Latest / What the Flux / Medibank misses its target | 7-Eleven's $40b takeover | Breville brews record sales

Transcript

Medibank misses its target | 7-Eleven's $40b takeover | Breville brews record sales · What the Flux

• 0:05
  Speaker 1: This is what them flights.
• 0:06
  Speaker 2: I'm Brett and Justin and it's Friday, the twenty third
• 0:09
  Speaker 2: of August.
• 0:10
  Speaker 1: Dozzy boy, we are facing a tale of two siblings.
• 0:13
  Speaker 1: On the one hand, Quantus recorded its best on time
• 0:15
  Speaker 1: performance in three years. That was in July. We're talking
• 0:18
  Speaker 1: more than seventy four percent of flights departed on time.
• 0:21
  Speaker 1: On the other hand, it's cheaper sibling, Jetstar, only saw
• 0:24
  Speaker 1: sixty five percent of its flight slave on time and
• 0:26
  Speaker 1: nearly four percent of flights were canceled.
• 0:29
  Speaker 2: Not the best rep for Jetstar at the moment. Man
• 0:31
  Speaker 2: new aw Flex Mam. If you knew that Combank reported
• 0:34
  Speaker 2: a nine point eight billion dollar and your cash profit
• 0:36
  Speaker 2: last week, then you would have been on your way
• 0:38
  Speaker 2: to winning fifty bucks in our weekly quiz Quick Sticks.
• 0:41
  Speaker 2: And if you want to be in a chance to
• 0:42
  Speaker 2: win fifty bucks this week, all you've got to do
• 0:44
  Speaker 2: is download the Flux app and have your notifications turned
• 0:46
  Speaker 2: on the chance to be the first to win the
• 0:48
  Speaker 2: quick six this week. Three rapid fire stories today, Juzzy boy,
• 0:52
  Speaker 2: let's do it for our first. Medibank has seen its
• 0:54
  Speaker 2: share price fall after missing It's a big fat target
• 0:57
  Speaker 2: for member growth. Never good to set a target and
• 1:00
  Speaker 2: missed that one, b man, So tell me more.
• 1:02
  Speaker 1: All right, Well, Medibank was founded all the way back
• 1:05
  Speaker 1: in nineteen seventy six, when.
• 1:07
  Speaker 2: More more more it was in the airways.
• 1:09
  Speaker 1: It was actually created by the Australian government as a
• 1:12
  Speaker 1: not for profit private health insurer.
• 1:14
  Speaker 2: And after turning into a for profit entity in two
• 1:17
  Speaker 2: thousand and nine, it listed on the ASX in twenty fourteen.
• 1:20
  Speaker 1: Now, Donzie boy, twenty twenty two was a year to
• 1:22
  Speaker 1: forget for Medibank.
• 1:23
  Speaker 2: Who could forget the cyber hack that compromised the data
• 1:26
  Speaker 2: of nine point eight million of.
• 1:28
  Speaker 1: Its customers, And last year Medibank vowed to recover from
• 1:31
  Speaker 1: this debarcle by growing its resident policy growth by one
• 1:35
  Speaker 1: point two to one point five percent.
• 1:37
  Speaker 2: But b man, here's the problem. Medibanks now come out
• 1:39
  Speaker 2: and they've said their net resident policy holder growth was
• 1:42
  Speaker 2: just zero point seven percent. But the good news is
• 1:45
  Speaker 2: it's non resident policy growth jumped more than twenty five percent.
• 1:48
  Speaker 1: Did you say non resident policy growth.
• 1:50
  Speaker 2: I did. That's because more foreign students took up its
• 1:53
  Speaker 2: private health cover.
• 1:54
  Speaker 1: Fascinating stuff, does it? Way? So what is the key
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  Speaker 1: learning here?
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  Speaker 2: Not all policy holders are valued the same way for
• 1:59
  Speaker 2: private health insurers.
• 2:00
  Speaker 1: Many private health insurers in Australia distinguished between resident policy
• 2:04
  Speaker 1: holders and non resident policy holders in their reports, and.
• 2:07
  Speaker 2: This is because these groups generate different levels of revenue
• 2:11
  Speaker 2: and stability for the companies.
