - They're not four digits. They're not$10 a litre. I know. But like, I just think they probably don't have threes. You know what I mean? Like, I don't know. But some of them are out. Some of them have run out of fuel. Yeah. A couple are out. Oh, a very small percentage. But that's my point. If you want to have less shortages, then increase the price to get an equilibrium.

33:40And we saw that happening. I'm in agreement with you about that. But what I'm saying is that if you go and do those things that you just quoted overseas, then Australians are going to blame you for all sorts of things that you're almost certainly guilty of. Like, for example, not making sure there's enough fuel in the country if we have supply disruption. I'm not even suggesting we do that. I'm saying that's what people overseas are doing. We're doing the exact opposite, which makes it worse. But you know what I would have done? I would have let the price drift up significantly. And for certain people, like let's call it a nurse or a firefighter or someone who needs their car to get to work and is an essential worker, maybe give them a discount on fuel somehow.

34:18Well, how are you going to do that? We did it during COVID. They managed to do it during COVID. They let essential workers do different stuff to non-essentials. It can't be that hard. Well, I've got news for you. What qualified as an essential worker during COVID was so broad, you basically have to get a piece of paper signed. Every online business I was involved with qualified as essential work. It wasn't that broad. There's a lot of people who weren't leaving the house, like millions of people who weren't. Yes, there were people who were potentially taking the piss a bit, but the vast majority of people weren't.

34:48Well, the thing is, I'm not saying we should definitely do this, by the way. I'd rather let the market take its course. But if you have to do something and you don't want to have nurses not being able to drive to work. So I think there's certain people who should be protected. But why are we discounting fuel for people with these massive gas guzzling caravans and massive cars so they can drive around Australia? It's just ridiculous. I should have started by saying we're completely in agreement. I assumed you understood that we were in agreement that this is absolutely crazy, but it's kind of why is it happening?

35:16So politically, some people that are struggling to make ends meet in elbows, you know, key seats will say, yeah, he's a good bloke. He brought down our price of our fuel, right? And And that's good for getting reelected, even though the election's far away. But you just want to stay popular, right? You don't want people to bear grudges against you coming up to the next election. And so there's other issues going on. For example, in Sydney, there's a beautiful new metro. Like this is out of this world, okay? I keep telling you, you've got to catch this metro. You'll look at this thing and you'll say, this is what a real government in a real state builds.

35:53No one argues against it. It's incredible. But having said that, they're trying to open another part of the metro now. And so this long weekend, Easter weekend in Sydney, the entire metro is shut down for testing in a fuel crisis. Like the number one thing to do would be make sure your public transport's working. That's number one, right? And so I think there's all sorts of crazy stuff that is just not connected to reality that's going on with governments around Australia. This is maybe the dumbest of it, stimulating demand in a supply-constrained environment. I agree with you. But I think this country in general, governments in general, are trying to avoid taking this problem seriously.

36:35I said last week. I think it was last week. It's all blurs. They're making it worse. They're not simply taking it. They're literally adding fuel to the fight. It is so dumb. I put that in the not taking it seriously. Not taking it seriously. I'm saying it's just ignoring it and pretending it doesn't exist. This is like making it worse. The other issue though is that, remember I said last week or the week before, whatever it was, that we're going to have like jet fuel constrained problems? Sure it is. I don't know if you've noticed, but there's been tons of cancellations in the last week of flights.

37:04Well, I haven't flown. So I'm flying tomorrow. So I'll find out soon enough. Are you flying overseas? I'm flying to Sydney, then to Vancouver. Okay. So I think international flights, you'll be okay. But domestic flights between Melbourne and Sydney, there have been tons of cancellations. And of course, they're not saying we're cancelling it so that we fill seats. I actually think my mail is that that's probably more demand-driven than supplies. I think a lot of corporates aren't travelling. And I think the airlines are in the bid. I think both airlines are absolutely bleeding cash. And in a bid to stop that cash bleed, they're just cancelling flights to run higher loads.

37:42I don't think that's related to fuel directly, to be honest. Yeah, I'm agreeing with you. But what I'm saying is I think there's also some pressure being applied to try to run full planes because there's not an endless supply of jet fuel. Yeah, it's a combination. And that's what I think is going on. One of my colleagues, let's call him Marilyn, through to the UK yesterday via Qatar. And I was in touch with him through the flight. He went with his family. He said it was great. The flight was relatively empty. like not completely empty, not COVID empty, but I think it was - I wonder why, what could have driven that decision making?

38:16Yeah, obviously, obviously, but obviously it's quite cheap, I think. And Eddie had, I think are doing 50 % offares, but like in terms of safety, which is obviously the key concern, he said it was like Qatar was real quiet, but operating pretty normally, like didn't sort of notice too much different. You understand there's no problem when things go right. That is not what people are worried about. People worry about what happens when things go wrong. Well, I'm not suggesting everybody goes and flies to the Middle East today, but I'm saying that it's like, you know people in Israel more than me.

38:45Like, Israelis live with this all the time. I think Australians live such a closeted life that any kind of modicum of risk we run for the hills when a lot of people are canceling the Middle East and flights probably could take them. There hasn't been any planes been taken down. There was a couple of small incidences early on in the conflict, but generally it's actually been relatively tepid in Qatar and Abu Dhabi. I hear you, but I will say even out of Israel, like they are flying planes, but I think there's a limit to 60 passengers per plane at the moment. And so like it's not back to normal by any stretch, but I take your point.

