John Linton I got through yesterday before jet lag forced my eyes shut before 8 pm which was a bit of a nuisance. From what I saw and read in the preceding 15 or so hours business has appreciably slowed in the short time we have been away with even the banks talking about 'laying off' "thousands of employees" - just how tough does business have to be for banks to be reducing personnel? I called a few of my 'friends' in similar businesses to ours and the consensus was that business was 'iffy' in their first quarters with September being much slower than expected and worrying instability of order flows. So no comfort there....and likewise when I read the 'local' communications media for the first time in almost a month in any sort of detail. So a cursory assessment is that business is getting tougher in many respects in the Australian communications industry and in Australian business generally.....not entirely unexpected.
Exetel's first quarter will end up above targets thanks to very strong July and August results but September is very weak which is not the 'trend' you like seeing when you are considering some fairly heavy investments over the coming months. One day's 'snapshot' views via a severely jet-lagged mind are not definitive but it would be fair to say that I don't like the look of business conditions as I currently view them. All very well for the simplistic "when the going gets tough......" but things have been very tough for quite some time and give every indication of getting seriously tougher. So it is going to be a very interesting few months and I think it is likely to be a very unpleasant time for many companies in our industry and in Australian business generally.
However, ignoring the simplistic homilies, tough times are much better for smaller companies than large ones and even better for 'hands on managed' companies than board directed ones.....at least that's my observation over the years. Having said that we will need to review our current plans over the next few days to determine just what the recent sales results mean in the longer term and how we may need to re-direct our resources. Overall I don't see any need to change the strategies we have pursued for the past three years as, if anything, they appear even more correct now than when we first decided to pursue them....perhaps I need to reduce the strength of the rose tinting in my lenses? It is certainly not the time to take anything for granted.
Fortunately I think my jet lag is receding and I may be able to more clearly understand what will occur over the next few months. I need to examine the latest ABS figures in more detail and it may be time to have an over generous with the alcohol lunch with my favourite bank manager to get a much more in depth understanding of their views of where things are heading for businesses of our size and type. Then again, perhaps the predictions of our own data base reports will prove correct and Exetel has very little to worry about?
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