Latest / What the Flux / Myer's 40% profit plummet | Google's biggest acquisition yet | KFC's new AI zinger

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Myer's 40% profit plummet | Google's biggest acquisition yet | KFC's new AI zinger · What the Flux

• 0:05
  Speaker 1: This is what the flux I'm brand and Justin and
• 0:08
  Speaker 1: a Friday the twenty first of March. It's been a.
• 0:10
  Speaker 2: Good year for airlines, Juzzy boy, but even better for airports.
• 0:13
  Speaker 2: Get this one. Sydney, Melbourne, Brisbane and Perth Airports made
• 0:16
  Speaker 2: a combined one billion dollars in operating profit last financial year.
• 0:20
  Speaker 2: That one is up seventy five percent on the year before.
• 0:24
  Speaker 1: Gold plated drinking fountains. Something can be man, I hope,
• 0:26
  Speaker 1: So fox am fifty bucks in your pocket? You know
• 0:29
  Speaker 1: the drill. It's our weekly quiz quick Sticks where you
• 0:31
  Speaker 1: can win fifty bucks just by answering three business or
• 0:33
  Speaker 1: finance questions correctly. To make sure to download the app
• 0:36
  Speaker 1: turn your notifications on if you want to whip that money.
• 0:39
  Speaker 2: Three truly enlightening stories today, Judsey Boy for our first.
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  Speaker 2: Maya has seen its net profit tank by forty percent
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  Speaker 2: in its most recent half as the new CEO focuses
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  Speaker 2: on resetting the business.
• 0:52
  Speaker 1: The easiest way to justify poor results be man, We'll
• 0:54
  Speaker 1: go through a football style rebuild. So what is the
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  Speaker 1: story here?
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  Speaker 2: Okay? So, Maya has been a mainstay in this strain
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  Speaker 2: in fashion and retail market ever since its first door
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  Speaker 2: opened in nineteen hundred. There's the Mya Ambassadors, the Meya
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  Speaker 2: Christmas windows, and of course the my clothing yep. But
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  Speaker 2: somewhere along the way, Maya's brand and business fell by
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  Speaker 2: the wayside.
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  Speaker 1: In fact, the Man in early twenty twenty, MEA's market
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  Speaker 1: cap had fallen from a high of two point two
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  Speaker 1: billion dollars when it first listed, and.
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  Speaker 2: Had fallen all the way down to two hundred and
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  Speaker 2: thirty seven mil in December twenty twenty.
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  Speaker 1: But the Man Maya hired and U CEO back in
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  Speaker 1: June twenty twenty four, and she's been planning a big,
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  Speaker 1: big turnaround.
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  Speaker 2: Unfortunately for Maya, though these things might take a bit
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  Speaker 2: of time.
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  Speaker 1: Yeah My warned that its net profit was down by
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  Speaker 1: nearly forty percent in the most recent half.
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  Speaker 2: But it's even worse than that because when you take
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  Speaker 2: out the accounting compairments, the profit was down one hundred
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  Speaker 2: and ninety five percent.
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  Speaker 1: All good, though, investors don't worry about these results because
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  Speaker 1: we're part of a reset period.
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  Speaker 2: The fact is, juzyboy, the investors do, in fact care
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  Speaker 2: because Maya's share price dropped by more than five percent.
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  Speaker 1: The good news though by Man, the Maya one loyalty
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  Speaker 1: program is supposedly firing, So what's the key learning Hereally,
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  Speaker 1: programs are powerful tools for driving repeat business, but they
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  Speaker 1: aren't exactly a silver bullet now, Jazzy Boy.
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  Speaker 2: At face value, Maya's loyalty program looks strong. Seventy nine
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  Speaker 2: percent of sales now come from its Maya one members,
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  Speaker 2: of which.
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  Speaker 1: There are four point six million members across Australia.
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  Speaker 2: Sounds pretty down good. But there is a butt coming,
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  Speaker 2: isn't there?
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  Speaker 1: But Meyers generating most of their revenue from loyal customers
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  Speaker 1: and still seeing flat sales and declining profits.
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  Speaker 2: So Jazzi Boy, Meyer's problem isn't loyalty, it's member spending.
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  Speaker 1: In other words, being Man, Meyer's members are sticking around,
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  Speaker 1: but they aren't spending enough.
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  Speaker 2: And this is a major red flag because it looks
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  Speaker 2: like the loyalty program is kind of working.
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  Speaker 1: But it's not actually driving a jumping transaction value or
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  Speaker 1: purchase frequency. It's actually needed to boost their profits.
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  Speaker 2: And investors clearly voting with their feet because Meyer's share
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  Speaker 2: price is down forty one percent since January. Just this year.
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  Speaker 1: Hikes for our second story, Google has announced its largest
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  Speaker 1: acquisition in history, acquiring cybersecurity startup Whiz for thirty two
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  Speaker 1: billion year U s dollars.
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  Speaker 2: Holy smoker, ronis not bad for a four year old company,
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  Speaker 2: Jazzy boy, What is going on here?
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  Speaker 1: Okay? So, Whizz was founded back in twenty twenty and
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  Speaker 1: he's one of the fastest growing startups of all time.
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  Speaker 2: Is an Israeli company that's New York based and sells
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  Speaker 2: security tools that protect information stored in data centers.
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  Speaker 1: And we know the data centers are the second hottest
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  Speaker 1: word right now behind AI.
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  Speaker 2: So juz wait. Google has now announced its acquisition of
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  Speaker 2: Whiz for thirty two billion US dollars.
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  Speaker 1: And this is Google's largest acquisition by a country mile.