• 2:12
  Speaker 1: Now, resident policy holders are considered to be a more
• 2:15
  Speaker 1: stable and sustainable customer base.
• 2:17
  Speaker 2: For example, they're more likely to stay with the insurer
• 2:19
  Speaker 2: for longer periods and provide steady revenue over time.
• 2:22
  Speaker 1: In fact, Jasiboyite Medibank Private has a retention rate of
• 2:25
  Speaker 1: around seventy five percent of their policy holders a year
• 2:28
  Speaker 1: one year, but.
• 2:28
  Speaker 2: Non resident policy holders, like international students or temporary workers,
• 2:32
  Speaker 2: they generally only hold policies for short periods.
• 2:35
  Speaker 1: Of time, meaning they're less reliable for long term growth
• 2:38
  Speaker 1: due to their visa situation. So while non resident policy
• 2:40
  Speaker 1: holders growth of twenty five percent is good, investors are
• 2:43
  Speaker 1: more focused on sustainability provided by resident policy holders, which
• 2:47
  Speaker 1: is crucial for Medibank's long term success.
• 2:50
  Speaker 2: For our second story, the owner of the seven to
• 2:52
  Speaker 2: eleven chain globally has been approached in a forty billion
• 2:55
  Speaker 2: US dollar takeover from a Canadian convenience store.
• 2:59
  Speaker 1: Just when you thought grab a slurpy was the best
• 3:01
  Speaker 1: thing to happen at seven to eleven. Here comes a
• 3:03
  Speaker 1: forty billion dollar takeover bid. Juzzy Boy, tell me what's
• 3:05
  Speaker 1: going on here?
• 3:06
  Speaker 2: Okay? So seven eleven is a pretty iconic business. It
• 3:08
  Speaker 2: was first set up in Dallas, Texas, back in nineteen
• 3:11
  Speaker 2: twenty eight, and back then he was called Totem Stores.
• 3:13
  Speaker 1: But by nineteen forty six, the convenience store was open
• 3:16
  Speaker 1: seven days per week from seven am to eleven pm.
• 3:20
  Speaker 1: Where is this going, Juzzy boy.
• 3:21
  Speaker 2: Hence the new name seven eleven.
• 3:23
  Speaker 1: Now fast forward a few decades and the Japanese conglomerate
• 3:26
  Speaker 1: named seven and I Holdings. They gobbled up seven eleven
• 3:29
  Speaker 1: in the US and spread its convenience store empire across
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  Speaker 1: fifteen countries.
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  Speaker 2: Including Australia, which seven and I acquired seven eleven stores
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  Speaker 2: for one point seven billion dollars last year.
• 3:38
  Speaker 1: Now get this one, Josey Boy. In total, this company
• 3:41
  Speaker 1: operates and franchises nearly eighty five thousand stores across nineteen countries.
• 3:45
  Speaker 2: But now be Man, a Canadian convenience store giant with
• 3:48
  Speaker 2: a name that is a serious tongue twister, has made
• 3:50
  Speaker 2: a take of a bid for seven and I. Their
• 3:53
  Speaker 2: name is Alimentation Cuchet Hard the owners of convenience stores
• 3:57
  Speaker 2: Circle K, which is a little bit easier pronounce. And
• 4:00
  Speaker 2: then Man. If this takeover goes ahead, it would be
• 4:02
  Speaker 2: the biggest ever foreign buyout of a Japanese company.
• 4:05
  Speaker 1: And it would be a major test for Japan's brands
• 4:08
  Speaker 1: banking new takeover rules yep, So what is the key
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  Speaker 1: learning here? One small step for seven to eleven, one
• 4:14
  Speaker 1: giant leap for Japanese takeovers.
• 4:16
  Speaker 2: You see the man. In the past, Japanese companies were
• 4:19
  Speaker 2: known for prioritizing stability of a company over maximizing shareholder value.
• 4:23
  Speaker 2: This meant that management teams could swat away takeover bids
• 4:26
  Speaker 2: like in irritating Mosquito in your left ear, without ever
• 4:30
  Speaker 2: going to the board or their shareholders does wait.
• 4:33
  Speaker 1: Last year, the Japanese government rewrote its guidelines for foreign
• 4:36
  Speaker 1: takeover proposal.
