A budding price war in the IVF sector has led to lower treatment prices at one of Australia’s largest providers but costs for consumers could still go lower, according to one of the industry’s pioneers.
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Two of Australia’s largest IVF providers – Virtus Health and Monash IVF – have this week reported sluggish earnings as fewer Australians seek reproductive assistance and as they battle increasing competition from a low-cost operator, Primary Health Care.

Virtus shares tumbled as much as 7.5 per cent on Tuesday after the group missed analyst forecasts by posting a 14.6 per cent fall in net profit to $28.1 million. On Monday, Monash IVF’s shares dived 8.7 per cent on its results and lacklustre 2018 outlook.

Virtus shares closed down 3.2 per cent at $5.48.

Virtus chief executive Sue Channon said competition from lower-cost providers has led to Virtus adjusting the cost of treatments at its cheaper The Fertility Centre clinics to between $900 and $1500 out-of-pocket costs.

This compares to the average out-of-pocket cost of $800 at a Primary clinic.

“The key thing to note is the services are provided by fertility specialists,” Ms Channon said.

Monash IVF does not offer a lower cost option.

Professor Alan Trounson, who was one of the scientists who created the first IVF baby, told BusinessDay prices are still too high.

“I do think the price could go lower. A lot of clinics set the price at the rebate price,” Dr Trounson said.

“At least for younger patients, where the woman is under 38 years of age and the men are in their late 40s, their fertility is pretty strong and I think they could be treated in a much more economical manner than they are currently being treated.”

Dr Trounson, who helped found Monash IVF but has sold out of the company, said people with complex infertility issues needed more expensive care.

Ms Channon said low-cost fertility treatments made up 15 per cent of the company’s total IVF cycles in 2017, an increase on 13 per cent in 2016.

“The average age of our patients is 37 and they have complex fertility issues and so the low-cost options – both ours, bulk-billed and everyone else who provides low-cost services – are not for everybody,” she said.

Virtus will pay a final fully franked dividend of 12?? per share on October 13. During the year its revenue fell 1.8 per cent to $256.5 million. Australian earnings before interest, tax, amortisation and depreciation dropped 7.6 per cent to $65.8 million.

Driving the earnings fall was a 3.7 per cent decrease in IVF cycles on a like-for-like basis. Total IVF cycles were down 1.2 per cent in Australia over the year to June 2017.

Ms Channon said the sector was expected to continue to produce compound average growth rates of between 2 per cent and 3 per cent as it had over the past five years.

Morningstar analyst Chris Kallos said Virtus’ results had missed market consensus and the company’s outlook for growth rates in the sector coupled with weaker-than-expected growth in its low-cost option business had seen investors recalibrate the company’s overall growth prospects.

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Christchurch: Wallabies coaches Michael Cheika and Mick Byrne have responded to stinging criticism from Australian rugby legend Michael Lynagh, conceding the team’s skills weren’t up to scratch against New Zealand last Saturday.
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Byrne, however, insists there has been a marked improvement in overall skills since he took over last year and has explained that time is required to see results.

Following Australia’s 54-34 loss to the All Blacks in Sydney, Lynagh, who represented the Wallabies in 72 games from 1984 to 1995, could not hold back his frustration after the match.

“I can’t overestimate how angry I am at seeing an Australian team have skills that are non-existent,” Lynagh said on Sky Sports. “Passing and catching and making tackles and trusting the bloke beside you are pretty basic even at schoolboy level. Australia has had a month to work together to try and create stuff and do things and they come up with that in the first 40. Very, very disappointing.”

Speaking on Tuesday at Wallabies training in Christchurch, Cheika had little to say when pressed on Lynagh’s comments.

“Where’s he? Over in England isn’t he?” Cheika said. “If that’s how he feels, [we] can’t change it except for what we do on the field.

“There’s nothing else I can say to it, really.”

Byrne, a former All Blacks skills coach, gave an honest appraisal when asked for a response to the criticism.

“When you’re talking about a dropped pass or a missed tackle they’re skillsets and yeah, they weren’t up to scratch,” Byrne said. “When you’re out there as a group working on changing habits, there is a period of time when sometimes it’s not acceptable. I understand that.

“I honestly believe that when you’re inside, we know where we are going with it. We are not executing some of the things we’d like to but we are trying to get better every day.

“When you look at the game and from a scoreboard point of view, some of the errors we made, we took some great learnings.”

Byrne says he can understand the public’s frustration in the aftermath of a particularly sobering loss to the All Blacks but believes there are positive signs coming out of the Wallabies from a skills perspective.

“The improvements have been fantastic,” Byrne said. “We are seeing huge improvements there and it’s going to be persistence that will start to transfer it out into the game.

