1 00:00:05,850 --> 00:00:08,550 Sean Aylmer: Welcome to the Fear & Greed Business Interview. I'm Sean Aylmer. 2 00:00:08,580 --> 00:00:11,008 Sean Aylmer: We've had a lot of economic news lately, all pointing 3 00:00:11,010 --> 00:00:13,650 Sean Aylmer: to an eventual interest rate cut, but with a big 4 00:00:13,650 --> 00:00:17,009 Sean Aylmer: question mark over when that will be. Today, I wanted 5 00:00:17,010 --> 00:00:20,130 Sean Aylmer: to look at what it means for equities. What's going 6 00:00:20,130 --> 00:00:22,500 Sean Aylmer: to happen to the ASX 200 for the rest of this 7 00:00:22,500 --> 00:00:25,980 Sean Aylmer: year, particularly given how well it's gone so far, and 8 00:00:25,980 --> 00:00:27,780 Sean Aylmer: what sectors to keep an eye on. Remember, this is 9 00:00:27,780 --> 00:00:30,840 Sean Aylmer: general information only and you should seek professional advice before 10 00:00:30,840 --> 00:00:34,650 Sean Aylmer: making investment decisions. Matthew Kidman is the Principal at Centennial 11 00:00:34,680 --> 00:00:37,500 Sean Aylmer: Asset Management. Matthew, welcome back to Fear & Greed. 12 00:00:38,010 --> 00:00:39,210 Matthew Kidman: Hello, Sean. How are you? 13 00:00:39,630 --> 00:00:41,729 Sean Aylmer: Very well, thank you. Thank you for joining us. Tell 14 00:00:41,729 --> 00:00:45,510 Sean Aylmer: me, let's start with a macro outlook. What's your take 15 00:00:45,570 --> 00:00:47,790 Sean Aylmer: on interest rates, and then we'll marry that into what 16 00:00:47,790 --> 00:00:48,720 Sean Aylmer: that means for the market? 17 00:00:49,590 --> 00:00:52,139 Matthew Kidman: So if we start in the US where everyone follows 18 00:00:52,139 --> 00:00:54,630 Matthew Kidman: that 10 year bond yield and what the Fed's doing, 19 00:00:54,660 --> 00:00:58,350 Matthew Kidman: which sets rates around the world, as you know, at 20 00:00:58,350 --> 00:01:01,350 Matthew Kidman: the start of the year or even at the end of last calendar year, we 21 00:01:01,350 --> 00:01:04,408 Matthew Kidman: were talking about interest rate cuts, maybe five, six, seven 22 00:01:04,410 --> 00:01:06,990 Matthew Kidman: of them starting in March. Well, we're in March. It's 23 00:01:06,990 --> 00:01:09,719 Matthew Kidman: not happening. The economy has been too strong. It's been 24 00:01:09,719 --> 00:01:12,269 Matthew Kidman: a surprise to everyone. We had the Fed the other 25 00:01:12,270 --> 00:01:15,720 Matthew Kidman: day talking about still three rate cuts this year, maybe 26 00:01:15,720 --> 00:01:19,260 Matthew Kidman: starting in the middle of the year to the back end. It feels 27 00:01:19,260 --> 00:01:22,619 Matthew Kidman: to me that that could be optimistic, one or two 28 00:01:22,620 --> 00:01:25,259 Matthew Kidman: at the back end of the year. The US economy 29 00:01:25,259 --> 00:01:27,359 Matthew Kidman: is still growing something like two and a half percent. 30 00:01:27,360 --> 00:01:31,260 Matthew Kidman: That's on the current indicators. And if you take it 31 00:01:31,260 --> 00:01:33,539 Matthew Kidman: to Australia, we're kind of in the same position that 32 00:01:33,660 --> 00:01:36,930 Matthew Kidman: rate cuts, which would probably help some parts of the 33 00:01:36,930 --> 00:01:40,500 Matthew Kidman: economy, probably not necessarily at the moment because inflation hasn't 34 00:01:40,500 --> 00:01:42,900 Matthew Kidman: quite come down, and so maybe the back end of 35 