Latest / What the Flux / CommSec's trading profits boom | Rex Airlines has a new US buyer | Gucci-owner sells beauty biz to L’Oréal

Transcript

CommSec's trading profits boom | Rex Airlines has a new US buyer | Gucci-owner sells beauty biz to L’Oréal · What the Flux

• 0:05
  Speaker 1: This is what the Flux.
• 0:06
  Speaker 2: I'm Brett and Justin. It's Wednesday, the twenty second of October.
• 0:10
  Speaker 1: Duzzy boy, Google Search ain't the only one feeling the
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  Speaker 1: brunt of ais capability our trust. The old friend Wikipedia
• 0:16
  Speaker 1: is copying a hit as well. Get this one. Wikipedia
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  Speaker 1: warned that human page views dropped eight percent year over years.
• 0:22
  Speaker 1: They reckon it's because younger generations seeking answers from AI
• 0:26
  Speaker 1: platform and of course a little bit of TikTok as well.
• 0:29
  Speaker 2: So where do we get the truth from anyone? Be man?
• 0:31
  Speaker 2: Good question, fox fam. Have you ever heard of the
• 0:33
  Speaker 2: fire movement? Sanceor financial independence? Retire early? And it's a
• 0:37
  Speaker 2: movement of people who saved and invest a hate of
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  Speaker 2: their money so they can retire early. We break it
• 0:41
  Speaker 2: down in the Flux app what fire is, how people
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  Speaker 2: do it, and all the different types of lifestyles as well.
• 0:46
  Speaker 2: If you want to learn more about how to become
• 0:48
  Speaker 2: financially dependent and retire early, make sure to download the
• 0:51
  Speaker 2: Flux app and check it out.
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  Speaker 1: Three splendid stories today, Juzzy boy, let's do it for
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  Speaker 1: our first. Comsec, which is Combank's trading platform, has seen
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  Speaker 1: its profit jump thirty six percent. As more Aussies try
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  Speaker 1: to get their hands into volatile stock markets.
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  Speaker 2: Raining trades over there on comsext b Man, so tell
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  Speaker 2: me more so.
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  Speaker 1: Compsec is the online stockbroking arm of Combank, which is
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  Speaker 1: obviously Australia's the biggest bank.
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  Speaker 2: And be Man more than forty percent of Australian investors
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  Speaker 2: and now using Comsex platform.
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  Speaker 1: That's basically everyone who's ever googled how do I buy?
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  Speaker 2: Etes, Yes, and be Man. In the year to June thirty,
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  Speaker 2: twenty twenty five, compsecton ounce it's revenue climb to just
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  Speaker 2: under two hundred and eighty nine million bucks.
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  Speaker 1: And its profit whent up thirty six percent to just
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  Speaker 1: under one hundred and fifty six million bucks.
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  Speaker 2: Wow, and be Man. Even though there have been new
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  Speaker 2: low cost trading competitors entering the market, Compsex customer base
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  Speaker 2: cracked three million Aussies.
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  Speaker 1: Which is up thirty seven percent in one year.
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  Speaker 2: And what was the reason?
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  Speaker 1: Well, they reckon with volatility in the market where it
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  Speaker 1: is a lot of retail traders are trying to snag
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  Speaker 1: a discount when the stock prices go down.
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  Speaker 2: Interesting, So what is the key learning here?
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  Speaker 1: When market volatility spikes trading volumes saw and so do
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  Speaker 1: online broker profits.
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  Speaker 2: You see, market volatility is how dramatically prices move up
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  Speaker 2: or move down over a short period.
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  Speaker 1: It's often measured using indicators like the volatility Index or VIX.
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  Speaker 2: And they man when there's high volatility in the market.
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  Speaker 2: It generally attracts retail traders yep.
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  Speaker 1: Those who see opportunity in big price swings.
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  Speaker 2: But volatility can swing both ways. It can create profit
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  Speaker 2: opportunities but also raises risk.
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  Speaker 1: Now thankfully for investors, the S and P five hundred
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  Speaker 1: has jumped eighty five percent since it's twenty twenty two lows.
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  Speaker 2: While the ASEX two hundred is up forty percent since
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  Speaker 2: then as well.
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  Speaker 1: And that has pushed more investors into the market to
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  Speaker 1: try to make a buck.
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  Speaker 2: And that's pretty great news for online trading platforms because
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  Speaker 2: they typically earn revenue per transaction.
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  Speaker 1: So comsec is making bank right now while retail traders
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  Speaker 1: look to ride the highs and lows of the market.
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  Speaker 2: For our second story, Rex Airline aka Regional Express has
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  Speaker 2: find a US buyer after fifteen months.
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  Speaker 1: It admitis s REX is finally getting some new wings.
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  Speaker 1: Juzsey Boy tell me more okay.
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  Speaker 2: So, REX, which is regional express airline connects regional towns
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  Speaker 2: to major cities around Australia. Think Dubbo, Think Wogga Wogga,
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  Speaker 2: think brokenhel jose boit.
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  Speaker 1: You may recall that REX fell into voluntary administration last year, yep.
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  Speaker 2: I do remember that after they tried to take on
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  Speaker 2: the big eagles of the Australian Sky, Quantus and Virtu
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  Speaker 2: of Australia on the capital city roots.
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  Speaker 1: And that expansion meant REX racked up big debts that
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  Speaker 1: they just couldn't afford to repay.
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  Speaker 2: Next minute, voluntary administration and the government paying back some
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  Speaker 2: of its debtors to keep REX in the air for
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  Speaker 2: regional Roots.
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  Speaker 1: And now, after fifteen months in administration, an American aviation