39:19I think Virgin cancelled all of their co-chairs with Qatar. Virgin have. They're wet leases. Yeah, they have. They're wet leases. Okay. You can explain what a wet lease is. That's probably interesting to people. A wet lease is basically where you use – effectively Virgin don't run the planes. So Qatar runs the planes. I think it could even be Qatar livery on there. I'm not fully sure about that, but there's different – there's a dry lease, there's a wet lease, and there's different types. But essentially, it's Qatar's plane, it's Qatar's crew, it's Qatar's everything, and Virgin effectively sells it.

39:46Yeah. And so can Qatar sell tickets on that flight as well, or only Virgin can sell tickets on that flight? No, I think just Virgin. I think just Virgin. Actually, Qatar – no, sorry. Qatar can code share sell it, like Virgin can code share sell Qatar flights, and so can Qantas, funnily enough, because of One World. But yeah, no, it's slightly different. Essentially, I think mainly the financial risk gets transferred. So if the seats don't get sold, that's effectively on Virgin versus on Qatar, if it's Qatari-named flight. On that note, we'll go to a super quick break, back with some more exciting stories in a moment.

40:27And we're back. and had some great listener feedback on our segment last week on autonomous driving. And a couple of really smart friends of the pod messaged me, basically within 24 hours, both listened to the pod. And I'll just go through it. I think it's pretty insightful. I said both these guys have been in the US and San Fran specifically. And one was Dan Monheat, who I think you know, who's a really good marketer. And then Alex Lam, who's a partner at EY, who's a super smart guy. so both both really smart people whose views i think are really relevant uh so i think dan said it's the future bring it on here in australia have been getting around la in a waymo for the last couple of days at the prospect of now getting in a smelly uber with a rude potentially dangerous driver for the same price feels completely archaic the most interesting thing hasn't been the way they obey the road rules but how they navigate all the 50 50 situations that come up every drive take this orange light i go or you go pick up this passenger 30 meters from the planned pickup spot or by blocking a driveway.

41:23They somehow feel completely safe, but are also more assertive drivers than I would have imagined. We need these in Australia ASAP. And Alex said, we're staying in San Francisco a couple of weeks ago, meeting with some Bay Area companies. I took my first Waymo and I'm sold. The driving decisions I made were safe, conservative, and smooth. It was spotting hazards before I did. I sat in the front for most trips like a gleeful nerd and was calmly reacting well in the future. Rooftop LIDAR helps. Saw old ladies and gaggles of drunk teenagers using it felt way safer than Uber. So two very similar reviews from two super smart people.

41:55Why isn't Australia getting these here now? It's crazy. How would you get them? Well, you peg Waymo to do it. You give Waymo some funding. There's plenty of ways to do it. Victoria's paying 50 million bucks or whatever, $15 million to get an NFL game here that nobody really wants. I think we can find some money for Waymo. Yeah, well, I'll say two things. One is the NFL game will be full. So that's for the start. and that is, you know, NFL games. Obviously, I'm biased towards the NFL, but NFL games or sports games in general, that's what's it called, bread and circuses, right? That's how governments – I just keep going back to the same point.

42:29That's how governments get – like there's an election coming. You need to get re-elected. I hope this government doesn't get re-elected in Victoria. I'm not sure NFL is going to be the difference, to be honest. Well, 100 ,000 people will pack into the MCG for that game. Will they? At 10 a.m. on a weekday? I think so. I'm an NFL foul. I like NFL. I was in Boston for six months and went every week. Can I do a rare instance and give the Victorian government a very rare pat on the back? This could be a first. Yeah, cool. Mike's just collapsed. Thud, yeah. Just going back to our last conversation, Victorian government getting rid of public transport costs for the next month I actually think is a pretty good call.

43:07We talked about that. We talked about the Albanese government last week removing the excise, which we thought was going to be stupid, but I think actually encouraging public transport and getting people back on, trying to break that habit of people driving and especially combine with high petrol prices. I think this is actually a really great thing and we need our public, we've spent so much money on public transport, it's half empty still. We need people on it. Do you want me to argue with you about that or you just want me to accept that? I'm happy to just accept it. No, argue. Absolutely. It's not called the agreeable thing.

43:37So let's say what is enticing you into public transport is that it's cheaper than driving. That's effectively what making it free does. Now let's think about the driver. So everyone, generally speaking, that drives is going to prefer driving to public transport. They've already made that decision. And now what we're seeing is the price of driving is rising. And so if the price of driving is rising and it becomes too expensive for people, then they will switch to public transport because public transport is cheaper and you won't have to provide discounts. And if people say it's not expensive, like it's not too expensive for me to keep driving, then they don't want to switch to public transport because they prefer driving.

44:21That's why they do it in the first place. And making it free does this one thing. It kind of reduces the bar for where people would swap to say the difference in price is sufficiently large for me to sacrifice driving and to go and catch public transport. And my issue is I'm not sure how many additional people you'll get by making it free versus yet another thing that we're borrowing foreign money to pay for as a state in Victoria. Of all the things the Victorian government pays for and they pay for a lot of ridiculous things, this is the least ridiculous. Yeah, you've been desensitized to the spending.