00:01:42,900 --> 00:01:46,018 Matthew Kidman: the year, maybe not, maybe early next year. So I'm 36 00:01:46,020 --> 00:01:49,050 Matthew Kidman: thinking flatish rates for the rest of most of this year. 37 00:01:49,830 --> 00:01:53,160 Sean Aylmer: With that as background, why has the market run so 38 00:01:53,160 --> 00:01:56,850 Sean Aylmer: hard, and particularly Wall Street, but here locally as well? 39 00:01:57,360 --> 00:01:59,820 Sean Aylmer: And actually, let's answer that one first. Why have we 40 00:01:59,820 --> 00:02:00,660 Sean Aylmer: gone so hard? 41 00:02:01,320 --> 00:02:04,680 Matthew Kidman: Well, just like we said, the economy has been better 42 00:02:04,680 --> 00:02:06,539 Matthew Kidman: than what anyone thought. And I'm not just talking about 43 00:02:06,539 --> 00:02:09,600 Matthew Kidman: the Australian economy, I'm talking about the US economy. Even the 44 00:02:09,600 --> 00:02:13,680 Matthew Kidman: laggards in Europe and places, other developed countries, Japan, it's 45 00:02:13,710 --> 00:02:16,078 Matthew Kidman: all been a lot better than what people thought, maybe 46 00:02:16,320 --> 00:02:19,440 Matthew Kidman: six, definitely 12 months ago. And the US is leading 47 00:02:19,440 --> 00:02:22,469 Matthew Kidman: the charge. So stronger economic growth, sure, we've got higher 48 00:02:22,500 --> 00:02:25,440 Matthew Kidman: interest rates, which is not great for equities because you 49 00:02:25,440 --> 00:02:28,200 Matthew Kidman: use that discount rate to higher level, brings back prices, 50 00:02:28,500 --> 00:02:32,880 Matthew Kidman: but economies are better and profit growth is pretty good. 51 00:02:33,059 --> 00:02:36,418 Matthew Kidman: We've just been through the earnings season here in Australia, 52 00:02:36,419 --> 00:02:39,120 Matthew Kidman: we just finished a couple of weeks back, and on 53 00:02:39,120 --> 00:02:43,530 Matthew Kidman: the broad spectrum of companies, not everyone was great, but 54 00:02:43,530 --> 00:02:46,230 Matthew Kidman: generally it was slightly better and people came out of 55 00:02:46,230 --> 00:02:49,500 Matthew Kidman: it optimistic. And, as you know, what (inaudible) sentiments 56 00:02:49,500 --> 00:02:50,850 Matthew Kidman: like leads the charge. 57 00:02:51,900 --> 00:02:54,749 Sean Aylmer: It was interesting last week when the Reserve Bank came 58 00:02:54,750 --> 00:02:57,060 Sean Aylmer: out and said, " We don't have a bias to hike 59 00:02:57,150 --> 00:03:01,230 Sean Aylmer: rates anymore." The market, from that moment, took off. I 60 00:03:01,230 --> 00:03:04,169 Sean Aylmer: think it jumped by more than a percent. One side says, " 61 00:03:04,169 --> 00:03:06,150 Sean Aylmer: Well, the economy's slowing." That's not a good thing. The 62 00:03:06,150 --> 00:03:09,120 Sean Aylmer: other side is exactly as you've explained. How does an 63 00:03:09,120 --> 00:03:10,920 Sean Aylmer: analyst work out which way to go? 64 00:03:11,639 --> 00:03:14,430 Matthew Kidman: Well, it's interesting because the Australian economy and the Australian interest 65 00:03:14,430 --> 00:03:16,829 Matthew Kidman: rate cycle's a bit behind the US. The US is already 66 00:03:16,829 --> 00:03:19,650 Matthew Kidman: in that pause mode and we've just joined it, but 67 00:03:19,650 --> 00:03:22,260 Matthew Kidman: we've finished at a lot higher rate. Now, what would 68 00:03:22,260 --> 00:03:25,440 Matthew Kidman: derail markets? That's