“I understand people’s frustrations that they’re not seeing it straight away. Maybe that’s a thing of society; there’s an instant gratification that’s everybody is after. But this is just hard work that takes time.”

Byrne, known affectionately as “Mick the Kick”, pointed to the fact that the All Blacks also needed time to see genuine improvements when he first came on board.

“If you go back, 2007 wasn’t a flash year for us trying to get things right but certainly when it clicks into gear it happens and when you turn the corner you turn it pretty quickly,” Byrne said. “The key is perseverance and these boys’ energy to do that has been tremendous.”

Meanwhile, recent Wallabies debutant Curtis Rona said there were “highs and lows” in his first outing in a gold jersey but his hunger to remain on the wing has well and truly remained.

If Dane Haylett-Petty is cleared of a biceps injury, which is likely, Rona will probably have to make way for his Western Force teammate.

“He’s got a good chance of being fit and it’ll be massive for the team if he’s ready to go,” Rona said. “In every game he’s played for Australia he’s been exceptional.”

Rona said in such tough times for Australian rugby, fans needed to show their support rather than bag the national team.

“What makes the game more important is if they stick it out with us and get behind us and encourage us and be positive more than negative,” Rona said. “That’s what we need in times like this.

“It’s all right for supporters to jump on a winning streak but when it’s times like this, against the best team in the world, we need people to support us and show some positivity coming into these games.”

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One of the two Wisconsin teenage girls charged in the 2014 Slender Man stabbing of a classmate has pleaded guilty to a lesser charge.
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Anissa Weier and Morgan Geyser, who were both aged 12 at the time of the attack, were charged as adults with first-degree intentional homicide on the attack on Payton Leutner, who was stabbed 19 times and left for dead in a park during a sleepover party.

Both girls faced up to 45 years in prison, if convicted. The teenagers entered an insanity plea.

Weier, now 15, pleaded guilty to attempted second-degree homicide as a party to a crime, with use of a deadly weapon.

The court was told that the victim’s family supported the plea arrangement.

Weier will face a trial next month to establish the state of her mental health. If found guilty she could face up to 10 years in prison, however, if the jury found she was suffering mental illness at the time of the attempted killing, the 15-year-old will be sectioned to three years in a psychiatric hospital.

At the time of the attack, both girls told detectives they were acting to appease or impress Slender Man, an online urban legend the girls said they believed would harm them or their families if they didn’t kill Leutner.

For the first time since her arrest, Weier, now a much more mature looking and sounding teenager, spoke at some length in court. She had to explain to the judge that she understood what she had done, and the consequences of pleading guilty to the new charge.

Weier also told the court for the first time that she feared Morgan Geyser, her co-defendant, would return to Waukesha and kill her if Weier didn’t try to flee with her after the actual stabbing occurred.

Geyser pleased not guilty by reason of mental disease to attempted homicide chargers. Weier initially entered the same plea.

Luetner was found bleeding in a park by a passing cyclist. She was stabbed during a game of hide-and-seek after Geyser’s 12th birthday sleepover the night before.

With Milwaukee Journal Sentinel

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Paddle Pop, Magnum and Golden Gaytime maker Streets ice cream faces accusations of using “industrial blackmail” to push through cuts to staff wages and conditions.
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Unilever, the multinational company that owns Streets, has applied to the Fair Work Commission to terminate an expired enterprise agreement covering factory workers in the western Sydney suburb of Minto.

The company said the decision was made after “careful consideration of all options to create more flexible working conditions and enhance the competitiveness and viability of the factory in the longer-term, which is ultimately in the best interest of employees and the company”.

However, the union estimates the move would cut workers’ take-home pay by 46 per cent, a claim Unilever said in a statement had “no basis in fact”.

Steve Murphy, the assistant secretary of the Australian Manufacturing Workers Union, said 145 Streets factory workers represented by the union faced an uncertain future.

“The nuclear option of terminating the agreement and cutting their workers’ pay will not be accepted by our members or the consumers of their products,” he said.

Mr Murphy said workers had been trying to negotiate a new agreement that improved productivity as well as pay and conditions. He urged Streets to return to the negotiating table.

But Unilever said the AMWU and Unilever would “all get to have a say and be heard” as part of the Fair Work Commission process.

The AMWU said Unilever’s application to have the Streets Minto factory enterprise agreement terminated would, if successful, mean workers would revert to the modern food award.

It estimates workers’ pay would be cut from $40.18 an hour to $22.43. Including changes to shifts, it said this would result in an overall annual pay cut of 46 per cent.

The union said workers could also face weaker pay rates for overtime and reductions in leave entitlements and flexible shifts.

The ACTU described the company threat to terminate the enterprise agreement as “industrial blackmail”.