• 4:37
  Speaker 2: With the hope that it could improve the chance of
• 4:39
  Speaker 2: deals going through and stimulating their economy.
• 4:42
  Speaker 1: And as a result of these new guidelines, it's harder
• 4:44
  Speaker 1: for Japanese companies to ignore takeover offers without at least
• 4:47
  Speaker 1: considering the benefit to shareholders. For our third and final story, Brevel,
• 4:52
  Speaker 1: the home appliances company, has brewed up record high sales
• 4:56
  Speaker 1: and it's got its coffee machines to say thank you for.
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  Speaker 2: It would not have ex did Brevel to be the
• 5:00
  Speaker 2: high flyer in's economy. B Man, So what is going
• 5:02
  Speaker 2: on here?
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  Speaker 1: Well, Brevel Juzzy Boy is the Aussie company that's been
• 5:06
  Speaker 1: around since nineteen thirty two, almost a century.
• 5:08
  Speaker 2: We're talking manufacturing a bunch of kitchen items like toasters, kettles, grills,
• 5:13
  Speaker 2: and of course the coffee machine.
• 5:14
  Speaker 1: Now Brevell has announced record sales of one point five
• 5:17
  Speaker 1: to three billion dollars.
• 5:19
  Speaker 2: And a seven and a half percent jump in its
• 5:20
  Speaker 2: net profit.
• 5:21
  Speaker 1: Now, this juicy news sent Brevel's share price up over
• 5:24
  Speaker 1: eight percent.
• 5:24
  Speaker 2: If you don't mind and be man, the hero behind
• 5:27
  Speaker 2: this caffeinated success story, Well, that'd have to be Brevel's
• 5:30
  Speaker 2: coffee machines, which hit double digit revenue growth, particularly.
• 5:33
  Speaker 1: In the US YEP. And this one was off the
• 5:35
  Speaker 1: back of Brevel acquiring Italian coffee machine supplier Lelite in
• 5:39
  Speaker 1: twenty twenty two and.
• 5:40
  Speaker 2: Introducing its premium coffee machines into US target.
• 5:44
  Speaker 1: Looks like America's finally waking up and smelling the espresso.
• 5:48
  Speaker 2: So what is the key learning here?
• 5:49
  Speaker 1: Premiumization is when a large chunk of a market moves
• 5:52
  Speaker 1: towards more expensive premium versions of a product.
• 5:55
  Speaker 2: You see a man. As a market matures, consumers become
• 5:58
  Speaker 2: more knowledgeable and familiar with the product and its intimate features,
• 6:02
  Speaker 2: and they start to demand more features or higher quality
• 6:05
  Speaker 2: or both aka higher end versions of the product.
• 6:08
  Speaker 1: Now, an amateur coffee enthusiast would probably up for a
• 6:11
  Speaker 1: simple machine like a Mocker pot or a pod machine.
• 6:14
  Speaker 2: Don't forget trust the old Nest Cafe Blend forty.
• 6:16
  Speaker 1: Three, absolutely, Johnzy Boy, I'd be happy with Nest Cafe
• 6:19
  Speaker 1: Blend forty two at this rate.
• 6:20
  Speaker 2: But as they evolve into coffee pros, consumers are starting
• 6:23
  Speaker 2: and more keen to invest in more premium machine.
• 6:26
  Speaker 1: Which is where Brevel is capitalizing, especially in the US.
• 6:29
  Speaker 1: In fact, the US coffee machine industry is expected to
• 6:32
  Speaker 1: reach three point seven billion bucks by the end of
• 6:34
  Speaker 1: this year.
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  Speaker 2: Which will be the largest in the world and grow
• 6:37
  Speaker 2: at two point three five percent until twenty twenty eight.
• 6:40
  Speaker 2: Cop out Starbucks, what's sam If you want to check
• 6:42
  Speaker 2: up the weekend on a high with fifty bucks in
• 6:44
  Speaker 2: your front left pocket? There is only one simple way.
• 6:47
  Speaker 2: It's being the fastest and the smartest in our weekly
• 6:49
  Speaker 2: quiz Quick Sticks, so they sure to download the Flux
• 6:51
  Speaker 2: app and have your notifications turned on.
• 6:53
  Speaker 1: Thanks for listening and we'll see you on Monday.