probably the question and why sentiment is 69 00:03:25,440 --> 00:03:29,099 Matthew Kidman: strong. What would derail markets is that economic growth remains 70 00:03:29,099 --> 00:03:32,820 Matthew Kidman: strong and inflation starts to go up a little bit 71 00:03:32,820 --> 00:03:35,729 Matthew Kidman: rather than down. Now that would be terrible for markets; 72 00:03:35,730 --> 00:03:38,850 Matthew Kidman: rates would go up. So I think it's almost like, 73 00:03:38,880 --> 00:03:40,590 Matthew Kidman: well, that's the bad scenario. The good scenario at the 74 00:03:40,590 --> 00:03:46,380 Matthew Kidman: moment, economy reasonably strong, not too powerful, but reasonably strong, 75 00:03:46,380 --> 00:03:50,249 Matthew Kidman: keeps people employed, keeps the economy ticking over and interest 76 00:03:50,250 --> 00:03:53,549 Matthew Kidman: rates flat. That's enough for this rally to continue, because 77 00:03:53,549 --> 00:03:56,369 Matthew Kidman: the bull market, the new bull market started in October, 78 00:03:56,460 --> 00:03:58,920 Matthew Kidman: 2022 in the US and it's going to last a 79 00:03:58,920 --> 00:04:00,870 Matthew Kidman: while. There is a lot of momentum in the market, 80 00:04:00,870 --> 00:04:02,610 Matthew Kidman: and as I said before, sentiment's strong. 81 00:04:03,240 --> 00:04:05,190 Sean Aylmer: Stay with me, Matthew. We'll be back in a minute. 82 00:04:12,540 --> 00:04:15,630 Sean Aylmer: My guest this morning is Matthew Kidman, Principal at Centennial 83 00:04:15,630 --> 00:04:21,570 Sean Aylmer: Asset Management. Okay, so let's go into sectors. I hate 84 00:04:21,570 --> 00:04:24,750 Sean Aylmer: starting with the financials because you always laughed at me. 85 00:04:24,928 --> 00:04:27,988 Sean Aylmer: Many years ago, Matthew and I worked together and I 86 00:04:27,990 --> 00:04:29,849 Sean Aylmer: was a banking writer at the time, and Matthew was 87 00:04:29,850 --> 00:04:34,080 Sean Aylmer: just like the Grand Puba, guru of all markets. So 88 00:04:34,500 --> 00:04:37,680 Sean Aylmer: you do refer to my knowledge in banks, which you 89 00:04:37,680 --> 00:04:41,070 Sean Aylmer: overstate continually because I still can't understand them. What's going 90 00:04:41,070 --> 00:04:43,589 Sean Aylmer: to happen with financial (inaudible) , the banks, particularly the 91 00:04:43,589 --> 00:04:45,570 Sean Aylmer: Commonwealth Bank, they've done incredibly well. 92 00:04:45,690 --> 00:04:48,119 Matthew Kidman: I can never remember laughing at you at any stage, 93 00:04:48,119 --> 00:04:52,230 Matthew Kidman: Sean, so let's get that clear. Look, I've been wrong on banks. 94 00:04:52,260 --> 00:04:54,539 Matthew Kidman: Banks have, as you know, they've led this market, the 95 00:04:54,540 --> 00:04:57,719 Matthew Kidman: Australian market, and they've done pretty well globally actually. But 96 00:04:57,719 --> 00:05:00,509 Matthew Kidman: the Australian market, the four big banks have led the 97 00:05:00,509 --> 00:05:03,299 Matthew Kidman: market... Well, the barbell at the other end of the 98 00:05:03,299 --> 00:05:08,279 Matthew Kidman: barbell, the iron ore plays, BHP, Rio and Fortescue have actually not performed 99 00:05:08,279 --> 00:05:10,469 Matthew Kidman: that well in the new calendar year after doing well 100 00:05:10,470 --> 00:05:13,470 Matthew Kidman: last year. So China slow down. That reflects a little 101 00:05:13,470 --> 00:05:16,409 Matthew