Latest / What the Flux / Telstra’s $1 billion turnaround | Bunnings & Kmart carry Wesfarmers (once again) | Nikola EV truck files for bankruptcy

Transcript

Telstra’s $1 billion turnaround | Bunnings & Kmart carry Wesfarmers (once again) | Nikola EV truck files for bankruptcy · What the Flux

• 0:05
  Speaker 1: This is what the Flux.
• 0:06
  Speaker 2: I'm Brett and I'm Justin and it's Friday, the twenty
• 0:09
  Speaker 2: first of February.
• 0:10
  Speaker 1: Juzzy boy.
• 0:10
  Speaker 3: When it comes to e commerce in Australia, get this.
• 0:13
  Speaker 3: The average online order value has dropped by twenty three
• 0:16
  Speaker 3: percent in just the last two years. That's according to
• 0:19
  Speaker 3: courier platform ship It. They've analyzed millions of orders and
• 0:22
  Speaker 3: they reckon a mix of economic pressures and intense global
• 0:25
  Speaker 3: competition is the blame.
• 0:27
  Speaker 2: The Shean's t moves. They're coming for Australian retailers. Sick
• 0:30
  Speaker 2: and fast, Flux Sam once again, it is Briday, which
• 0:33
  Speaker 2: means we're dishing out fifty dollars to the smartest person
• 0:36
  Speaker 2: in the Flux community. That's right. We're going to send
• 0:38
  Speaker 2: a random notification today and the first person to answer
• 0:41
  Speaker 2: three business or finance questions correctly as the fastest win
• 0:44
  Speaker 2: fifty bucks to get off the weekend. To make sure
• 0:46
  Speaker 2: to turn on your notifications, download the Flux app and
• 0:48
  Speaker 2: be ready to win.
• 0:49
  Speaker 1: Three prepared stories today. Juzzy boy, Let's do it for
• 0:52
  Speaker 1: our first.
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  Speaker 3: Telstra has dialed up a net profit of just over
• 0:56
  Speaker 3: one billion dollars for the last six months after seeing
• 0:59
  Speaker 3: growth in it it's mobile business and saying goodbye to Foxtael,
• 1:03
  Speaker 3: not to.
• 1:03
  Speaker 2: Mention a heap of cost cutting Beman, but.
• 1:06
  Speaker 1: Do go on well.
• 1:06
  Speaker 3: Telster is Australia's biggest telco and one of the most
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  Speaker 3: recognizable brands in the entire nation.
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  Speaker 2: It provides retail services to over twenty two million Australian customers.
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  Speaker 3: But Juzzy Boy. Over the past few years, Telstra has
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  Speaker 3: been making some changes.
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  Speaker 2: In fact, be Man. As part of its T twenty
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  Speaker 2: five strategy, it cut nine percent of its workforce.
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  Speaker 1: And it seemed to work so far for the big
• 1:27
  Speaker 1: T Yeah.
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  Speaker 2: Its revenues managed to grow one and a half percent
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  Speaker 2: over the last six months to eleven and a half
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  Speaker 2: billion dollars and.
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  Speaker 3: As net profit jumped six and a half percent to
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  Speaker 3: one point three bill not to mention.
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  Speaker 2: The sale of Foxtel and its VC during this period.
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  Speaker 3: Now, apart from these one off zingers, Heelster praised its
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  Speaker 3: consumer division as the MVP and be man.
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  Speaker 2: With the T twenty five turnaround on track, Heelster will
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  Speaker 2: buy back seven hundred and fifty million dollars worth of shares.
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  Speaker 3: And it has jacked up its dividend by more than
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  Speaker 3: five percent.
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  Speaker 2: In other words, investors are getting a little dividends week
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  Speaker 2: for sticking around.
• 2:01
  Speaker 1: So what is the key learning here?
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  Speaker 2: Investors ten dislot companies into three big categories. You've got
• 2:06
  Speaker 2: the growth, You've got the income, or you've got the
• 2:08
  Speaker 2: value company, a little bit like choosing a mobile plan exactly.
