Latest / What the Flux / Kathmandu's toughest climb yet | Inflation jump may put RBA cut on hold | Lego's £200m fun-house

Transcript

Kathmandu's toughest climb yet | Inflation jump may put RBA cut on hold | Lego's £200m fun-house · What the Flux

• 0:05
  Speaker 1: This is what the Flux I'm brand justin. It's Friday
• 0:08
  Speaker 1: at twenty six to September boy.
• 0:10
  Speaker 2: Amz Bank has been in boiling hot water lately, between
• 0:13
  Speaker 2: firing thousands of staff and then paying two hundred and
• 0:15
  Speaker 2: forty million bucks in fines to ask but get this one.
• 0:19
  Speaker 2: Earlier this week, Anson sent an email to All starf
• 0:21
  Speaker 2: advising them that their Microsoft team's course will now be
• 0:25
  Speaker 2: recorded and stored. Next minute, the Financial Sector Union got
• 0:29
  Speaker 2: involved and Ainsen has backtrack, saying that it was all
• 0:32
  Speaker 2: one big miscommunication Flux them.
• 0:35
  Speaker 1: As we get to the end of the month, it's
• 0:36
  Speaker 1: often the time when we all look at our ban
• 0:38
  Speaker 1: account and think where the hell did my money go. Well,
• 0:40
  Speaker 1: with the Flux budgeting tool, you can track all your
• 0:43
  Speaker 1: expenses and savings in the one place and see actually
• 0:45
  Speaker 1: where your money went with different categories for all your spending,
• 0:48
  Speaker 1: as well as a tracker for all your subscriptions. So
• 0:50
  Speaker 1: if you want to get on top of your money
• 0:52
  Speaker 1: and kick off October on the right foot, make sure
• 0:54
  Speaker 1: to download the Flux app and check out the budget.
• 0:56
  Speaker 2: And three convenience stories Today. Juzzy boy, let's do it
• 0:59
  Speaker 2: for our first Catmando's owner is trying to climb out
• 1:03
  Speaker 2: of the red, but investors are pushing for some serious baggage. Drop.
• 1:06
  Speaker 1: Everything's always on sale at Catmand Is it a b man?
• 1:09
  Speaker 1: So we will okay so.
• 1:10
  Speaker 2: KMD Brands is the company behind Catman Do and rip
• 1:13
  Speaker 2: Curl and US hiking boot maker Obos and it.
• 1:16
  Speaker 1: Was founded in nineteen eighty seven in New Zealand, but
• 1:19
  Speaker 1: it's grown into a global retailert with over three hundred stores.
• 1:22
  Speaker 2: But juz boy, the last couple of years have been
• 1:24
  Speaker 2: rough for KMD Brands.
• 1:25
  Speaker 1: Rougher than a high cup mount Everest in a Catman
• 1:27
  Speaker 1: Do jacket.
• 1:28
  Speaker 2: Yeah. KMD reported a full year loss for the twelve
• 1:31
  Speaker 2: months to July thirty first of more than ninety three
• 1:34
  Speaker 2: million New Zealand dollars.
• 1:36
  Speaker 1: Compare that with a loss of just over forty eight
• 1:38
  Speaker 1: million New Zealand dollars in twenty twenty four.
• 1:40
  Speaker 2: In fact, only one of its three divisions, Rip Curl,
• 1:42
  Speaker 2: was profitable for the year.
• 1:43
  Speaker 1: So now KMD has a big focus on cutting its
• 1:46
  Speaker 1: costs and getting back to profitability.
• 1:48
  Speaker 2: Yep, it's closing at least twenty one underperforming stores to
• 1:52
  Speaker 2: stop the bleeding. But despite the green shoots in the
• 1:55
  Speaker 2: first seven weeks of this financial year. It hasn't stopped
• 1:57
  Speaker 2: some of kmd's biggest investors pushing or a sell off
• 2:00
  Speaker 2: of its non core assets. But KMD is holding tight
• 2:03
  Speaker 2: for now. So what is the key learning here? Divestment
• 2:06
  Speaker 2: is when a company sells off parts of its business
• 2:09
  Speaker 2: that aren't central to its main goals or operations.
• 2:11
  Speaker 1: For investors, divestment is often a way for a company
• 2:14
  Speaker 1: to free up cash and reduce their debts.
• 2:16
  Speaker 2: And also it helps refocus management's attention on the most
• 2:19
  Speaker 2: profitable areas of the business.
• 2:21
  Speaker 1: In kmd's case, some shareholders argue that it needs to
• 2:24
  Speaker 1: cut the brands and cut the fat that are not core.
• 2:27
  Speaker 2: Think Obos and It's a wet suit factory in Thailand.