Kidman: bit in the iron ore place. But domestically, as I 102 00:05:16,410 --> 00:05:19,739 Matthew Kidman: said before, interest rates have leveled out. The bank's margins 103 00:05:19,740 --> 00:05:23,580 Matthew Kidman: have started to stop declining and just kind of okay 104 00:05:23,580 --> 00:05:27,178 Matthew Kidman: now, they're steadied. And that's been enough for people to 105 00:05:27,180 --> 00:05:29,880 Matthew Kidman: get excited and say, " Okay, well, the outlook is probably 106 00:05:29,880 --> 00:05:32,400 Matthew Kidman: better than what it was, therefore we're going to buy 107 00:05:32,400 --> 00:05:35,279 Matthew Kidman: them." So, look, I always keep saying banks are expensive 108 00:05:35,279 --> 00:05:37,739 Matthew Kidman: in Australia. They are. So it's hard to see them 109 00:05:37,740 --> 00:05:40,890 Matthew Kidman: going up a lot, but the market's supportive of it 110 00:05:41,699 --> 00:05:45,450 Matthew Kidman: and the fundamentals, the margins, the top line growth is 111 00:05:45,450 --> 00:05:49,710 Matthew Kidman: improving. So conditions are improving. Whether it can drive bank 112 00:05:49,920 --> 00:05:52,080 Matthew Kidman: share prices a lot higher, I'm not sure because they're 113 00:05:52,080 --> 00:05:54,120 Matthew Kidman: expensive, but the conditions are better. 114 00:05:54,509 --> 00:05:58,260 Sean Aylmer: What about the retailers and let's split into staples, consumer staples, 115 00:05:58,650 --> 00:06:00,629 Sean Aylmer: the big guys, Woolies and Coles and that, and then 116 00:06:00,630 --> 00:06:03,480 Sean Aylmer: the discretionary ones, and even that sector, we can split 117 00:06:03,480 --> 00:06:07,020 Sean Aylmer: between the Harvey Norman's and JB Hi- Fi's versus the 118 00:06:07,020 --> 00:06:10,080 Sean Aylmer: La Veste and online players and stuff like that. Starting 119 00:06:10,080 --> 00:06:11,640 Sean Aylmer: with the staples, what do you reckon of them? 120 00:06:12,300 --> 00:06:15,540 Matthew Kidman: Well, the staples normally get a lot of attention when 121 00:06:15,540 --> 00:06:17,939 Matthew Kidman: things are slowing down, and they're staple for that reason. 122 00:06:17,940 --> 00:06:20,820 Matthew Kidman: We've always got to go shopping, so they're defensive. And 123 00:06:20,820 --> 00:06:22,470 Matthew Kidman: I think we're seeing an unwind of that at the 124 00:06:22,470 --> 00:06:26,520 Matthew Kidman: moment. There's machinations. In the food market, we've seen Aldi, 125 00:06:26,520 --> 00:06:28,799 Matthew Kidman: which is not listed here, obviously the German company winning 126 00:06:28,800 --> 00:06:32,789 Matthew Kidman: market share. Woolworths struggling a little bit. We've had obviously 127 00:06:32,790 --> 00:06:36,630 Matthew Kidman: the changes in management announced. Cole's doing okay. But that 128 00:06:36,630 --> 00:06:42,360 Matthew Kidman: sector, that non- discretionary staple market is probably not where 129 00:06:42,360 --> 00:06:44,428 Matthew Kidman: you want to be when the economy might be hitting 130 00:06:44,428 --> 00:06:46,888 Matthew Kidman: bottom and the outlook over the next two years just 131 00:06:46,889 --> 00:06:50,160 Matthew Kidman: to grow a bit quicker because they're defensive. If we 132 00:06:50,160 --> 00:06:53,069 Matthew Kidman: go to the discretionary part of the market, now nothing's 133 00:06:53,070 --> 00:06:55,529 Matthew Kidman: cheap because everyone did