44:55That's why. My mail is that the trains and trams are completely full the day after they announced this. So it's anecdotal and it was a couple of people at work who said it, but I think it was powerful to get people back on public transport. And I think it's, when you combine that with the more, like people just drive, people just driving too much. Like compared to pre-COVID, people driving everywhere all the time. Remember the trains used to be full pre-COVID. Now the trains are half empty. And they built this new, they spent tens of billion dollars on the existing rail line in Victoria. They're building the SRL, which is a joke.

45:26But even before that, they spent 15 billion plus on this, the ANZAC, that new line that nobody uses. I think they need to get people back on. Not everything can be free, especially in a state where you're no longer spending taxpayers' money. You're spending borrowed money and paying interest on it. Like, where does it end? So I take your point. I get it, but I think there's some things that – we're happy to fund hospitals. We're happy to fund roads. There's some things we're happy to fund. I think in an inverted commas fuel crisis, when you've got more on prime ministers adding fuel to the fire, pardon the pun, I think the decision – I think the Tasmanian government did the same.

46:03I think reducing, getting people on public transport, I think is great. And as much as I don't, like for me to compliment the Victorian government, that's pretty rare. Well, I think once again, it's like the theme of this podcast. You might think it's great that they did this. I probably think it's a bit less great. But the bottom line is they don't care about you or me or anyone. They care about getting reelected. And they just saw a window to spend more borrowed money to go and buy some votes. It's just all different forms of bribery. That's my issue with this. Moving on, credit card customers risk being slugged with higher fees and interest rates by the major banks as they scramble to plug a revenue hole caused by the RBA decision to end surcharging on debit and credit cards.

46:42This was announced last week. The practice will now end in six months with the central bank estimating inverted commas is going to save consumers$1.6 billion a year. But what it actually means is consumers will pay higher credit card fees and higher interest rates, get less generous frequent flyer rewards, lose things like insurance as the banks respond to the RBA by cutting the cap on interchange fees. Alan Mache, Group Country Manager Visa, noted what everybody other than the RBA knows, that annual credit card fees and interest rates are going to go up. The RBA said it would reduce the cap on interchange fees for credit cards charged by the bank to merchants from 0.8 % to 0.3 % of the value transaction, which will cost banks about$60 million annually.

47:21Jim Chalmers, the embattled treasurer, said these changes will take the pressure off consumers and businesses and will help with the cost of living. As always, he is wrong. Michelle Bullock, the embattled RBA governor, said surcharging non-local works is intended. These changes will make credit card payments simpler for consumers and help businesses get better value from their payment services. But, of course, Wes Lambert, who's a very good head of the Restaurant and Cafe Association, said, we expect menu prices will increase October 1, and for any business doesn't pass cust on, that profit will be hit.

47:50Summers will now pay$5.10 for a coffee that used to cost them$5.08 and the biggest losers are cash payers. Adi, I think you know my views on this monstrosity. What are your views? What's crazy about this is, are there not enough problems to be solved in the world? Have we run out of problems that we have to go and manufacture solutions for a problem that nobody had? No one had a problem here. No one was turning around. you could mostly still pay cash. The law is if you can't have an alternative to a credit card, you can't charge a surcharge anyway. There were lots of options. Absolutely no one is going to have cheaper prices as a result of this.

48:29The banks are not going to absorb$660 million of reduced income, nor should they. We want strong banks in Australia. This is completely ridiculous. Actually, it's hard to believe how dumb this whole thing is. and like I know I'm channeling you but like I almost can't believe this. I know, you sound so good. Because like it's – I just don't understand. Remember that show Nobody Wants This? Yes. It's like nobody wants this. Literally nobody wants this. Except for Jim Chalmers and Michelle Bourne. Like some people don't care and some people think it's terrible but no one is saying thank goodness this has been brought in and I don't know if you remember this.

49:08You probably do. It used to be illegal to charge surcharges for credit cards. And then they brought it in. There was a lot of fighting and a lot of arguing and a lot of work. And it was a big deal, right? And then there were these credit card surcharges. And then that was the reality. We went through all of this pain to bring them in. And now we're in a world where it probably made a marginally positive difference to restaurants and other retailers to be able to charge a surcharge. and definitely, you know who I think the only company that must love this is Amex, right? Is that right? It's good for Amex.

49:41Well, Amex has different rails. Amex is included in this, but I'm not like, Amex don't like being on their own with big fees. So Amex becomes, if they keep their fees, which is anywhere between sort of zero and 3%, they become that outlier. So I'm not sure, I haven't spoken to Amex, I'm not sure this is great for them, But didn't they hate everyone saying it's 1 % or 1.5 % for Visa and MasterCard and 2.5 % for Amex? That was not good for them, was it? Well, isn't it worse now? Now they're saying it's 0 % versus 2%. So it's actually a bigger gap potentially. But you're getting points. Amex is the only ones who can really, other than our new Luxury Scopes credit card coming, which will be the most generous on market.

50:22But Amex will be the only ones other than us who will be able to give points. So it's interesting. It becomes very much the premium card, right? Because, you know, the online retailers, they're not just online that I'm involved with anymore, right? The vertically integrated retailers, mostly they're not charging credit card fees and surcharges. So what that means is there was still the option of not charging it. It wasn't compulsory. And so you could not charge it or you could charge it. And then the whole system seemed to work fine. And now what they're saying is no one can charge it. And so all this law does is removes optionality.