• 2:30
  Speaker 1: By selling them b Man, KMD could pay down its
• 2:32
  Speaker 1: debt and focus on its core brands Catmandu and ripkeurl
• 2:36
  Speaker 1: i e.
• 2:36
  Speaker 2: The brands that customers know best.
• 2:38
  Speaker 1: And b Man's Successful divestments can sharpen a company's strategy.
• 2:41
  Speaker 2: But poorly timed sales risk giving away the future growth
• 2:44
  Speaker 2: at a bit of a discount. So the battle between
• 2:46
  Speaker 2: investors and km D leadership continues.
• 2:49
  Speaker 1: All the while KMD share prices plummeted fifty one percent
• 2:52
  Speaker 1: in the past twelve months. Fox, ma'am, we're very excited
• 2:56
  Speaker 1: to be partnering with black Rock to learn more about ETFs. Today,
• 2:59
  Speaker 1: we're excited to be chat with Melissa Vincent from black
• 3:01
  Speaker 1: Rocks at Private Wealth Team to chat with us all
• 3:03
  Speaker 1: about atfs. Melissa, Welcome, Hi, Thanks so much for having me. So, Melissa,
• 3:07
  Speaker 1: we know that ETFs have been growing rapidly in Australia
• 3:10
  Speaker 1: and also globally. But for someone who's heard of ETFs
• 3:12
  Speaker 1: but never bought one, how would you explain what they
• 3:14
  Speaker 1: actually are?
• 3:15
  Speaker 3: Yeah, So an ETF it stands for an exchange traded fund.
• 3:18
  Speaker 3: So I'll break that down a little bit for you.
• 3:20
  Speaker 3: So a fund is a basket of assets. Most commonly
• 3:24
  Speaker 3: I would say it would be stocks or bonds, but
• 3:26
  Speaker 3: you can get things like commodities or derivatives and they're
• 3:29
  Speaker 3: traded on an exchange. So in Australia that would be
• 3:31
  Speaker 3: the ASX or CBO, but say in the US it
• 3:34
  Speaker 3: would be New York Stocks Change or the NaSTA Act.
• 3:37
  Speaker 3: To name with you a little bit about ETFs. Typically
• 3:39
  Speaker 3: in the past they've been more passive, so they track
• 3:42
  Speaker 3: an index which is kind of a set of rules
• 3:44
  Speaker 3: that govern how an ETF would operate, and probably more
• 3:47
  Speaker 3: recently we've seen a massive rise in active ETFs. But
• 3:51
  Speaker 3: what's great about an ETF is they're fully transparent, so
• 3:54
  Speaker 3: you can see exactly what you're owning. You get to
• 3:56
  Speaker 3: see real time performance of the fund, and you're actually
• 3:59
  Speaker 3: getting to own those underlying assets which are in each
• 4:02
  Speaker 3: of the ETFs.
• 4:03
  Speaker 2: And what would you say is the benefit of investing
• 4:06
  Speaker 2: in an ETF as opposed to just lying direct equities.
• 4:10
  Speaker 3: I would say the biggest benefit to investing in an
• 4:12
  Speaker 3: ETF is diversification. So within a single trade, you get
• 4:17
  Speaker 3: access to a very large number of assets, which, first
• 4:21
  Speaker 3: of all, it spreads out your risk, which we like,
• 4:24
  Speaker 3: but it also expands your opportunity set right. So in
• 4:27
  Speaker 3: a single trade, I'm going to use sm P five
• 4:29
  Speaker 3: hundred as an example. If I have one thousand dollars,
• 4:32
  Speaker 3: I invest into a SMP five one hundred ETF, I
• 4:34
  Speaker 3: have access to five hundred of the largest stocks in
• 4:36
  Speaker 3: the US as opposed to a single stock. And that's
• 4:39
  Speaker 3: another great thing about ETFs. It gives you opportunity to
• 4:42
  Speaker 3: access things that aren't locally listed. So think us, think
• 4:45
  Speaker 3: emerging markets.
• 4:46
  Speaker 2: And if someone wanted to start investing in ETFs for
• 4:49
  Speaker 2: the first time, what would be the smartest first step
• 4:52
  Speaker 2: they could take.
• 4:53
  Speaker 3: Well, I think probably the smartest first step would be
• 4:56
  Speaker 3: to talk to your financial advisor. Advisors are a great
• 4:59
  Speaker 3: tool because they're able to look at your own personal
• 5:02
  Speaker 3: goals and aspirations and risk profile and kind of develop
• 5:06
  Speaker 3: something holistically for you. However, that's not the only way
• 5:09
  Speaker 3: that you can start investing. You can just set up
• 5:11
  Speaker 3: a Brokeridge account really really easy. There's so many available now,
• 5:14
  Speaker 3: which is awesome, and you would buy an ETF exactly
• 5:17
  Speaker 3: the way you would buy a stock. But I would
• 5:19
  Speaker 3: say just do your due diligence before you make any
• 5:21
  Speaker 3: investment decision, think about what you want to be exposed to,
• 5:24
  Speaker 3: and then have a look at all the products are
• 5:26
  Speaker 3: available now. The most important thing is just starting, as saying,
• 5:29
  Speaker 3: time in the market is better than timing the market,
• 5:32
  Speaker 3: so don't work for a dip. There's never going to
• 5:34
  Speaker 3: be the right time. Just start so then you can
• 5:36
  Speaker 3: start to get benefits of your compounding and so on.