a little bit better in the 134 00:06:55,680 --> 00:06:58,558 Matthew Kidman: reporting season than anyone thought. But as you mentioned a 135 00:06:58,560 --> 00:07:02,370 Matthew Kidman: few names there, La Veste, JB Hi- Fi, Nick Scali, 136 00:07:02,700 --> 00:07:05,938 Matthew Kidman: broad range of products from apparel through to electronics and 137 00:07:05,940 --> 00:07:09,389 Matthew Kidman: furniture, they're all doing okay. The top line's not racing 138 00:07:09,389 --> 00:07:12,840 Matthew Kidman: away. Australians aren't shooting the lights out in terms of 139 00:07:12,840 --> 00:07:16,230 Matthew Kidman: the economy, but they're getting really, really good deals out 140 00:07:16,230 --> 00:07:19,770 Matthew Kidman: of China. So freight rates were extremely high during COVID. 141 00:07:19,800 --> 00:07:21,990 Matthew Kidman: They've come down and now they look like they're going 142 00:07:21,990 --> 00:07:24,719 Matthew Kidman: to stay down for a while. But more importantly, there's 143 00:07:24,750 --> 00:07:27,960 Matthew Kidman: excess capacity in China because the Americans and the Europeans, 144 00:07:27,960 --> 00:07:30,840 Matthew Kidman: but mainly the Americans have departed and everyone got a 145 00:07:30,840 --> 00:07:35,070 Matthew Kidman: shock at how much margin these retailers were making on 146 00:07:35,070 --> 00:07:36,510 Matthew Kidman: their products. So I think that's a good sign. I 147 00:07:36,510 --> 00:07:39,780 Matthew Kidman: think that's going to continue. The Chinese are desperate for 148 00:07:39,870 --> 00:07:42,210 Matthew Kidman: Australian business, even though we're nowhere near as large as 149 00:07:42,210 --> 00:07:44,940 Matthew Kidman: the Americans. Any business is good business and Australians have 150 00:07:44,940 --> 00:07:47,310 Matthew Kidman: got the whip hand in that respect at the moment. 151 00:07:47,549 --> 00:07:49,920 Matthew Kidman: So I think the outlook looks all right. Top line, 152 00:07:49,920 --> 00:07:55,050 Matthew Kidman: okay. Demand, okay, not running away, but not bad. But margins staying pretty strong. 153 00:07:55,470 --> 00:07:58,260 Sean Aylmer: I love the term industrials, Matthew, because it just captures 154 00:07:58,260 --> 00:08:02,160 Sean Aylmer: all sorts of things, from the building materials companies, which 155 00:08:02,160 --> 00:08:05,580 Sean Aylmer: seem to be continually under takeover offer now through to 156 00:08:05,760 --> 00:08:08,850 Sean Aylmer: all sorts of things. Let's start with building materials. 157 00:08:09,840 --> 00:08:12,000 Matthew Kidman: Well, there's not much left is there? I don't think 158 00:08:12,000 --> 00:08:14,429 Matthew Kidman: the Boral one will get up under the current prices 159 00:08:14,429 --> 00:08:17,639 Matthew Kidman: where you've got the Seven Group which already owns most 160 00:08:17,639 --> 00:08:20,190 Matthew Kidman: of Boral, wanting to take the rest out. Maybe that's 161 00:08:20,190 --> 00:08:22,859 Matthew Kidman: the last kind of stock that stays there, because I 162 00:08:22,859 --> 00:08:25,680 Matthew Kidman: don't think Kerry Stokes and Ryan Stokes will pay up 163 00:08:25,680 --> 00:08:28,320 Matthew Kidman: too much. They'll get it on the cheapest they see 164 00:08:28,320 --> 00:08:33,480 Matthew Kidman: it. CSR is gone, (inaudible) is gone. So there's not much to choose 165 00:08:33,480 --> 00:08:36,059 Matthew Kidman: out of, which is