51:02And I just keep coming back to the same point, which is there is some disease that seems to have infected left-leaning governments, which is we just don't trust people to make their own decisions. And we want to control as much of people's behavior as we possibly can because they can't be trusted. And this is a classic example of that. There was no overwhelming view that people were being taken advantage of. I remember I told you I once went to the Ace Hotel in Sydney and they charged me a surcharge for a credit card without having any other form of payment available. And I thought that's illegal, right?

51:37And I thought about complaining about that. And then in the end, my view was I would have paid with a credit card anyway. So whatever. I may be aware of that surcharge. I just – I actually feel strongly about this because of just the – like, I don't know, the infantilization of the population by these governments not being trusted to be able to make their own choices. This Labor government has really lost the plot. Like, unfortunately, they haven't got other options. But this is so ridiculous. Like, where we're real-life – so, we have – we do charge credit card fees. They don't actually recover our complete costs.

52:12They get about half our costs back. So, we're not – it's not a profit centre for us. It's a loss center for us, but we recover some of it. We don't charge for debit cards, so we cop the whole debit card. And it's much smaller than credit, but whatever, 30 bips, we cop that. And we offer PID and PID too. So there's like multiple free options. There's three free options, and there's a credit card option, which we subsidize. Yet people, by and large, use credit cards. They're happy to pay a surcharge because they want the benefits, which is insurance, which is freaking flyer points, which is the ability to charge it back.

52:42There's a bunch of things that you get with a credit card. you don't get with a pay to or pay ID or a debit card. The people are happy to pay the whatever the 80 dibs for, whatever it is. And the government said, no market. You consumers don't know what you're doing. We're going to overrule what you guys want. We're going to make you pay in a way you can't control now, which is through higher fees and all this other stuff. So they've actually made it worse for everybody and worse for, worse literally everybody loses from this. As you said, it's got to be up there with the dumbest policies. I'll tell you who doesn't lose.

53:13A company like Daily Blooms, to the best of my knowledge, doesn't charge credit card fees. And some of their competitors do. And now their creditors won't be able to charge fees. And so they're going to have to lift prices to maintain margin. And so it'll be great optionality for any company that wasn't charging credit card fees before, because all their competitors are going to increase prices and they then have the option of increasing prices or not. And I think almost certainly the net outcome of this endeavor will be to make things more expensive for the consumer. That's my guess. And the other beneficiaries are like the big supermarkets, and we're obviously defending them earlier.

53:50But they have incredible deals with the banks and the card schemes. They pay almost nothing for that. Their merchant fee is close to zero. So they can – which is why they don't charge merchant fees to consumers because they don't basically have any themselves. So they can afford to – they don't have a merchant fee to remove versus like a – call it an IGA, a local IGA that has a much higher fee has to pass some of that on. Now they're disadvantaged again. So it's – again, it's just favoring these big businesses. This is a Labor government that's meant to be helping the little guy and it's yet again helping the big guy.

54:21I just don't even understand where this came from. I mean I know you want to finish this segment but like do you even know where this came from? Like where did this brainwave emanate from? I thought it was Jim Chalmers and Matt Common got together and came up with it. And then Matt Common, to his credit, realized it was a stupid idea and tried to backtrack. But the horse had bolted, unfortunately. So, Jim Chalmers and Matt Common are very close, apparently. And then it feels like – remember when Kevin Rudd came up with the – this is what the two polls – Kevin Rudd coming up with a ridiculous NBN on a napkin on the way back from some flight somewhere.

54:54and Luke Dick-Pick Sayers and Dan Andrews coming up with the$100 billion SRL together with the second cocktail so Luke can get a bunch of fees. So this is up there with those three sort of idiotic policy on the run decisions. They're all horrendously bad. This is what happens when you have poorly thought out policy with conflicted private interest groups and idiot politicians. Do you think that this will get any votes for the government? No, absolutely not. And Jim Chalmers is really confirming himself as one of the worst treasurers in modern – he ironically worked for Paul Keating, probably the best treasurer.

55:28And what a contrast. Paul Keating, just a man of steel, didn't care in the short term what people thought, just did what was mostly what was right. And you've got Jim Chalmers the opposite. Jim Chalmers needs to look at his old boss and see what he would have done. So it's all very ridiculous in my view. Let's move on to our favorite deep dive section, of course, brought to our friends at Terram Capital. We had obviously Scott on last week and he was fantastic as always. Terium acquired technology companies that grow sustainably over decades. Thinking of selling, give Scott and Terium a call at terium.capital.com.

55:59I wanted to deep dive into a business called KMD Brands, which is the retailer behind Ripcurl and Katmandu, which was forced to raise money at a steep discount to its share price last week. And its very well-respected chairman, David Kirk, resigned shortly after. Shares in the New Zealand and ASX listed company hadn't traded since last week when it was forced into this emergency capital raise, has since started trading again. On Tuesday, KMD said sales had increased by 7.3 % to 505 million New Zealand in the six months of Jan 31. But discounting did slightly hurt margins, leaving the company with a loss of New Zealand 13 million.

56:37The share offer last week was just$0.06, which was a 70 % discount to its last traded price of$0.19.5 ahead of its suspension. KMD shares traded an all-time high of$1.60 just before COVID, February 2020. It fell to 40 cents early in COVID, recovered to$1 in November 2021, but has been tough going since then. And obviously, shares have dropped down to 7 cents, valuing only New Zealand$62 million, which is basically$50 million Aussie, which is crazy given it owns not just Katmandu, but also Rip Curl, which is a fantastic brand. KMD had dismissed other proposals, including a plan to demerge the Rip Curl brand and merge it with a rival Surf label.