• 5:39
  Speaker 1: Listen, let's talk shop. I want to know what are
• 5:40
  Speaker 1: some of the most common ETFs that people invest in.
• 5:43
  Speaker 3: I would say the most common ones would be kind
• 5:45
  Speaker 3: of a broad based easyfs. They capture a very large
• 5:48
  Speaker 3: part of the market. We see a lot of our
• 5:50
  Speaker 3: clients and investors using those as part of their core
• 5:53
  Speaker 3: portfolio because it provides diversified and typically lower costs to
• 5:58
  Speaker 3: a very very wide array of asset It's commonly S
• 6:01
  Speaker 3: and P five hundred ETF. I kind of already touched
• 6:03
  Speaker 3: them before asx so the Aussie version two hundred of
• 6:05
  Speaker 3: the largest stocks on the Aussie market. But then we're
• 6:08
  Speaker 3: also seeing a lot of exposures to other regions like
• 6:11
  Speaker 3: emerging markets Europe, and then fixed income that's a big
• 6:14
  Speaker 3: one for people who want income distributions. And then we
• 6:17
  Speaker 3: are seeing a lot of more thematic and precision ETFs
• 6:21
  Speaker 3: coming to market, so think gold or infrastructure.
• 6:23
  Speaker 1: Listen, thanks for time today. It's been great having you
• 6:25
  Speaker 1: on the pod and learning a lot more about ETFs.
• 6:27
  Speaker 2: Thank you so much for our second story. Inflation has
• 6:32
  Speaker 2: jumped back up to three percent, and just like that,
• 6:34
  Speaker 2: dreams of a rate cut next week may have just
• 6:37
  Speaker 2: completely gone.
• 6:39
  Speaker 1: Just when IZI thought they might get some breathing room again.
• 6:41
  Speaker 1: Inflation kills the mood. So what is going on here.
• 6:44
  Speaker 2: So jase way. The Australian Bureau of Statistics the ABS,
• 6:47
  Speaker 2: they track inflation monthly and quarterly, see how much our
• 6:50
  Speaker 2: everyday costs arising.
• 6:52
  Speaker 1: That means they compare the price of goods from the
• 6:53
  Speaker 1: same month or same quarter last year.
• 6:56
  Speaker 2: And they see if prices have gone up or gone
• 6:58
  Speaker 2: down or have been flat, and they man.
• 7:00
  Speaker 1: The ABS announced that annual inflation hit three percent in August,
• 7:03
  Speaker 1: which was up from two point eight percent in July.
• 7:05
  Speaker 2: Not what the Reserve Bank of Australia was wanting to hear.
• 7:08
  Speaker 1: No, no, no, and the biggest contributors were housing costs
• 7:11
  Speaker 1: up four and a half percent, food and drinks up
• 7:12
  Speaker 1: three percent, and alcohol and tobacco six percent jump.
• 7:15
  Speaker 2: But the biggest spike of them all that was electricity prices,
• 7:19
  Speaker 2: which jumped nearly twenty five percent for the year to August.
• 7:22
  Speaker 1: Mostly because the government rebates ran out.
• 7:24
  Speaker 2: And joseu wait. With annual inflation at three percent for August,
• 7:27
  Speaker 2: it's now getting very close to the top of the
• 7:29
  Speaker 2: RBA's two to three percent target inflation ban and.
• 7:32
  Speaker 1: That means economists reckon no rate cut in September.
• 7:35
  Speaker 2: And less than a one in two chance of a
• 7:37
  Speaker 2: rate cut in November two.
• 7:39
  Speaker 1: Because the worst thing the RBA could do right now
• 7:41
  Speaker 1: would be to cut rates and then raise them shortly after.
• 7:44
  Speaker 2: Yeah, So what's the key learning here?
• 7:45
  Speaker 1: Cutting interest rates is like easing the brakes on a
• 7:48
  Speaker 1: speeding car.
• 7:48
  Speaker 2: If you do it too early, momentum can build again
• 7:52
  Speaker 2: and you risk another inflation blowout. Yeah.
• 7:53
  Speaker 1: Central banks around the world, including the RBA, learned this
• 7:56
  Speaker 1: the hard way in the nineteen seventies.