a bit of a pity. There's things 166 00:08:36,059 --> 00:08:40,109 Matthew Kidman: like Mars Group, which is a smaller player, GWA, which does bathrooms, 167 00:08:40,109 --> 00:08:44,100 Matthew Kidman: toilets, that kind of stuff. But I think building materials 168 00:08:44,100 --> 00:08:47,490 Matthew Kidman: or a housing boom is what will drive the next 169 00:08:47,490 --> 00:08:49,230 Matthew Kidman: leg of Australian growth. It won't be this year. We 170 00:08:49,230 --> 00:08:51,929 Matthew Kidman: all know housing's tough at the moment. It's expensive, but 171 00:08:51,929 --> 00:08:55,828 Matthew Kidman: costs in general have come down. For example, talking to 172 00:08:55,830 --> 00:08:58,619 Matthew Kidman: Brickworks, which is another player in that field, they were 173 00:08:58,619 --> 00:09:03,420 Matthew Kidman: saying that bricklayers, the price for bricklayers has dropped from like $2. 174 00:09:03,420 --> 00:09:07,439 Matthew Kidman: 50 a brick to a 1. 40 in the last six months. 175 00:09:07,500 --> 00:09:10,740 Matthew Kidman: So the labor pressure and the raw materials are coming 176 00:09:10,740 --> 00:09:13,980 Matthew Kidman: down, and I think that will lead over the goodness 177 00:09:13,980 --> 00:09:16,500 Matthew Kidman: of time, especially if we get an interest rate cut the back end of 178 00:09:16,500 --> 00:09:19,350 Matthew Kidman: this year, start of next year, housing, because we've got 179 00:09:19,770 --> 00:09:23,939 Matthew Kidman: a very tight housing market. We need houses, and with 180 00:09:23,940 --> 00:09:26,490 Matthew Kidman: the fullness of time, we will get houses. So the 181 00:09:26,490 --> 00:09:28,530 Matthew Kidman: margins are lining up and the demands there. I think 182 00:09:28,770 --> 00:09:31,708 Matthew Kidman: '25 into '26 could be really strong for that sector. 183 00:09:32,160 --> 00:09:33,480 Sean Aylmer: We're kind of running out of time, but I want 184 00:09:33,480 --> 00:09:35,369 Sean Aylmer: to talk to you about the travel companies. We're jumping 185 00:09:35,369 --> 00:09:38,429 Sean Aylmer: around a bit here. From Qantas through to some of 186 00:09:38,429 --> 00:09:41,910 Sean Aylmer: the service providers, they ran hard, they've come off a 187 00:09:41,910 --> 00:09:44,370 Sean Aylmer: bit. What do you think the outlook for them is? 188 00:09:44,700 --> 00:09:47,009 Matthew Kidman: Yeah, I think it's mixed, exactly what you just said. 189 00:09:47,010 --> 00:09:52,078 Matthew Kidman: I think leisure's okay, corporate travel as a sector not 190 00:09:52,080 --> 00:09:54,929 Matthew Kidman: so good. Hasn't come back as strong, it's more competitive. 191 00:09:55,530 --> 00:09:59,010 Matthew Kidman: Qantas I think is suffering now from where it was 192 00:09:59,040 --> 00:10:01,590 Matthew Kidman: from competition coming back in. We had that kerfuffle last 193 00:10:01,590 --> 00:10:04,978 Matthew Kidman: year about Qatar struggling there. But then again, you've got 194 00:10:04,980 --> 00:10:09,240 Matthew Kidman: something like Webjet, which is mainly these days, a wholesale 195 00:10:09,240 --> 00:10:13,410 Matthew Kidman: into booking hotel rooms and accommodation. That's got a niche 196 00:10:13,410 --> 00:10:17,730 Matthew Kidman: going really well. So it's really mixed. I think leisure 197 00:10:17,730 --> 00:10:19,710 Matthew Kidman: will continue to go strong, which might be good for 198 00:10:19,710 --> 00:10:22,679 Matthew Kidman: Flight Centre. I think corporate is going to struggle for 199 00:10:22,679 --> 00:10:23,249 Matthew Kidman: a bit longer. 