57:16AFR reported last week that California-based Stokehouse, led by a former billbonging executive called Paul Nord, put forward a plan to spin off Rip Curl into a separate company and merge with its own business. KMD disclosed that after he rejected the merger plan, Stokehouse indicated that he could offer to buy Rip Curl for more than$110 million, which is basically double the value of Kathmandu now. So this is a really strange situation. For what is a couple of great brands, Adir, we'd love to get your take on what's going on here. Well, I've got to give some disclosures first, which is the CEO, Brent Scrimshaw, was a former director of Catapult and I like him a lot and I'm somewhat pretty well acquainted with him and have a relationship with him, so keep that in mind.

57:59And he's pretty new. He took over from Xavier Simonet, didn't he, who's gone somewhere else. He's inherited this business. And he had been a director of Kathmandu before that and he was good on the Catapult board. I can say very positive things about him. He's a former very senior executive at Nike. Like he ran a big chunk of Nike, basically. He's got their own problems. Not him. Yeah, exactly. Not Brent's cause, obviously. He hasn't been there for a while. And David Kirk, my few interactions with him have all been very, very positive. So I just want to flag that. David Kirk's been a really good executive and chairman.

58:40He was obviously Fairfax. And he runs Ballador, which is kind of like the listed VC fund. He's done a great job there, I think. And just to show how tight everything is in the corporate world, so one of the guys that worked at Ballador, who was Bevan Shields, who's now gone to One Ventures. Oh, really? Yeah. So Bevan was kind of the original corp dev and investor relations guy, Catapult. So it's like a small world, right? And so I feel very positive about these leaders. I haven't been following this company super closely beyond just being interested because Brent is running it. On the positive side of this, I mean, obviously, you know, there's a business that still did last year a billion dollars of sales.

59:24It's not an inconsequential business. And it's growing as well. And has a 50 % gross profit margin, right? It's growing a little bit. But, like, the margin is 55%, 56%. So, like, it's not a – it's a real business, right? And if you go into – like, I went into a catmint. I don't buy from these brands, to be honest with you. But if you go into a Kathmandu store, then they're refurbishing and redesigning them. I went into one, I think I mentioned this on the pod like a few months ago. It looked really good. There were a lot of people in it. Like, I think that there's a lot of things that are very positive about this business.

59:59I mean, the biggest negative is it had to do an emergency capital raising. That's the biggest negative about this business. And it's a bad time to do a capital raising. Goldman Sachs did it for them. Obviously, I know the Goldman Sachs guys very well. I don't know anything on the inside of this. Well, let's talk about the capital. I don't know if you want to talk about capital raising first or call it the underlying business. Well, you can talk about the underlying business because you're probably more across the underlying business than I am. I mean, you're right. Like, you know, it is a business that is still growing.

1:00:29And like in your take on this, like what's gone wrong with this business that it's been left in this position? Well, I'm not an insider in this business. We kind of look at the sort of public presentations they've done. I think the team there, so your friends there, my friend Grant's there. He's an amazing operator. So there's some really good people in this business at senior level. So I don't think it's a management issue. I think they inherited maybe a business that a couple of years ago was probably on the way down. They're rapidly trying to turn it around. But if you look at the business, it's really Kathmandu and Rip Curl.

1:00:59There's another business that's called Oboz, which I don't know as much about, which is significantly smaller. So forget about Oboz. But if you look at – let's look at Kathmandu first. So Katmandu grew sales in the first half this year versus her first half last year, 12%, which is great sales growth. And it's improved its EBIT loss. So it lost$13 million EBITDA last year. It's down to 2.4%. So it's basically back to a close to a break-even business on the back of decent sales growth. If you look at sales, it's sort of hit$194 million in the first half of FY23, then drastically dropped. and sort of building back since then.

1:01:37So overall, the sales growth seems okay. It's EBITDA. It's sort of, if you look at the last five, I'm looking at this presentation, the last five years, the last five halves, sorry, it's lost money in all but one half, although that loss has now shrunk significantly. So if you go back to first half 2022, it lost 18 million. Now that loss is 2.4 million. So that's significantly reduced losses. So it feels like Kathmandu is very stable now and it's caught close to break even, you're not going to get overly excited about that. But it shouldn't be worth, even if you attribute a zero valuation to Kathmandu, which I think is a bit harsh because it's still a$400 million business.

1:02:16But even if you gave that zero value, you've still got Rip Curl, which is a pretty strong brand still. Interesting that the Rip Curl history is a really interesting one. It was founded in the late 60s by a couple of guys in Torquay. I think that it was Doug Warwick and Brian Singer. And there was also the guy who, Alan Green who started Quicksilver also used to work with them. So all these great surf brands and Billabong as well as Australian all started in Australia around the same time. And eventually it sold, I think Rip Curl sold for like 300 million bucks or something like that to KMD brands.