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  Speaker 1: firm named air Tea has agreed to buy Rex, with
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  Speaker 1: the final terms expected this week.
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  Speaker 2: And b Man airt runs FedEx flights and charters in
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  Speaker 2: the US.
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  Speaker 1: But Josey Boy, the deal is an all smooth flying
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  Speaker 1: especially for Rex's creditors.
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  Speaker 2: Yep. It's believed that as part of this deal, most
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  Speaker 2: of rex's creditors, including the Federal government, won't be repaid
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  Speaker 2: their debts.
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  Speaker 1: And Juzzy Boy The government knows it's very hard to
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  Speaker 1: get a deal for Rex because of its asset specific risk.
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  Speaker 2: So what is the key learning here?
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  Speaker 1: Asset specific risk is when a company's value is heavily
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  Speaker 1: tied to specific equipment or technology that can't easily be replaced.
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  Speaker 2: In other words, the company's key assets pose a significant
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  Speaker 2: risk for the buyer.
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  Speaker 1: And it just so happens that Rex's biggest assets, it's
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  Speaker 1: error planes, are also its biggest risk.
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  Speaker 2: Yeah get this, bee Man. Rex operates fifty seven planes,
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  Speaker 2: mostly SAB three forties, that are older than some of
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  Speaker 2: its passengers.
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  Speaker 1: In fact, its average planes are more than thirty one
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  Speaker 1: years old Kerry.
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  Speaker 2: And that means these planes need a whole lot of
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  Speaker 2: maintenance and also replacement parts.
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  Speaker 1: The problem for Rex is that Saab don't make these
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  Speaker 1: planes anymore, so finding parts is nigh impossible.
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  Speaker 2: Asset specific risk.
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  Speaker 1: But AIRT has access to spare parts for Rex's Saab
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  Speaker 1: three forty aircrafts, and.
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  Speaker 2: It also owns the maintenance and repair operations facilities too,
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  Speaker 2: So Jazi Waite, the good news is that they'll be
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  Speaker 2: able to keep these planes in the air. The bad
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  Speaker 2: news for rex its creditors is that AIRT weren't really
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  Speaker 2: competing with other buyers to get this deal done. For
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  Speaker 2: our third and final story, Gucci's parent company, Keering, has
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  Speaker 2: sold its beauty business to Looreel for billion euros to
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  Speaker 2: cut its debt and refocus on fashion.
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  Speaker 1: A very rough run for Gucci lately. Josey boy, what's
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  Speaker 1: going on here?
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  Speaker 2: Okay? So Curing is the French luxury conglomerate behind brands
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  Speaker 2: like Gucci, Balenciaga, Batakea, Vinetta.
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  Speaker 1: But does boy. Last year, Kring launched its beauty division
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  Speaker 1: after buying perfume maker Creed for three and a half
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  Speaker 1: billion euros.
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  Speaker 2: That was all part of its plan to compete with
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  Speaker 2: LVMH in beauty.
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  Speaker 1: But twelve months can be a very long time in
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  Speaker 1: the business world. Because Kerring has done a four point
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  Speaker 1: eighty Yeah it's.
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  Speaker 2: New CEO's come in with a plan to car Keyrings
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  Speaker 2: nine and a half billion euro debt. So now Kerring
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  Speaker 2: has sold its beauty business to Loreal for four billion euros.
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  Speaker 2: That'll include the perfume maker Creed, but it will also
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  Speaker 2: give Loreel the long term rights to develop perfumes and
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  Speaker 2: cosmetics for Gucci, Billinciaga and Bataga. Venetta and be Man.
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  Speaker 2: This is Lorel's biggest acquisition ever.
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  Speaker 1: The new CEO enters the picture and wants Caring to
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  Speaker 1: focus only on its core strength and I'm talking luxury fashion.
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  Speaker 2: So what is the key learning here?
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  Speaker 1: Business leaders need to place different bets depending on what
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  Speaker 1: the business needs most at the time.
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  Speaker 2: When times are good, you want to plant the seeds
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  Speaker 2: for new growth. When things tighten up, you need to
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  Speaker 2: pull back and protect the roots.
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  Speaker 1: Now, Kerring's previous CEO wanted to diversify into beauty so
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  Speaker 1: the company was not totally dependent on luxury fashion sales.
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  Speaker 2: That made sense when Gucci is booming and the goal
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  Speaker 2: is to build new growth engine.
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  Speaker 1: But fast forward a couple of years and the picture
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  Speaker 1: has changed.
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  Speaker 2: Caring's demanded China dropped.
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  Speaker 1: It suffered a second quarter drop in sales of fifteen percent.
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  Speaker 1: So now under the new CEO, the priority has flipped
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  Speaker 1: to refocusing.
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  Speaker 2: Fuckdam. For many people, the thought of retirement is in
• 6:42
  Speaker 2: sixty seventy for those in the fire movements, sometimes it
• 6:45
  Speaker 2: can be in your thirties or forties. Please break it
• 6:47
  Speaker 2: down in the Flux app how many Australians are getting
• 6:50
  Speaker 2: on the trend. May shut it, download the Flux app
• 6:52
  Speaker 2: and check out the article.
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  Speaker 1: Thanks for listening, and we'll see you on Friday.