Latest / What the Flux / Qantas receives the largest fine in history | CSL's share price is bleeding | Soho House closes doors to public markets

Transcript

Qantas receives the largest fine in history | CSL's share price is bleeding | Soho House closes doors to public markets · What the Flux

• 0:05
  Speaker 1: This is what the Flux I'm Bratt and Justin and
• 0:08
  Speaker 1: at Wednesday, the twentieth of August does.
• 0:10
  Speaker 2: Boy, it's not just Canva who's got a big smile
• 0:12
  Speaker 2: on its face after seeing the spike in Figma's share price.
• 0:16
  Speaker 2: It's also Canva's big investors. For example, Blackbird, the Australian
• 0:20
  Speaker 2: VC fund, has revalued its holdings in Canvas up fourteen
• 0:23
  Speaker 2: and a half percent off the back of Figma's nazdac Ipo.
• 0:26
  Speaker 1: Smiles all around, b Man, Yep, fox man. Why does
• 0:29
  Speaker 1: the cost of living still feel high when inflation is
• 0:32
  Speaker 1: at a four year low? That is the question that
• 0:34
  Speaker 1: we explored in the Flux app today, because a falling
• 0:37
  Speaker 1: inflation rate doesn't actually mean prices are going down. If
• 0:40
  Speaker 1: you want to know why, make sure to download the
• 0:42
  Speaker 1: Flux app and check it out.
• 0:43
  Speaker 2: Three educational stories today. Juzzy boy, let's do it for
• 0:47
  Speaker 2: our first. Quantas has copped a record ninety million dollar
• 0:51
  Speaker 2: fine for its illegal sackings of staff, and more than
• 0:53
  Speaker 2: half of the money is going straight to the Transport
• 0:56
  Speaker 2: Workers union.
• 0:57
  Speaker 1: Talk about turbulence, b Man, and this one in the
• 0:59
  Speaker 1: court room. It so tell me more so.
• 1:01
  Speaker 2: Quantus is the Aussie airline founded in nineteen twenty. Now,
• 1:04
  Speaker 2: you may remember during peak COVID in twenty twenty, Quantus
• 1:07
  Speaker 2: made one eight hundred and twenty one ground workers redundant.
• 1:10
  Speaker 1: The problem is, be Man, they weren't truly redundant.
• 1:13
  Speaker 2: Well, Quantas outsourced their roles instead, and last year the
• 1:16
  Speaker 2: Federal court ruled that that was illegal.
• 1:18
  Speaker 1: And after the court made this decision, Quantus agreed to
• 1:21
  Speaker 1: pay one hundred and twenty million dollars to the affected workers.
• 1:23
  Speaker 1: But now a.
• 1:24
  Speaker 2: Federal court judge hit Quantus with a record ninety million
• 1:27
  Speaker 2: dollar penalty and that's the biggest.
• 1:29
  Speaker 1: Penalty ever under the Fair Work.
• 1:31
  Speaker 2: Act and juziboit fifty million dollars of the penalty will
• 1:34
  Speaker 2: go to the Transport Workers Union.
• 1:36
  Speaker 1: The judge's goal with this decision is for the mull
• 1:38
  Speaker 1: Art to fund future unfair dismissile case.
• 1:40
  Speaker 2: Interesting, So what is the key learning here?
• 1:42
  Speaker 1: The power dynamic between corporates and unions may just be shifted.
• 1:46
  Speaker 2: And the legal battleground just got a lot more intense.
• 1:49
  Speaker 1: You see, b Man unions have traditionally relied on membership
• 1:52
  Speaker 1: fees and donations to fund their legal.
• 1:54
  Speaker 2: Battles, and as a result, it only picked the cases
• 1:56
  Speaker 2: it could afford to win.
• 1:57
  Speaker 1: But b man at the fifty million dollars that were
• 2:00
  Speaker 1: to the Transport Workers Union means they suddenly have deeper
• 2:02
  Speaker 1: pockets to chase down more breaches.
• 2:05
  Speaker 2: Think under payments or wage theft or illegal sackings.
• 2:08
  Speaker 1: And for Corporate Australia this could become a big fat
• 2:11
  Speaker 1: wake up call.
• 2:12
  Speaker 2: And Quantus isn't the first company that has dealt with
• 2:14
  Speaker 2: wage and employment issues over the past decade.
