My oil well rules? That’s not the name of a new Seven Network TV “reality” show to go with My Kitchen Rules and House Rules, but such has been the pace of activity in oil and gas lately at Seven Group Holdings, Kerry Stokes’ main listed company, that you could be forgiven for thinking that a new hydrocarbons “reality” program is about to appear on your TV sets, especially after Stokes found himself a new oil and gas expert for his board yesterday.

Stokes is a conservative, old-fashioned type of investor. And he’s also got a very fat investment portfolio in Seven Group Holdings, with hundreds of millions of dollars in dividend-paying shares. But the usual businesses in his empire — newspapers, magazines, free-to-air TV, construction and mining equipment, here and in parts of China — are doing it very tough. But for much of the past year he has been chasing oil and gas plays as a new business — especially in the Cooper Basin, where Seven Group is poised to be a major player, second only after Santos. Seven Group has built stakes of 19.9% in each of Beach Energy and Drillsearch. He can’t go any higher, except to buy 2.9% in each company every six months, which is just what his track record has been in the past in the old Seven Network, before he merged it with West Australian Newspapers in a value-destroying $4.1 billion merger back in 2011. Driving this move into oil and gas for Stokes was Seven Group CEO Don Voelte, a former CEO of Woodside, who is retiring back to the US and being replaced by Ryan Stokes, son of Kerry and a newbie at best in the oil and gas fields.

To replace Voelte’s lengthy oil experience on the Seven Group board, Stokes has once again turned to Woodside, recruiting current board member and longtime oil industry executive David McEvoy. Part of his lengthy CV is time on the board of Acer Energy (formerly Innamincka Petroleum, which has taken over — pause — Drillsearch, one of Stokes’ targets), which gave him Cooper Basin experience. He’s also a director of another oil group, AWE, and spent a lot of time at Esso, and also as a board member of Po Valley Energy (which helped with the trips to northern Italy). — Glenn Dyer

Hills CEO hung out to dry. Ted Pretty’s CEO services will no longer be needed at Adelaide company Hills Ltd (developers of the iconic Hills Hoist, which was Adelaide high tech in its day). Pretty’s services dispensed with “with immediate effect” on Wednesday in favour of operations boss Grant Logan. And why? Well, the share price has halved in Pretty’s two-and-a-half years. His recent history at Hills characterised not only by the weak share price, but also a series of profit downgrades, the most recent only weeks ago when the board was forced to take a 20% pay cut. And in yesterday’s announcement, news of a further $5 million in one off costs associated with checking out possible acquisition targets. And a final point: Hills chair is Jennifer Hill-Ling, daughter of Bob Hill-Ling, who ran Hills for 27 years until 1992. It obviously doesn’t help to upset someone with that much at stake in the company’s survival in the small and clubby Adelaide business elite. — Glenn Dyer

Poor little rich company. Luxury products groups from fashion to geegaws (LVMH), booze, cars and gambling have blamed the continuing corruption crack down in China for sliding sales and profits in the past year. That’s on top the sliding pace of growth in China, and the aftermath of the eurozone crisis, the sanctions on Russia, which has been hurt (along with the Middle East) by the oil slump and fighting (Ukraine, Iraq, Yemen, Libya). All up it’s been a rough time for a bunch of companies used to selling to people who find money no object. But overnight, a new round of weakness for the luxury groups — the US itself — as homegrown brand Michael Kors Holdings reported its slowest quarterly revenue growth since it floated in December 2014. And it was all thanks to sliding demand for its handbags and accessories, such as watches in North America, its biggest market. The shares slid a nasty 24% on Wall Street. Despite a 18% rise in overall revenue and a smaller rise in profits, investors were spooked by a 6.7% slump in same-store sales in North America, when a 4.4% rise had been forecast by analysts. Management didn’t help by forecasting more sales weaknesses in North America over the rest of the year. — Glenn Dyer

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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