1:02:49So it was like notionally a pretty valuable business. So I think KMD was a much bigger business. So you've got this Rip Curl business. So look at Rip Curl, it grew 4.6%. So growth wasn't incredible, but it did grow and also reduced its store count from$177 to$170. So if you look at the same store, that growth would have been better. The problem with Rip Curl is its underlying EBITDA has really dropped to the last five halves. So it made$37 million first half of 2023, then$27, then$23, then$20. So it's still obviously quite profitable. It makes real EBIT, but its profit's been dropping. So that is certainly a worry.

1:03:30but even if you look at if you so let's assume that katmandu is worth zero which i think is too harsh but let's just take that highly conservative approach you've still got a business that makes call it 15 to 20 million bucks ebit annually and the whole business is only worth 60 million bucks so like something here as in basically something it doesn't make sense so look at i wanted to correlate that to cash flows yeah i mean one of the can i say one of the issues on the profit and loss definitely that would have stressed people out a bit from 24 to 25 is that although the um the uh the revenue didn't grow much they did have a bit of an increase in sales and marketing in general and administrative expenses and so the business became kind of a worse margin business essentially and i think that that does tend to worry investors when you see both above the line sales and marketing costs and below the line general admin rise, not inconsequentially in dollar terms with no increase in sales numbers or no material increase.

1:04:33I think that would have left investors asking questions. And as you said, I think a lot of that's inherited from previous management. It takes time to turn businesses around. If you look at their cash flow, by my calculation, they're basically a cash neutral business. No, I thought it was slightly positive, but it's a bit confusing because of the whole lease thing. It's a neutral business. Like they have like their last, their most recent, I'm looking at 2025, okay? And so it's a bit old, yeah? But if you look at the end of 2025, they had 120, I'm going to round these numbers, 125 mil inflows from operating activities.

1:05:09But let's keep in mind that doesn't include lease liabilities, generally speaking on the cash flow. Which were 90, that was 93. Which were 93 mil, right? And so I just do this pretty simply. Like effectively, there was 125 mil of like net cash flow from operating and then maybe 25 odd mil of outflows from investment activities like intangible acquisition and plant and equipment type stuff. And so you're left with about 100 and like 93 of that went to lease liability. Yeah, but also there's payments to – there's income tax of 10 million and there's interest of 27 in that as well. So obviously interest is interest.

1:05:46No, that's a good point. That's a good point. That's a good point. And so, yeah, there may be a bit, you're right, they're a bit positive. And so I don't really understand how they ended up in a situation where they had to do this emergency raising, which I know you're going to get to. But like the underlying business here is they've got a bit of a tired business in Kathmandu that they're trying to turn around, launching new stores, et cetera. That might work, it might not. But I think they've got a guy in charge of this business who's got a good retail pedigree, as much of a chance of making it work as anyone else.

1:06:15And then you've got a rip curl business, which I think is more exciting business, right? And all of this is being valued at pretty close to zero. Well, I'm looking at the balance sheet from, this is the last balance sheet, the last full balance sheet I can see, which is July last year. They have the only liability, the current liabilities are trade payables, fine, because there's obviously receivables. They've got lease liabilities. That's part of our operators. I forget that. That's just that weird accounting treatment. They have no real current liabilities. They had no current liabilities, but their non-current liabilities includes, you know, just under$100 million of debt.

1:06:50Yeah. 87 million. Yeah, 87 in debt, but that's non-current and some deferred tax as well, which could be worrying. Yeah. That's non-current as well. So if you look at – obviously, these guys aren't fools. I wouldn't have raised capital if I didn't really need to at this discounted level. But, like, I think the lack of cash – clearly buying Rip Curl has put them in a – whoever bought Rip Curl at this business probably didn't do a great job. So it's really put the business in a sort of difficult position now. But let's say they had to do this raise because they needed the cash because they only had$34 million in cash and that may have been running down.

1:07:25And you said the capital markets are terrible at the moment. So to get this away, they have to discount$0.07, which is$60 million New Zealand,$50 million Aussie. This feels like it should be at least$100 million business. And that's probably being pretty harsh. like you could i'm pretty sure you get katmandu to break even pretty quickly based on this trajectory so katmandu let's even if you give katmandu a zero a zero zero vowel which i think is hard i think katmandu should be worth at least 50 then how do you value this rib curl business it's still making 20 million bucks a year or be it the profit's shrinking uh it's got to be at least 100 i would have thought well you know what the valuation is because someone's just offered you$120 million for it.

1:08:07I think this is a market that's not efficient. I'm surprised. You'd think somebody would just try and take this out. This feels like it's a$20 bill sitting on the floor waiting to be picked up. Well, the problem is you have to figure out what to do with Kathmandu. These are the problems with just buying this thing as it is. You've got, as of again, I don't know, did they release updated financials to the market as part of this raising yeah that so they have the that was the original um the first half 26 snapshot which we talked about before so sales up 7.3 percent um i think you talked about as well ebitda margin um yeah was a little bit lower but not but the balance sheet was not updated right so ebitda margin was bad so ebitda and you say ebitda is a bit ridiculous because there's leases and stuff but ebitda was 63 so it's trading on one times ebitda multiple but you just said the answer to the issues yourself you said the answer yeah so it's if you look at its ebit it's ebit for the first half was 1.7 million loss so it's and they had an empat of 13.1 million so there's obviously interest in there but this is basically a break-even business before it's interest payments they also if you look at the cash flow on the next page like if you go to page whatever it is after one after balance sheet they give a break up a cap flow so the cash flow so net empat of loss of this is for the half 13.1 million loss in empat um 21.3 change in working capitals and then they had non-cash of 60 so i'm not sure what that non-cash is um that could have been the raise uh but like that's that's probably the problem so the working capital is going backwards which i think is when you factor in the empat loss which included interest and then you have capex of 13 million i think they were just running out of cash really urgently through yeah the working capital problems.