• 2:16
  Speaker 1: Nope. Remember there was Melbourne UNI who'd underpaid more than
• 2:18
  Speaker 1: twenty five thousand employees to the tune of seventy two mil.
• 2:21
  Speaker 2: There was George Cullen Barris's restaurant made Establishment, which admitted
• 2:25
  Speaker 2: to underpaying employees nearly eight million dollars.
• 2:27
  Speaker 1: And of course your fave burger Grilled Yeah, also underpaid
• 2:30
  Speaker 1: their trainee starf so Jusi Boy.
• 2:32
  Speaker 2: With more cash to pursue cases, you can imagine more
• 2:34
  Speaker 2: cases coming to the forefront.
• 2:36
  Speaker 1: And potentially many other companies becoming the next headline.
• 2:39
  Speaker 2: For our second story. CSL, the Australian biotech giant, is
• 2:43
  Speaker 2: cutting almost three thousand staff globally as part of the
• 2:46
  Speaker 2: biggest shakeup of the last decade.
• 2:48
  Speaker 1: Talk about corporate blood. Letting be mehn, tell me more
• 2:51
  Speaker 1: about this one, all right.
• 2:52
  Speaker 2: So CSL is a Melbourne founded biotech company listed on
• 2:55
  Speaker 2: the ASX with a market value of more than one
• 2:57
  Speaker 2: hundred and thirty billion dollars and.
• 2:59
  Speaker 1: This makes its third largest company behind BHP and Combat.
• 3:03
  Speaker 2: Now, Dazboy, CSL has one heck of a biotech empire.
• 3:07
  Speaker 1: It's got CSL Bearing, which is the core business that
• 3:09
  Speaker 1: specializes in plasma drive therapies which helps people with bleeding disorders.
• 3:13
  Speaker 1: Then it's got Securis, which is its influenza r and
• 3:16
  Speaker 1: this is the second largest influenza vaccine company in the world.
• 3:20
  Speaker 2: And finally it's got CSL. And finally it's got CSL
• 3:23
  Speaker 2: V four, which focuses on iron deficiency and the man.
• 3:26
  Speaker 1: In the past fifteen years have been bleeding terrific for CSL,
• 3:29
  Speaker 1: with revenue climbing from five point three billion US dollars
• 3:32
  Speaker 1: in twenty fourteen over fifteen point six bill in twenty
• 3:34
  Speaker 1: twenty five.
• 3:35
  Speaker 2: For the last year for CSL has been quite a
• 3:37
  Speaker 2: bruising one Josey Boy.
• 3:38
  Speaker 1: In fact, that share prices slid around twenty percent.
• 3:41
  Speaker 2: So now CSL is cracking open the scalpel and making
• 3:43
  Speaker 2: some big cuts across the company.
• 3:45
  Speaker 1: First, it will demerge Cecuras into a separately listed ASX
• 3:48
  Speaker 1: company in the twenty twenty six financial year.
• 3:50
  Speaker 2: Then it also will cut three thousand jobs for about
• 3:53
  Speaker 2: fifteen percent of Star, and.
• 3:54
  Speaker 1: Finally it said it has plans to cut its R
• 3:56
  Speaker 1: and D spending.
• 3:57
  Speaker 2: Now, these moves are supposed to save CSL five h
• 4:00
  Speaker 2: and fifty million dollars a year by twenty twenty seven.
• 4:02
  Speaker 1: But be man, here's the kickout. It'll cost them six
• 4:05
  Speaker 1: hundred and twenty mil up front just to make these cuts.
• 4:08
  Speaker 2: Fascinating, So what is the key learning here?
• 4:10
  Speaker 1: Sometimes the best way to save money long term starts
• 4:12
  Speaker 1: with copying big expenses short term.
• 4:15
  Speaker 2: You see, companies often announce big job cuts and closures
• 4:18
  Speaker 2: with promises of cost savings down the track.
• 4:20
  Speaker 1: But those savings don't come for free. Well, there are
• 4:23
  Speaker 1: things like redundancy payments. There are lease terminations for shutting down.
• 4:26
  Speaker 2: Facilities, there are right downs of underperforming assets. As long
• 4:30
  Speaker 2: as the long term gain is worth it, be man
• 4:32
  Speaker 2: a juzzy boy. According to Gartner, only about forty three
• 4:35
  Speaker 2: percent of cost reduction programs hit their annual targets in
• 4:38
  Speaker 2: the first year.
