🗞️ Electrification

Good morning. Electric cars have overtaken petrol cars in new vehicle sales across Australia for the first time, grabbing a record 24.9% share of the market.

More than 27,000 EVs found buyers, helped along by government subsidies, rising bowser prices and a wave of cheap Chinese imports.

All the headlines and more below...

YO-CHI IS PLANNING 400 STORES ACROSS 5 COUNTRIES AS ITS VALUATION NEARS $2B

The frozen yoghurt chain founded by Boost Juice's Allis family is planning 150 outlets across five markets by mid-2027, up from 76 today, with long-term ambitions of more than 400 stores. Its valuation has grown from $1.1B a year ago, when Ellerston Capital bought a 4% stake, to approach $2B now. Sales are on track to hit $316M in the year to June 2027, up 39% on the year before, when net profit doubled to $24.1M.

The model works because the product is frozen and made in bulk, stores are self-serve and the footprint is small. Outlets average $3.1M in annual sales with a 42% earnings margin, more than double some of the largest global chains, and a new store costs about $800,000 to open and pays that back within 10 months, against 1.8 to 2.6 years for Chipotle, Cava and Shake Shack. Gross profit is forecast to hit $154.7M this financial year, and the company has paid at least $17M in dividends since December.

Its first London store, opened last week in Notting Hill, drew queues wrapping the block, echoing the reception at its two Singapore stores. It is entering Thailand next month with an outlet in Bangkok's Centralworld, and is also opening in Dallas, Miami and Singapore's Jurong Gateway. Sceptics warn the US market, already crowded with frozen yoghurt chains, will be the hardest test of the expansion.

AUSTRALIAN NEWS

• Treasurer Jim Chalmers has proposed a stamp duty workaround letting small businesses avoid the new 30% minimum tax on discretionary trusts without restructuring, as long as they make fixed distributions to pre-nominated beneficiaries. LINK

• Australian ski resorts are winding up operations early after the country's warmest winter on record left the Alps with record low snowfall. LINK

• The Australian Border Force recorded 700 counterfeit cash detections in the past financial year, more than 50 times the year before, intercepting fake notes worth $6M as small businesses turn to blue-light scanners. LINK

• Some Australians experiencing period poverty are stealing tampons or using socks as substitutes, as the country's largest survey on menstruation found 64% of its 153,000 respondents have struggled to afford period products. LINK

• Lifelong renters face a ‘looming crisis’ in retirement, with the number of older renters up 73% between the 2011 and 2021 censuses. LINK

AI IS FORCING DELOITTE, EY, KPMG, PWC AND ACCENTURE TO DEFEND THEIR BIGGEST REVENUE LINE

Consulting firms are on a collision course with clients over the cost of giant IT projects, as businesses turn to AI to cut spending on external advisers. At German drugmaker Bayer, midway through a six-year overhaul of its SAP systems, 30 AI agents are now doing work that once needed consultants. "The traditional consultant as we know them today will certainly have to change," said Jochen Kamp, who is leading the project. "Fewer and fewer of them will be needed."

Implementation work, the bread-and-butter of professional services for decades, is worth $US236 billion of the $US420 billion global technology consulting market, which Source Global forecasts will grow 8% this year. At Bristol Myers Squibb, chief digital and technology officer Michele Meyers said AI is now doing cybersecurity monitoring that used to go to third parties, and the company has pushed advisers to move from hourly billing to fixed-price or performance-based contracts.

Capgemini shares are down 31% this year and Accenture down 27%, after Accenture flagged in June that clients had delayed large transformation projects. AI advisory work itself is worth $US140 billion and growing, but consulting firms built on staffing up integration projects are the ones under pressure to prove they still add value.

COMPANY NEWS

• Former KPMG Australia chief operating officer Eileen Hoggett has sued the firm in the NSW Supreme Court over her expulsion for storing confidential Lendlease board documents in her office locker. LINK

• Uber will cut about 3,300 roles, or 10% of its 34,000-strong global workforce, as chief executive Dara Khosrowshahi seeks to streamline management after years of rapid revenue growth. LINK

• APRA imposed a $50M operational risk capital add-on and licence conditions on ING Australia after the bank materially overstated its liquidity coverage ratio over several years. LINK

• Qantas has begun phasing out its 10 A380s as part of a premiumisation and efficiency push, a move that has pilots facing pay cuts of $50,000 to $100,000. LINK

• Nvidia has agreed to buy AI platform Hugging Face for US$12.93B, its largest acquisition, as it bets support for open AI models will drive future demand. LINK

• Foxtel has rebranded its ad arm as DAZN Media+ and unveiled new data, fan engagement and AI-powered ad tools as it expands sports and entertainment streaming offerings. LINK

• Hundreds of doctors at Ballarat Base Hospital and Bendigo Health have stopped work over burnout, poor conditions and low morale, after a year without an enterprise bargaining offer from the Victorian government. LINK

• Funday secured its biggest step yet by launching 5 varieties of its no-added-sugar Australian lollies into 1,300 Target stores across the US after achieving $100M in sales. LINK

• Amazon is recruiting 3,000 seasonal workers across Australian fulfilment centres and delivery stations with starting pay of about $35 an hour, driven by expected festive-season customer demand. LINK

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CHART OF THE DAY

Global memory chip demand surges amid AI buildout

ONE MORE SCROLL

Odd Pick: NASA has found a giant 10-sided storm circling Saturn's south pole. Scientists have no idea why it's shaped like that.

Editor’s Pick: A Stanford-led study of more than 7,800 Australian workers has found lower-income staff who negotiate a pay rise face social backlash, while those who stay silent can miss out on close to $800,000 over a 40-year career.

Draft Pick: Geelong has omitted Sam De Koning to recall Max Holmes and Mark Blicavs for its elimination final against Carlton, while Sydney has dropped Joel Amartey despite his fitness.

Doctor’s Pick: Your daily sugary drink habit could double your risk of stomach cancer.

BRAINTEASER

Name the next three words in the sequence:

Golf, Hotel, India, Juliett

Answer below

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ANSWER

It's the phonetic alphabet:
K = Kilo
L = Lima
M = Mike

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