1:09:52I think that's right. And so this is what I'm saying to you. I think the problem of just saying, yeah, this is an obvious buy and to take it out, because I do agree with your overall view of this business. But the thing is this, you basically end up buying a hundred odd million dollars of net debt on the business that on the metrics is actually improving. The metrics that they released as their update for the half year were improving metrics. So the business is getting better and almost wiped out their loss. I mean, the NPAT obviously is a big loss, but like almost wiped out their EBIT loss. But the challenge that you've got if you buy this is you've got a business that is not exactly flying.

1:10:33It's in the middle of a turnaround. It's got$100 million of net debt. It's got a bit of a cash crunch that's going on, which is why they had to raise money. And then you've got a predator that's just come along and offered$120 million for the jewel in the crown, which is twice the value that the business is currently trading on as an equity value. However, if you sell that, you're probably never going to be able to turn this thing around because that is one of the key hopes that you've got this Rip Curl business. I'm not surprised that they pushed back against that. Yeah. So if you've got$110 for Rip Curl, you pay the debt back, you've got$30 million.

1:11:11So you've got net cash then. So you've got Kathmandu and$60 million cash. Like I'd almost hang on these guys being able to turn Kathmandu into profitable business. Maybe. But like the thing is, you've got 100 mil of net debt. And if you get 110 mil for it, you're saying you're not going to pay down all the debt. Is that what you're saying? No. How do you get 110 mil of net debt? The net debt is like 90 mil of debt and the 30 mil of cash. Oh, you know what's happened? I was looking at the old balance sheet. That's right. So net debt's blown out$42 million the last six months somehow. I don't know how that happened.

1:11:46So what you've got is you've got a situation where even if you took the whole$100 million and you paid down a chunk of debt or whatever, you'd end up with a new net debt. But you'd still have some cash. You'd have some cash, correct? You'd have some cash. I think what's most amazing is this is a business with$274 million of inventories. Inventory, yeah. I mean, it is a billion-dollar sales business, right? So that's not a ridiculous number, but that is where, I mean, their working capital is basically tied up in quarter of a billion dollars of inventory. And so I think the people that bought into this raising got a bargain.

1:12:24And I think that what seems to have happened - That's the same. The market is - we can all buy it for the same price today on the market. Basically, it's stuck at that price. And so I think this is essentially a bit of a bet. And the bet is between are they going to be able to stop burning cash and needing to do another emergency raising before they turn this thing around, plus or minus selling rip curl. And the reason it's trading at this price, just watching from the outside, is you saw Goldman Sachs. You could watch this play out in the episodes in the financial review. Like they went out to raise money.

1:13:01They started off talking about 20 cents. Then it dragged. Then there were all some negative stuff that hit it. And obviously people in this market were just, they think cash is king again. And everyone wants to just put their money into gold. And so it was hard for them to raise money. So yeah, I think this is a bet, but I'm not sure. It's a bet on survival. It's like the karma conversation we had last week. It's a bet on survival. If this business survives. Correct. It's a bet on survival. And 60 million New Zealand valuations, crazy low. If it doesn't survive, it doesn't survive. You've done your dough.

1:13:37So we're not, obviously, this is not investment advice podcast. We're just analyzing the business. But it feels like with this great management team, great brands, the challenge they have is this sort of business model of stores, holding inventory, having to have expensive people in the stores, and obviously shutting stores for this reason. It's just a tough model. Like you really need scale. you need to be a mecca or a great sort of operator and these guys are good operators and rip curl is a good brand katmandu is still a pretty decent brand albeit there's competition well but consumer confidence in 2026 is going to be bad like i think that's pretty clear like this is not going to be an easy year for retail mike i've got a question for you have you been into a katmandu store in the last year i think the last time i would have been in a katmandu store was maybe 10 years ago And how about a Rip Curl store?

1:14:28I don't know if I've ever been into a Rip Curl store. Have you, Adam, been to either of those? I've never been to either. Yeah, I think I went to a Kathmandu store to buy like a jacket, a warm coat for my daughter when she was like 12 or something. And so, and Rip Curl, I don't really buy from Rip Curl. So I don't, it's interesting to know, like we're obviously not the target market or if we are, that's why they're in trouble. But like, who is this business targeting? I think you're right. I think Katmandu used to be kind of a – back when Jan Cameron ran it, it was kind of a cool outdoorsy sort of brand competing against like the Mac Packs and all that stuff.

1:15:03Now I think its problem is it's now competing against the likes of Uniqlo and some like really – like Uniqlo is an incredible business, got some really technical staff. So I think that's who they can – and I don't know if you want to be competing against them, which is part of the problem. Wasn't Katmandu like meant to be the Australian slash New Zealand version of Patagonia? Yeah. Wasn't that kind of the vibe that it gave? Yeah, absolutely. And Patagonia is a terrific business. Well, remember that was the famous sort of not-for-profit, essentially. It kind of was run for – it was the original B Corp.