• 2:11
  Speaker 2: On the one hand, you've got growth companies. These are
• 2:13
  Speaker 2: the companies that are expect to grow faster than the
• 2:16
  Speaker 2: market average.
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  Speaker 3: They're the ones reinvesting every darn dollar back into the
• 2:20
  Speaker 3: business instead of paying out dividend.
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  Speaker 2: Think Meta, who paid its first dividend in twenty twenty four,
• 2:25
  Speaker 2: twelve years after going public.
• 2:26
  Speaker 1: And on the other hand, you've got income stocks.
• 2:28
  Speaker 2: These are the ones like Telstra that pay out a
• 2:30
  Speaker 2: portion of their profits to shareholders on the regular.
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  Speaker 1: And jaz boid.
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  Speaker 3: These income stocks typically attract investors who are keen on
• 2:37
  Speaker 3: regular dividend.
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  Speaker 2: Payouts think retirees.
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  Speaker 1: For example, Telstra's share price has only increased just over
• 2:43
  Speaker 1: four percent over the past five years before yesterday's update.
• 2:46
  Speaker 2: But be manufacturing all those dividend payouts, and shareholders have
• 2:49
  Speaker 2: pocketed nearly a dollar per share in cash over that
• 2:52
  Speaker 2: same five year period.
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  Speaker 3: And of course you've got the value investors, the ones
• 2:55
  Speaker 3: who look to invest in undervalued companies based on their
• 2:59
  Speaker 3: financials be man.
• 3:00
  Speaker 2: With Telstra's latest result, it's giving income focused investors even
• 3:03
  Speaker 2: more reasons to stay on the dial for.
• 3:06
  Speaker 3: Our second story of West Farmers has seen its sales
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  Speaker 3: and earnings jump in the first half of the financial
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  Speaker 3: year thanks to its goat performers Bunnings and Kmart.
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  Speaker 2: Bunnings and Kmart are the gifts that keep on giving
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  Speaker 2: for wezi Is, So tell me what well.
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  Speaker 3: West Farmers is the WA based owner of some of
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  Speaker 3: the biggest named brands in Australian retail.
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  Speaker 2: As mentioned, they owned Bunnings and Kmart.
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  Speaker 3: They've also got their b grader as Juzzy Boy, your targets,
• 3:29
  Speaker 3: your price lines, your silk laser clinics, and they've also
• 3:31
  Speaker 3: got office works, which i'd say is an a grader and.
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  Speaker 2: Formerly they owned Catch as well, which they announced plants
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  Speaker 2: to shut down last.
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  Speaker 1: Month the Juzzy Boy.
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  Speaker 3: It also owns industrial and safety businesses as well as
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  Speaker 3: chemicals and energy and fertilizer businesses.
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  Speaker 2: Your Clean Heats, your Blackwards.
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  Speaker 3: West Farmers has announced its sales for the last half
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  Speaker 3: jumped by three point six percent to over twenty three
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  Speaker 3: and a half billion dollars, and off.
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  Speaker 2: The back of these sales it delivered a tasting their
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  Speaker 2: profit of just done that one and a half billion baccarinis.
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  Speaker 3: Enough to buy every single kmart dupe and still have
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  Speaker 3: change left over for a Bunning snag or three and
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  Speaker 3: be Man.
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  Speaker 2: West Farmer's reckons. A key part of this success is
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  Speaker 2: its pricing strategy of every day low.
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  Speaker 1: Prices fascinating stuff. So what is the key learning here?
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  Speaker 2: Consistency builds trust while discounts create urgency.
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  Speaker 3: You see Bunnings and came up primarily user pricing strategy
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  Speaker 3: called everyday low prices.
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  Speaker 2: The idea is they consistently offer products at the lowest prices.
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  Speaker 3: And it means they don't rely on frequent promotions or
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  Speaker 3: discounts be Man.
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  Speaker 2: This is in contrast to the other pricing strategy, which
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  Speaker 2: is called high low pricing.
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  Speaker 3: This one is when companies set higher prices but offer
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  Speaker 3: discounts and promotions.
