Latest / What the Flux / GYG's shares lose its spice | Mainland's cheesy acquisition | Inghams gets roasted

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GYG's shares lose its spice | Mainland's cheesy acquisition | Inghams gets roasted · What the Flux

• 0:05
  Speaker 1: This is what the flucks.
• 0:06
  Speaker 2: I'm Brandon, I'm justin and it's Monday, twenty fifth of August.
• 0:09
  Speaker 1: Jazzy Boy, Apple and Google the cage fight it rolls on.
• 0:13
  Speaker 1: In Google's latest phone release, They've added an AI camera
• 0:16
  Speaker 1: coach that tells you the best framing and lighting for
• 0:19
  Speaker 1: your picks. And just to rub salt into the wound,
• 0:21
  Speaker 1: Google's running ads poking fun and Apple's AI without ever
• 0:26
  Speaker 1: saying the word Apple. Meanwhile, I'm just happy if Siri
• 0:29
  Speaker 1: manages to set my alarm without any glitches going on.
• 0:32
  Speaker 2: True, man, nothing says happy birthday like free food and
• 0:35
  Speaker 2: free drinks from your favorite retailers. And today, in the
• 0:38
  Speaker 2: Flux app, we've just released an article of the fifteen
• 0:40
  Speaker 2: food and drink freebies that you can snag on your birthdays.
• 0:43
  Speaker 2: Make sure to check it out and save the list
• 0:45
  Speaker 2: for when your birthday rolls around.
• 0:47
  Speaker 1: Three celebratory stories today, Juzzy boy, let's do it for
• 0:51
  Speaker 1: our first. Gusmin Egomez shares have tumbled nineteen percent after
• 0:56
  Speaker 1: its sales growth fell short of its big expectations.
• 1:00
  Speaker 2: Walk grab the popcorn. This one has got real spicy,
• 1:03
  Speaker 2: b man, So tell me more.
• 1:04
  Speaker 1: All right, So Cousmini Gomez Akagyg is the Mexican fast
• 1:08
  Speaker 1: food chain that started in Sydney in two thousand and six.
• 1:11
  Speaker 2: And now dishes up burritos and bowls in more than
• 1:13
  Speaker 2: two hundred and ten restaurants across Australia.
• 1:15
  Speaker 1: Joseiboit. GYG listed in twenty twenty four at evaluation of
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  Speaker 1: two point two bill and it was the biggest and
• 1:21
  Speaker 1: most controversial IPO of the year.
• 1:23
  Speaker 2: Yep. Some investors were convinced this was about ten times
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  Speaker 2: overpriced and.
• 1:26
  Speaker 1: Other investors thought it was a tasty bargain. But now
• 1:29
  Speaker 1: twenty months after its IPO, investors have got some chili
• 1:33
  Speaker 1: sweats yep. GYG revealed its sales in the first seven
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  Speaker 1: weeks of FI twenty six grew just three point seven percent.
• 1:39
  Speaker 2: And that was well below the market expectations of seven
• 1:42
  Speaker 2: point six percent growth and josieboit.
• 1:44
  Speaker 1: These results sent to GYG shares diving nineteen percent in
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  Speaker 1: a single day last week.
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  Speaker 2: In fact, be man, their share price is back near
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  Speaker 2: the ipo price of twenty two bucks.
• 1:54
  Speaker 1: It's not all soggy natchos, though. GYG cracked one billion
• 1:57
  Speaker 1: dollars in sales for the very first time I'm in
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  Speaker 1: Fya twenty five.
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  Speaker 2: And it's and its same store sales in Australia rose
• 2:04
  Speaker 2: nearly ten percent, but its US operations have become a
• 2:07
  Speaker 2: halapino field headache. Yeah, their losses doubled over thirteen million bucks,
• 2:12
  Speaker 2: and the man with their new store openings, it's expected
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  Speaker 2: that the losses will deepen even more. Next minute, investors
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  Speaker 2: ran for the Clinder with shares dropping nineteen percent.
• 2:22
  Speaker 1: Oh my god, Salita Salada Salida is exiting in Spanish.
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  Speaker 1: Next minute, investors ran for the Salida with shares falling
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  Speaker 1: nineteen percent.
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  Speaker 2: So what is the key leading here?
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  Speaker 1: Success at home doesn't always translate overseas.
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  Speaker 2: Man. Remember when gag was ipoing and it pitched itself
• 2:40
  Speaker 2: as a global competitor in the Mexican fast food market.
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  Speaker 1: I do. It had plans to scale in markets like
• 2:45
  Speaker 1: Singapore and Japan and.
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  Speaker 2: Most ambitiously, the Big Enchilada aka the United States.
• 2:50
  Speaker 1: And investors did love that idea.
• 2:53
  Speaker 2: Yeah, but now that it's racking up big losses, some
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  Speaker 2: investors are losing faith already.
• 2:57
  Speaker 1: And Jazzy Boys, success at home doesn't always translate over sea.
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  Speaker 2: Yeah. Think of Starbucks, which dominates in the US and
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  Speaker 2: came to Australia in two thousand with its Grande American
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  Speaker 2: business model.
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  Speaker 1: And after eight years it closed two thirds of its
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  Speaker 1: stores because it struggled to adapt to the local environment.
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  Speaker 2: So b Man Gog needs to balance their ambition for
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  Speaker 2: growth with the realities and costs of scaling abroad.
• 3:17
  Speaker 1: And if they don't, investors, maybe jumping off this burrito for.
• 3:21
  Speaker 2: Our second story. Fonterra is selling off its mainland cheese
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  Speaker 2: and butter brands to a French dairy giant in a
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  Speaker 2: three point eight billion New Zealand dollar deal.