200 00:10:23,670 --> 00:10:26,249 Sean Aylmer: Okay. We can't wrap it up without asking for some 201 00:10:26,250 --> 00:10:29,520 Sean Aylmer: sort of stock that you particularly like now. Listeners remember, 202 00:10:29,789 --> 00:10:32,940 Sean Aylmer: always seek professional advice before going and making investment decisions. 203 00:10:32,940 --> 00:10:36,300 Sean Aylmer: It's all about your personal circumstances, not what Matthew thinks. 204 00:10:36,600 --> 00:10:39,059 Sean Aylmer: But having said that, Matthew, give me one. 205 00:10:39,389 --> 00:10:41,670 Matthew Kidman: Yeah, you're always, in my area of the field, you're always looking for 206 00:10:41,670 --> 00:10:44,099 Matthew Kidman: small caps that no one knows about, under owned so 207 00:10:44,099 --> 00:10:46,708 Matthew Kidman: you can get on board early. One that I would 208 00:10:46,708 --> 00:10:49,950 Matthew Kidman: say that has been a struggler for years, but might've found 209 00:10:49,950 --> 00:10:53,490 Matthew Kidman: a nice little niche at the moment is SKS Technologies. 210 00:10:53,490 --> 00:10:56,520 Matthew Kidman: Used to be called Stokes. It's a company that provides 211 00:10:56,610 --> 00:11:00,929 Matthew Kidman: electrical services, so your sparkies at a corporate level, and 212 00:11:00,990 --> 00:11:03,690 Matthew Kidman: never made a lot of money, but more recently has 213 00:11:03,690 --> 00:11:05,369 Matthew Kidman: started to make a lot of money. And the niche 214 00:11:05,369 --> 00:11:08,430 Matthew Kidman: they've found is wiring up data centers. 215 00:11:08,550 --> 00:11:08,970 Sean Aylmer: Oh, wow. 216 00:11:08,970 --> 00:11:11,368 Matthew Kidman: And that's a boom product at the moment. Used to 217 00:11:11,370 --> 00:11:13,020 Matthew Kidman: be a couple of percent of the business, it's heading 218 00:11:13,020 --> 00:11:17,040 Matthew Kidman: towards 20, 25% of the business. Good margins, driving profit growth, 219 00:11:17,099 --> 00:11:20,160 Matthew Kidman: capped at 40 million, really small. Could easily do some 220 00:11:20,160 --> 00:11:20,550 Matthew Kidman: good work here. 221 00:11:20,550 --> 00:11:20,760 Sean Aylmer: SKS, is that it? 222 00:11:23,340 --> 00:11:25,649 Matthew Kidman: SKS Technologies. I don't know why they call it that 223 00:11:25,649 --> 00:11:27,870 Matthew Kidman: when it's a sparky company, but there you go. 224 00:11:28,590 --> 00:11:32,700 Sean Aylmer: SKS Sparks or something like that. Matthew, thank you. Thank 225 00:11:32,700 --> 00:11:34,140 Sean Aylmer: you for talking to Fear & Greed. 226 00:11:34,410 --> 00:11:35,009 Matthew Kidman: Thanks, Sean. 227 00:11:35,580 --> 00:11:38,520 Sean Aylmer: That was Matthew Kidman from Centennial Asset Management. This is 228 00:11:38,520 --> 00:11:41,159 Sean Aylmer: the Fear & Greed Business Interview. Remember, this is general information 229 00:11:41,160 --> 00:11:43,920 Sean Aylmer: only and you should seek professional advice before making investment 230 00:11:43,920 --> 00:11:46,860 Sean Aylmer: decisions. Join us every morning for the full episode of 231 00:11:46,860 --> 00:11:49,620 Sean Aylmer: Fear & Greed, daily business news for people who make their 232 00:11:49,620 --> 00:11:52,348 Sean Aylmer: own decisions. I'm Sean Aylmer, enjoy your day.