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  Speaker 2: The next biggest is Motoroller Mobility in twenty eleven for
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  Speaker 2: twelve and a half billion US dollars, which it no
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  Speaker 2: longer owns the man. Wiz currently works with others like
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  Speaker 2: Amazon and Microsoft in the cloud market too, but it's
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  Speaker 2: possible that Google will make the tech exclusive for Google
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  Speaker 2: customers in the future. And interestingly, this isn't Google's first
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  Speaker 2: interaction with Wiz.
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  Speaker 1: Nope. Last year, Google tried to acquire Wiz for twenty
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  Speaker 1: three billion US dollars, but they rejected the offer.
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  Speaker 2: So now Google's having a second bite of their cherry
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  Speaker 2: and this time it's been successful, but paying forty percent
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  Speaker 2: more than its original offer and thirty times Whizz's four
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  Speaker 2: future revenue.
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  Speaker 1: So what is the key leny here?
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  Speaker 2: When big companies by smaller ones, they often assess value
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  Speaker 2: using a multiple of revenue or a multiple of earnings.
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  Speaker 1: For example, when Microsoft acquired LinkedIn, it was for eight
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  Speaker 1: point seven times their revenue.
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  Speaker 2: And into it acquired Mailchimp for about a fifteen times
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  Speaker 2: multiple on their revenue.
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  Speaker 1: But in this case, the man alphabet is paying thirty
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  Speaker 1: times Whiz is forecast at future revenue of one billion dollars,
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  Speaker 1: or roughly sixty times their existing revenue.
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  Speaker 2: Because Whiz is growing like wildfire.
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  Speaker 1: Yep, It's one of the fastest growing startups of all
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  Speaker 1: time according to the Wall Street Journal.
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  Speaker 2: Top of that, cybersecurity tools are in very high demand
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  Speaker 2: right now.
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  Speaker 1: So be man. Sometimes buyers will pay a premium when
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  Speaker 1: they say strategic value.
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  Speaker 2: Like Google securing a partner that also works with its
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  Speaker 2: two biggest cloud rivals.
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  Speaker 1: Remember when Meta acquired WhatsApp for nineteen billion US dollars
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  Speaker 1: in twenty fourteen.
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  Speaker 2: Yep. At the time, WhatsApp was believed to be earning
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  Speaker 2: about thirty million bucks in annual revenue.
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  Speaker 1: It was a huge risk, but eventually a huge payoff,
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  Speaker 1: because WhatsApp generated one point three billion revenue in twenty
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  Speaker 1: twenty three.
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  Speaker 2: Google's hoping Whiz will follow.
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  Speaker 1: A similar part For our third and final story, KFC
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  Speaker 1: and Pizza Hut's parent company, Young Brands is teaming up
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  Speaker 1: with Nvidia to implement AI ordering in the drive through lanes.
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  Speaker 2: Ordering fast food is about to get even faster. Juzzy boy,
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  Speaker 2: tell me more.
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  Speaker 1: Okay, So, Young Brands is one of the largest fast
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  Speaker 1: food companies in the world. We have sixty one thousand
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  Speaker 1: stores in over one hundred and fifty countries.
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  Speaker 2: That's a whole lot of frieda, chicken and pizza. Yep.
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  Speaker 1: And now be Man. Young Brands is teaming up with
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  Speaker 1: Nvidia to all that it's fancy AI in drive through.
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  Speaker 2: This was not on anyone's Bingo card, to be honest,
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  Speaker 2: but we're all here for it.
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  Speaker 1: Basically, be Man. The focus will be on order taking,
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  Speaker 1: but rather than a high pitched sixteen year old taking
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  Speaker 1: your order, it will be an AI bot taking your food.
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  Speaker 2: They'll also be using AI to count the number of
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  Speaker 2: cars in the drive through, and that will help employees.
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  Speaker 1: Manage the queue more efficiently.
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  Speaker 2: But AI won't be taking over Australian drive throughs just yet.
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  Speaker 2: They've only begun piloting this new tech in some US restaurants.
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  Speaker 1: So what is the key learning here?
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  Speaker 2: AI and technology are the hottest new recipes on the
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  Speaker 2: hospital retality menu. We know that the restaurant industry has
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  Speaker 2: super tight profit margins. For example, the net profit margin
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  Speaker 2: for a casual dining restaurant generally sits around five to
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  Speaker 2: seven percent when things are good.
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  Speaker 1: And fast food chains do a little bit better, with
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  Speaker 1: their profit margins sitting between six and ten percent roughly.
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  Speaker 2: So it makes sense that the hospitality industry is always
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  Speaker 2: on the lookout for ways to optimize their services and
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  Speaker 2: cut costs where they can. The pandemic supercharge the use
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  Speaker 2: of QR codes in restaurants.
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  Speaker 1: Now b man AIS entered the chat and it will
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  Speaker 1: be interesting to see how restaurant profit margins will change
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  Speaker 1: by automating all the really repetitive tasks and potentially removing
• 6:33
  Speaker 1: some of the staff costs flux ammy. If you want
• 6:35
  Speaker 1: to keep up the weekend with fifty bucks to spend
• 6:38
  Speaker 1: on yourself, maybe on your partner, or on your friends.
• 6:40
  Speaker 1: There is only one place to win it. It's in
• 6:42
  Speaker 1: the Flux app. Every Friday, at a random time, we'll
• 6:44
  Speaker 1: send a notification. If you're the first person to answer
• 6:46
  Speaker 1: that three business or finance questions correctly, you'll win the
• 6:48
  Speaker 1: fifty bucks to make sure to download the Flex app
• 6:50
  Speaker 1: and check it out.
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  Speaker 2: Thanks for listening and we'll see you on Monday.