1:15:32Yeah. And so I think Jan Cameron had similar values when she built Kathmandu. She's obviously got herself into a – I mean, her life post-Katmandu has been in the newspapers endlessly, right? Like all – Difficult. Yeah. She sold for a huge profit at Kathmandu. She sold almost like the absolute high, I think, didn't she? And so I think that Kathmandu had these values. and I think people bought into the values and it was also a different time in Australian retail without this huge number of international brands everywhere like the Uniqlo's that you mentioned. And the challenge is going to be, I think, with Kathmandu, once again finding where its brand fits in the market and having something that brings people in to buy when it's not reliant on discounting.

1:16:19And I think that's a challenge. And like, can Brent turn that around? Well, I'll give them a good chance of turning it around, but it's not an easy thing to do. Whereas Rip Curl to me feels like it still has some purity of brand. Like when I look at, I mean, I actually think Billabong maybe has sold out its brand a bit more than Rip Curl has. Rip Curl feels like it's still, and I met the original, like the early, I mean, I'd had a lot to do with Rip Curl and to do with Catapult actually as it happens. Well, not a lot to do, but some to do. And I met the guy, I think his name is Michael Daly. He was the CEO out in Torquay.

1:16:49And I went out to his offices and I had a whole lot of chats with him because they were doing some interesting wearables around surfing that I found quite interesting. And that business really had the – we're still on the beach out in Torquay. The office was not glamorous. And it really had the vibe of authenticity. And I think Ripkel might still have that vibe. So Xavier Simonet, who probably, I'm not sure if it was his fault, but he was there. He basically ran Kathmandu from 2015. No, yeah, 2015 to 2021. He was actually running the business and then went obviously into KMD. He left 2021. He then worked for the Australian government at Austrade, bizarrely, for four years.

1:17:29Now he's CEO of Collins Foods, which is the billion dollar KFC owner. And that's, he took over there in November. and sort of had a, so that's sort of dropped in the last, in the last sort of four months, that's down about 30%. Training on a really high PE though. So this is interesting. The guy who you probably argue caused a lot of these issues wound up with a pretty good role at Collins Foods, interestingly. Well, I don't, like I really haven't looked into it, but like whatever the truth might be, his reputation has not suffered for anything that's going on now at KMD. I think the thing that people forget about retail is this.

1:18:04Retail is in the detail. what that means is that you can look at spreadsheets and you can look at all sorts of stuff and yes you've got to get the margins right in retail that's absolutely true but ultimately you're selling to a customer and that customer wants to needs to feel connected to your brand or want to wants to buy the product or whatever it might be and that involves that's what was soli was so good at soliloo like being in the actual stores and feeling the customer and understanding what it is that they want to buy and it feels to me that ultimately that is what Catman do is trying to do with these store refurbishments.

1:18:38They're trying to go back to a time when they had something unique and differentiated that the customer was prepared to pay for. And I think if they get there, they'll succeed. And if they don't, they won't. And it's just as simple as that, in my view. I think, like, broadly speaking, there aren't too many retailers I'd like to own. I think Mecca is clearly one. There's some amazing retailers. Costco is another one, albeit not this price. But I think you look at the main problem these guys have and I actually think it's the value in this business is actually pretty good now because it's so cheap but I think that the general difficulty with this business is it's just got a lot of competition it doesn't have it's a billion dollars but it's not huge scale it kind of lacks any kind of long-term competitive advantage that said I still think it's a great but I think these guys are really good operators and will do a pretty good job with it so given its depressed price it feels on sale pardon the pun but I think the longer term prognosis of this It's just a really hard business.

1:19:35So you're saying like a more sophisticated version of my kind of long-winded comments, which are there's not much long-term competitive differentiation in retail. Sometimes people can have it in product, but mostly they have it in brand. And it is brand equity that drives your ability to have pricing power and reduced acquisition. And I think that Kathmandu, and obviously get forgiveness, And I think Kathmandu has been drawing down on that forgiveness for its brand equity for a long period of time. And the well might be running pretty dry now. And it has to reinvigorate that brand and get people excited about its brand again and find its space to get back its pricing power and its acquisition advantage.

1:20:23And I think that is what you see in the financials. In the financials, what you see is diminishing gross margins, a classic sign of a lack of pricing power. Some of that's market related, but that's a classic sign of a lack of pricing power. And what you also see is escalating sales and marketing expenses on the back of minimal revenue growth. That's a lack of acquisition advantage. And I think ultimately, this is the encapsulation of the problem this brand takes. And the bet you need to make with Karma is, can they get the market to be excited enough so that they can raise the cash at a good enough valuation to get to the promised land?

1:20:57Like that's the bet you're making. and the bet you're making with this business is can they find a way to reinvigorate brand equity and get back some pricing power and reduce CAC or is this business just kind of in this very slow downward brand spiral yeah that's a great summary on that we'll wrap it up here another great episode thank you our dear thank you Mike thank you listeners as always our smartest listeners in Australia don't forget sending your questions for our ask us anything episode We love hearing your questions. We get some amazing questions from our great listeners. So keep them coming, please.

1:21:32And we'll look forward to speaking to everybody on Saturday. And we can say in Melbourne, enjoy your free public transport. In Sydney, enjoy the fact that your metro is now switched back on by the time you hear this. And in Brisbane, enjoy everything because the weather is probably fantastic. And you get to go to the Gold Coast and the Sunshine Coast. Going all right, Ben. Thanks, everyone. See you soon.

1:21:57Thank you.