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  Speaker 2: And b Man. Historically, more than forty percent of groceries
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  Speaker 2: in supermarkets are purchased on special or promotion each week.
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  Speaker 2: According to Nilson, and.
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  Speaker 3: While high low pricing attracts deal hunters. It also means
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  Speaker 3: shoppers aren't particularly loyal.
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  Speaker 2: Yeah, they will happily ditch coals for woolies if butter
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  Speaker 2: is fifty percent cheaper.
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  Speaker 3: And based on these numbers, it's safe to say West
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  Speaker 3: Farmers has mastered the art of keeping OSSI's spending.
• 4:57
  Speaker 2: For our third and final story, Nicola, the electric trucking startup,
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  Speaker 2: has filed for bankruptcy in the US after struggling to
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  Speaker 2: raise money or find a buyer.
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  Speaker 3: The old Tesla of trucks has run out of charge.
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  Speaker 3: Tell me what's going on here?
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  Speaker 2: Okay? So Nicola launched back in twenty fourteen with big
• 5:12
  Speaker 2: bold plans to revolutionize trucking with hydrogen electric batteries and point.
• 5:18
  Speaker 3: Nicola went public via a spack a blank check company
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  Speaker 3: that was valued at thirty billion dollars US, and that
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  Speaker 3: was in June twenty twenty.
• 5:26
  Speaker 2: Man name more iconic duo than spacks and overinflated valuations.
• 5:30
  Speaker 1: But Jazzy boy.
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  Speaker 3: Now Nicola has announced it will file for bankruptcy after
• 5:34
  Speaker 3: it could not raise money or find a new buyer.
• 5:36
  Speaker 2: And be man. It isn't that surprising because Nicola has
• 5:39
  Speaker 2: been facing scandals for years.
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  Speaker 3: Well, it has been accused of making exaggerated claims about
• 5:44
  Speaker 3: its technology.
• 5:44
  Speaker 2: Yep, they claimed they built the truck from the.
• 5:47
  Speaker 3: Grounder, but it was uncovered that they actually bought the
• 5:49
  Speaker 3: batteries from another company.
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  Speaker 2: What about when they released a marketing video showing their
• 5:53
  Speaker 2: truck driving.
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  Speaker 1: But in reality the truck was just rolling down a hill.
• 5:56
  Speaker 2: But be man now, Nichola says it couldn't even scrape
• 5:58
  Speaker 2: together enough cash to keep the hydrogen engines pairing.
• 6:02
  Speaker 3: And this is all part of the natural evolution of
• 6:05
  Speaker 3: a new industry.
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  Speaker 2: So what is the key learning here?
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  Speaker 1: When a shiny new.
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  Speaker 3: Industry takes off, it often attracts a flood of startups,
• 6:12
  Speaker 3: all elbowing each other to become the next big thing.
• 6:14
  Speaker 2: But den b man. As the industry matures and competition intensifies,
• 6:17
  Speaker 2: funding becomes harder to secure and.
• 6:19
  Speaker 1: A weaker players struggle to survive, and.
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  Speaker 2: This leads to consolidation where only the strongest companies remain standing.
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  Speaker 3: And this is what we're seeing in the electric vehicle
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  Speaker 3: market right now. And startup ev companies like Fiska, Canoe,
• 6:31
  Speaker 3: Weltmeister all household names. Jazzy Boy, they've all declared bankruptcy
• 6:36
  Speaker 3: over the past few years.
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  Speaker 2: After raising and burning billions of dollars.
• 6:39
  Speaker 3: Of cash, and now Nikola joins the pack. Slash the
• 6:43
  Speaker 3: scrap heap.
• 6:44
  Speaker 2: Fox down, get on your phone, turn it off silent
• 6:46
  Speaker 2: so you can be the first person to answer our
• 6:48
  Speaker 2: three questions, and we've beducks this week. It's the perfect
• 6:51
  Speaker 2: way to test your knowledge and also come away with
• 6:53
  Speaker 2: some cash.
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  Speaker 3: Thanks for listening and we'll see you on Monday.