• 7:58
  Speaker 2: Inflation in Australia peaked eighteen percent in nineteen seventy five
• 8:02
  Speaker 2: and then dropped down to just eight percent in nineteen
• 8:06
  Speaker 2: seventy nine, but.
• 8:06
  Speaker 1: Then it's spiked again in the early nineteen eighties when
• 8:09
  Speaker 1: interest rates were cut prematurely.
• 8:11
  Speaker 2: This damages both the economy and credibility of the central bank.
• 8:13
  Speaker 2: So Juzy Boy, cutting rates while inflation is still shticky
• 8:17
  Speaker 2: could under years of work building up their rep and
• 8:19
  Speaker 2: also slowing down inflation.
• 8:21
  Speaker 1: For our third and final story, Lego is buying back
• 8:24
  Speaker 1: its own funhouses in a two hundred million pound cash
• 8:28
  Speaker 1: deal to gain more control over its customer experience.
• 8:31
  Speaker 2: Sharing was never in Lego's playbook. Juzy Boy, be honest,
• 8:34
  Speaker 2: so tell me what's going on here?
• 8:35
  Speaker 1: So Lego's the Danish toy company that was founded in
• 8:37
  Speaker 1: nineteen thirty two and pretty darn famous for its colorful
• 8:40
  Speaker 1: interlocking bricks.
• 8:41
  Speaker 2: But Juzy Boy, Lego ain't just interlocking bricks, as we
• 8:45
  Speaker 2: like to call them. They've also developed a Lego movie
• 8:48
  Speaker 2: and Lego lands.
• 8:49
  Speaker 1: Yep. The very first Lego Land Discovery center opened in
• 8:51
  Speaker 1: Berlin in two thousand and seven, and now there are
• 8:53
  Speaker 1: more than twenty nine around the world.
• 8:55
  Speaker 2: And what are these Lego Land Discovery centers I've been
• 8:58
  Speaker 2: hearing about.
• 8:58
  Speaker 1: They're all play zones, tayment activities, retail shops, basically everything
• 9:02
  Speaker 1: focused around Lego.
• 9:03
  Speaker 2: I like to think that they're basically kids casinos without
• 9:06
  Speaker 2: the pogies.
• 9:07
  Speaker 1: Yeah, and they get them foot traffic as well. Be man,
• 9:09
  Speaker 1: we're talking five million visitors per year, all these kids
• 9:12
  Speaker 1: one sugar high away from a meltdown.
• 9:14
  Speaker 2: Until now, Merlin Entertainments owned these centers. But now Lego
• 9:18
  Speaker 2: will acquire twenty nine Lego Land Discovery centers in a
• 9:21
  Speaker 2: deal worth two hundred million pounds, and Lego reckons this
• 9:25
  Speaker 2: move will give them more direct control over customer experiences
• 9:29
  Speaker 2: that are linked to its brand.
• 9:31
  Speaker 1: So what is the key learning here?
• 9:32
  Speaker 2: When a brand becomes a cultural icon, controlling the customer
• 9:35
  Speaker 2: experience becomes just as important as selling the product.
• 9:39
  Speaker 1: Now that Lego directly owns and manages its discovery centers,
• 9:42
  Speaker 1: they can unlock some major benefits.
• 9:44
  Speaker 2: More control over brand consistency.
• 9:46
  Speaker 1: Better access to customer data.
• 9:47
  Speaker 2: And potentially higher margins because there's no middleman taking a
• 9:50
  Speaker 2: cart and a man.
• 9:51
  Speaker 1: That's a bit of a contrast to Disney, whose outsourced
• 9:53
  Speaker 1: parts of its own empire.
• 9:55
  Speaker 2: Yep Tokyo, Disneyland and Disney c for example, is owned
• 9:59
  Speaker 2: and run by the Oriental Land Company under a license.
• 10:02
  Speaker 1: But Lego clearly believes that the hands on, immersive experiences
• 10:05
  Speaker 1: of its discovery centers are too important to leave in
• 10:08
  Speaker 1: someone else's hands. Flux, ma'am. If you get to the
• 10:10
  Speaker 1: end of the month with a big fed zero or
• 10:12
  Speaker 1: close to zero in your ban account and wondering where
• 10:14
  Speaker 1: it goes, there is a thirty second solution that will
• 10:17
  Speaker 1: help you identify where it all goes. It's the Flux
• 10:19
  Speaker 1: budging tool. It categorizes your expenses and also tells you
• 10:22
  Speaker 1: where your savings comes from. So if you want to
• 10:24
  Speaker 1: learn more about how to budget how to save. Make
• 10:26
  Speaker 1: sure to download the Flux app and check out the
• 10:27
  Speaker 1: budgeting tool.
• 10:28
  Speaker 2: Thanks for listening, and we'll see you on Monday.