“This is a new tool in the employers’ bargaining shed,” ACTU president Ged Kearney said.

“More and more, we are seeing employers use this tactic whereby they introduce a new enterprise bargaining agreement that they know will be unacceptable to the employees.

“They stretch out bargaining over and over and force the employees to vote down unacceptable agreements and then say ‘we can’t come to an agreement’ and apply to the Fair Work Commission for a termination.”

Ms Kearney said this left employees with a choice between accepting a new agreement that cut their pay below current levels, or being forced onto an award that paid them even less.

“They are using it as industrial blackmail,” she said.

“You are asked to choose between a pay cut and a worse pay cut.

“This tactic is driving down wages, trashing the bargaining system and making an absolute joke of any industrial relations protections that workers might have.”

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It is hard to believe activist shareholder Elliott Management is about to stop agitating for change at BHP now the company has caved in to its demands to ditch its US oil and gas shale assets.
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Quite the opposite. It will be emboldened to pursue other demands it thinks necessary for BHP to clean up its act.

It is too simple to assume that because BHP delivered a massive boost in underlying profits to $US6.7 billion ($8.5 billion), from $US1.2 billion last year, and more than tripled the dividend to shareholders that this would provide it sufficient armour to push Elliott into retreat.

First, this is because the overwhelming majority of the improved profit performance was due to higher prices in the commodities BHP mines and, second, because despite the massive jump in profit, it came in below what the market was expecting.

Sure, BHP chief executive Andrew Mackenzie has been doing a good job improving efficiency, reducing debt and trimming costs and capital outlays but Elliott wants more structural change.

In particular, it wants BHP to get out of the oil business altogether and at this stage the company won’t have a bar of it.

Neither will BHP acquiesce to Elliott’s push to collapse the dual-listed structure.

Having said that, Elliott has scored plenty of goals in its BHP game since the starting whistle sounded earlier this year.

The most important was BHP’s decision to sell the onshore oil/gas shale (unconventional) assets in the US.

While BHP is dressing up this announcement as its own decision – rather than a result of pressure from Elliott and some of its supporting fellow shareholders – the fact is that BHP first responded to this demand in April with a firm no.

In BHP’s initial response to rejecting this part of the Elliott proposal, it said among other things: “Onshore US expected to be free cash flow positive in FY17 and poised for growth as prices recover.”

On Monday, Mackenzie played the debate differently, saying that it had been going through the process of how to deal with these assets for years. He said the reason for selling was because the company couldn’t find additional shale assets to acquire in order to bulk up that division.

But it appears most likely that BHP had wanted to hold on to these assets in order to improve them to claw back some of the billions of capital blown up buying them. It paid $US20 billion for the assets and spent a further $US17 billion developing them – mostly under Mackenzie’s predecessor, Marius Kloppers.

However, Mackenzie did concede that the views of shareholders were always taken into account.

Meanwhile, an additional Elliott goal was revealed on Tuesday – the decision about developing BHP’s potash business would now be put on hold for a few years rather than going to the board for final approval next year.

Elliott had been hugely critical of BHP taking the plunge into potash on the basis that there was a risk of blowing up more capital, particularly given the current price of this commodity.

Elliott was also successful in its push for BHP to appoint a well-credentialled, cleanskin chairman to take over later this year when Jac Nasser retires. Although BHP may have done this without prodding.

There are a range of views from analysts and shareholders on whether BHP should unify its capital structure, but the majority are not in favour.

There are also plenty of experts looking at how much the shale assets are worth, (some say upwards of $US11 billion), how long it will take to sell them, how a deal could be structured and what it will mean for BHP earnings.

Mackenzie has a preference for a trade sale, but will look at other options.

A report last month by Macquarie found “in aggregate, we find that the valuation of the US onshore petroleum business is ~$US10 billion, driven mainly by the Permian and Eagle Ford. However, our analysis includes a number of assumptions, and risks to execution exist in achieving that value, which when taken into account, provide a more moderate view on valuation of $US8-10 billion for the business”.

It also said: “Shale sale is earnings accretive but value neutral: A sale of the shale assets for $US8 billion would be valuation neutral but deliver a material improvement to group earnings and cash flow. Our shale sale scenario delivers 10-25 per cent earnings per share upgrades for full year 19-21 and a 20 per cent reduction in capex.”

The bottom line is that BHP doesn’t want to hand over the company’s future strategy to Elliott (a 5 per cent shareholder).

Mackenzie is steadfast in his views that the conventional petroleum business is working well and delivering good returns and that there will be plenty more of that in the coming years.

He says there will be plenty of time (a couple of decades) of puffing on this cigar because electric cars will change the dynamics of the oil industry.

Not everyone agrees.

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