• 3:31
  Speaker 1: Say cheese, jusey boy, and say a little bit of
• 3:33
  Speaker 1: bonjour as well.
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  Speaker 2: Tell me more, okay. So Fonterra is New Zealand's massive
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  Speaker 2: dairy co op. It was founded in two thousand and one.
• 3:40
  Speaker 1: And one of the biggest dairy exporters.
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  Speaker 2: In the world. And you may know Fonterra's mainland group
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  Speaker 2: because it makes some of the Aussie and Kiwi staples
• 3:48
  Speaker 2: that you've probably got in your fridge.
• 3:49
  Speaker 1: Right now, we'd be talking mainland cheese, it's just perfect
• 3:53
  Speaker 1: Italiano and Western Star butter.
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  Speaker 2: But now Fonterra has sold its mainland group consumer brands
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  Speaker 2: to the French dairy behemoth Lactalis the three point eight
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  Speaker 2: billion New Zealand dollars. And who are these lactiles folks
• 4:06
  Speaker 2: you speak of?
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  Speaker 1: They own Cracker Barrel and about twenty other European cheese brand.
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  Speaker 2: And in Australia they're the owner of Paul's Milk and
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  Speaker 2: Oak's Flavored Milk as well.
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  Speaker 1: The world's largest dairy company.
• 4:16
  Speaker 2: And interestingly, b maan Fonterra considered listing mainland on the ASX.
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  Speaker 1: But then it got into a hot bidding war and
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  Speaker 1: decided that a trade sale offered the best value.
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  Speaker 2: Interesting, So what is the key learning here?
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  Speaker 1: When a company wants to sell off a division, it
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  Speaker 1: needs to weigh up the two main avenues of selling
• 4:33
  Speaker 1: out a trade sale or an IPO.
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  Speaker 2: A trade sail means selling to another company.
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  Speaker 1: It's often a strategic buyer in the same industry who
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  Speaker 1: sees value in quoing their entire portfolio.
• 4:43
  Speaker 2: And the benefit of this is it's usually done with
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  Speaker 2: speed and with certainty.
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  Speaker 1: But it's hard to know whether you actually get the
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  Speaker 1: best price if you're the seller because they never went
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  Speaker 1: to the public market, and.
• 4:52
  Speaker 2: Of course bman, if you ipo, that's when you split
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  Speaker 2: out the division and list it on a stock exchange.
• 4:57
  Speaker 1: And it allows investors to buy in.
• 4:58
  Speaker 2: IPOs can potentially unlock higher long term value if the
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  Speaker 2: market's hot, but they're riskier and they're slower.
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  Speaker 1: In other words, Fonterra avoided rolling the dice on market
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  Speaker 1: sentiment and.
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  Speaker 2: Chose the certainty of cash in hand today.
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  Speaker 1: For our third and final story, shares in Ingham's, the
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  Speaker 1: chicken wholesale supplier, have taken a roasting due to a
• 5:17
  Speaker 1: breakdown in its relationship with Woolworths.
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  Speaker 2: The investors have come home to roost b Man and
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  Speaker 2: they aren't exactly clucking. So tell me more so.
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  Speaker 1: Ingham's is Australia's largest chicken process out founded by Walter
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  Speaker 1: Ingham back in nineteen eighteen, and it has over two.
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  Speaker 2: Hundred and eighty six facilities across Australia and pretty much
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  Speaker 2: supplies chicken everywhere.
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  Speaker 1: We're talking supermarkets, restaurants, fast food chains across Australia and
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  Speaker 1: New Zealand.
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  Speaker 2: But BMN Ingham saw it shares plunged twenty percent in
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  Speaker 2: a single day last week, or two hundred and sixty
• 5:46
  Speaker 2: milli in value. And what was the reason, mister expert, Well,
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  Speaker 2: their fo twenty five numbers were pretty undercooked. Revenue down
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  Speaker 2: one and a half percent, but net profit was down
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  Speaker 2: ten percent.
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  Speaker 1: You see Juzi boit Woolly's, its biggest customer, decided to
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  Speaker 1: diversify away to other suppliers.
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  Speaker 2: Which means Ingham's had too many chickens which were dumped
• 6:04
  Speaker 2: into the wholesale.
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  Speaker 1: Market and that really hurt their margins.
• 6:06
  Speaker 2: So what is the key learning here?
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  Speaker 1: Customer concentration risk occurs when a company relies heavily on
• 6:12
  Speaker 1: one or just a few customers for the bulk of
• 6:15
  Speaker 1: its revenue.
• 6:16
  Speaker 2: And be man. It leaves those companies vulnerable if their
• 6:18
  Speaker 2: customers change contracts or renegotiate terms, or just cut volumes,
• 6:22
  Speaker 2: like Woolies.
• 6:23
  Speaker 1: So while Woolies is still their biggest customer, cutting volumes
• 6:26
  Speaker 1: has really hurt Ingham's sales and margins and share price.
• 6:30
  Speaker 1: That's because a high customer concentration can often be a
• 6:33
  Speaker 1: signal of risk for an investor.
• 6:34
  Speaker 2: Fox Sam, there are hundreds of dollars worth of preebees
• 6:38
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• 6:40
  Speaker 2: range your blut and drink retailers. We're talking Boost Juice,
• 6:42
  Speaker 2: Flora Gene and fifteen others as well. If you want
• 6:45
  Speaker 2: to know how you can scourse some major freebies on
• 6:47
  Speaker 2: your birthday, make sure to download the Flux out and
• 6:49
  Speaker 2: save the article.
• 6:50
  Speaker 1: Thanks for listening, and we'll see you on Wednesday.