• 4:39
  Speaker 1: And then sustaining those savings over a longer period. Success
• 4:42
  Speaker 1: rate plummets to just four point seven percent. So be
• 4:44
  Speaker 1: Man investors need to assess whether they believe the promised
• 4:47
  Speaker 1: cost savings are actually achievable.
• 4:49
  Speaker 2: And based on the ten percent hit to CSL share price,
• 4:51
  Speaker 2: doesn't look like they're picking up what CSL is putting down.
• 4:55
  Speaker 1: For our third and final story, Soho House, the exclusive
• 4:59
  Speaker 1: members only international club, is going private again after battling
• 5:03
  Speaker 1: in the public markets for the last four years.
• 5:05
  Speaker 2: Exclusivity and stock market investors don't seem to mesh, so
• 5:09
  Speaker 2: tell me.
• 5:09
  Speaker 1: More, okay. So so Her House began in London in
• 5:11
  Speaker 1: nineteen ninety five as a private members club for creatives
• 5:14
  Speaker 1: and juzzy boy. It developed a reputation of being ultra
• 5:17
  Speaker 1: exclusive and ultra expensive. Members go there to work and
• 5:20
  Speaker 1: socialize and most importantly, make sure you know that their
• 5:23
  Speaker 1: members and the man at Soho House has hosted everyone
• 5:26
  Speaker 1: from Lady Gaga to Prince Harry, Megan Markele.
• 5:29
  Speaker 2: Which is either a massive flex or a warning depending
• 5:32
  Speaker 2: on your taste.
• 5:33
  Speaker 1: And be Man. In twenty twenty one, so Her House
• 5:35
  Speaker 1: listed on the new York stuck Exchange at evaluation of
• 5:37
  Speaker 1: two point eight billion US dollars, but since then its
• 5:39
  Speaker 1: shares have fallen forty five percent and it's pretty much
• 5:42
  Speaker 1: exclusively lost money except for this quarter where it made
• 5:45
  Speaker 1: its first public quarterly profit.
• 5:46
  Speaker 2: But juziboy, it feels too little, too late.
• 5:48
  Speaker 1: YEP, So now so House a CEO and hotel behemoth
• 5:51
  Speaker 1: MCR are taking so House private again in a two
• 5:54
  Speaker 1: point seven billion US dollar deal, including death.
• 5:56
  Speaker 2: Because juziboy, not every business is built for the pressure
• 5:59
  Speaker 2: of public markets.
• 6:00
  Speaker 1: So what is the key learning here?
• 6:02
  Speaker 2: Exclusivity cells until you try to scale it.
• 6:06
  Speaker 1: Yeah. One of the trickiest balancing acts in business is
• 6:08
  Speaker 1: for companies to maintain exclusivity while chasing growth, and once
• 6:11
  Speaker 1: you try to turn exclusivity into mass appeal, the shine
• 6:14
  Speaker 1: can often wear off.
• 6:15
  Speaker 2: Michael Cores struggled with the exact same thing.
• 6:17
  Speaker 1: YEP started as a high end luxury fashion label, but
• 6:20
  Speaker 1: in the twenty tens it went for aggressive growth.
• 6:22
  Speaker 2: In fact, since Michael Cores attempted to grow its revenue aggressively,
• 6:25
  Speaker 2: it has actually gone backwards.
• 6:27
  Speaker 1: Revenues falling twenty five percent compared to the same quarter
• 6:29
  Speaker 1: five years ago.
• 6:30
  Speaker 2: Ah.
• 6:31
  Speaker 1: The ironyre So our Sohouse has scaled over two hundred
• 6:34
  Speaker 1: and seventy thousand members. It has come at a cost
• 6:36
  Speaker 1: to its market value. The cost of living still feels
• 6:38
  Speaker 1: very high, despiting place of being at a four year
• 6:41
  Speaker 1: low and prices are not coming down soon. So how
• 6:44
  Speaker 1: can Ozzie escape the cost of living jail? Well, we
• 6:47
  Speaker 1: have it all covered in the Flux out today. To
• 6:49
  Speaker 1: make sure to download the app and check it out.
• 6:51
  Speaker 2: Thanks for listening and we'll see you on Friday.