Latest / What the Flux / Qantas' plan to keep away from Virgin | Chemist Warehouse's healthy dose of profit | Wisetech's wipeout

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Qantas' plan to keep away from Virgin | Chemist Warehouse's healthy dose of profit | Wisetech's wipeout · What the Flux

• 0:05
  Speaker 1: This is what the Flux.
• 0:06
  Speaker 2: I'm Brett and I'm justin and it's Friday. At twenty
• 0:08
  Speaker 2: seventh of February, Juzzy.
• 0:10
  Speaker 1: Boy Domain has run a new first home buyer report
• 0:12
  Speaker 1: tracking the growth on the lower end of the market
• 0:15
  Speaker 1: over the past five years, and it aimed pretty oh no,
• 0:17
  Speaker 1: get this one. The price of houses at the lower
• 0:19
  Speaker 1: end of the market has grown nationally from four hundred
• 0:21
  Speaker 1: and eight thousand dollars to six hundred and eighty five
• 0:24
  Speaker 1: thousand dollars between twenty twenty five.
• 0:26
  Speaker 2: Huge.
• 0:27
  Speaker 1: That is sixty eight percent growth, which means it is
• 0:29
  Speaker 1: completely outpaced wages, which have only grown by about twenty
• 0:32
  Speaker 1: two percent in that time.
• 0:34
  Speaker 2: Not what you want to hear as a first home
• 0:35
  Speaker 2: biaby Man New Fox Am. We've got into the end
• 0:37
  Speaker 2: of the month and this is the perfect time to
• 0:39
  Speaker 2: be checking your credit score for what's changed in the
• 0:41
  Speaker 2: month of February.
• 0:42
  Speaker 1: Has your credit score gone up?
• 0:43
  Speaker 2: Has it gone down? Are you seeing what the banks
• 0:45
  Speaker 2: are seeing about you? So if you want to learn more,
• 0:47
  Speaker 2: make sure to download the Flux app and check out
• 0:49
  Speaker 2: the changes in your credit score this month.
• 0:51
  Speaker 1: Three quality stories today, Jusy Boy, let's do it for
• 0:54
  Speaker 1: our first Quantus has half year underlying profits hit one
• 0:57
  Speaker 1: and a half billion bucks as it plans to shake
• 0:59
  Speaker 1: up frequent fire program to keep those customers loyal.
• 1:03
  Speaker 2: The word starting with V and ending with urgent shall
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  Speaker 2: not be spoken about this story. The man, so tell
• 1:08
  Speaker 2: me more so.
• 1:09
  Speaker 1: Quantus aka the Big Red Oru was founded in nineteen
• 1:12
  Speaker 1: twenty and is Australia's largest airline group across qwenty and
• 1:15
  Speaker 1: the jet Star brand.
• 1:16
  Speaker 2: Between these two brands, it has two thirds market share
• 1:19
  Speaker 2: in the Australian domestic market and now.
• 1:21
  Speaker 1: Quantus announced an underlying profit rise of seventy one million
• 1:25
  Speaker 1: bucks two one point four to six billion, But ay Man,
• 1:27
  Speaker 1: the big winner was Quey's loyalty division, which jumped twelve
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  Speaker 1: percent to two hundred and eighty six million bucks for
• 1:33
  Speaker 1: the heart and at the same time, Quantus reveal changes
• 1:35
  Speaker 1: to its frequent fire program that'll get those points fienes
• 1:38
  Speaker 1: listening in YEP. The changes will make it easier for
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  Speaker 1: passengers to earn status credits without flying.
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  Speaker 2: But it will increase the points needed to retain the
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  Speaker 2: higher tiers of status credit. And clearly this is a
• 1:48
  Speaker 2: play getting passengers to stick with the Big Q and
• 1:51
  Speaker 2: don't even consider the big V. So what is the
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  Speaker 2: key learning here.
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  Speaker 1: Well, many people see airline loyalty programs as a nice bonus.
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  Speaker 1: They're often one of the most profitable parts of the
• 2:01
  Speaker 1: airline business. In fact, be Man Quantus currently has more
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  Speaker 1: than eighteen million members of its Frequent Flyer program, and
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  Speaker 1: that means the ability to generate non core revenue from
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  Speaker 1: eighteen million members as well as banks.
• 2:11
  Speaker 2: Yeah, we know that airlines sell points in bulk to
• 2:14
  Speaker 2: banks and credit card providers. So when you the customer
• 2:17
  Speaker 2: earn points on your everyday spending, the bank has already
• 2:19
  Speaker 2: paid Quantas for those points up front. Yeah. For Quantas,
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  Speaker 2: that means they receive immediate revenue and strong cash flow.
• 2:25
  Speaker 1: And in even better news for Quantus, not every point
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  Speaker 1: gets redeemed, and.
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  Speaker 2: When they are redeemed, airlines often fill seats that might
• 2:31
  Speaker 2: otherwise have flown empty. So the marginal cost of honoring
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  Speaker 2: those points can be relatively low compared to the revenue
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  Speaker 2: generated when the points are sold. And b Man Quantus
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  Speaker 2: expects its loyalty divisions EBIT to rise to between eight
• 2:42
  Speaker 2: hundred million and one billion dollars by twenty thirty. Not
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  Speaker 2: bad at all, and that is why quantus loyalty is
• 2:48
  Speaker 2: viewed by investors as a core profit pillar and not
• 2:51
  Speaker 2: just a marketing adder.
• 2:52
  Speaker 1: For our second story. Chemist Warehouses parent Sigma has posted
• 2:56
  Speaker 1: an eighteen point seven percent jump in earnings and clearly
• 3:00
  Speaker 1: it hasn't taken its foot off the pedal since going public.
• 3:02
  Speaker 2: Nothing like a few billion cold flu tablets to calm
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  Speaker 2: the market's nerves, be.
• 3:05
  Speaker 1: Man, so tell me more so. Sigma is the company
• 3:08
  Speaker 1: behind Amcal, Guardian and whole shelf of other farmer brands.
• 3:12
  Speaker 2: Yep. They also have a pretty significant wholesale and distribution business.
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  Speaker 1: Basically the warehouse that keeps Australian stocked with vitamins and
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  Speaker 1: ventilin and everything in between.
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  Speaker 2: And last year b Man Sigma merged with Chemists Warehouse
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  Speaker 2: in an eight point eight billion dollar backdoor listing.
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  Speaker 1: And when merged, they created a thirty four and a
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  Speaker 1: half billion dollar ASX listed farmer powerhouse.
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  Speaker 2: Yeah, and while it's called Sigma on the AX, this
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  Speaker 2: company runs on chemist Warehouse.
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  Speaker 1: Energy, yeap, bright yellow bags, jingles and all.
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  Speaker 2: And in its first half year results one year after
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  Speaker 2: the merger, Sigma's earnings jumped eighteen point seven percent to
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  Speaker 2: nearly five hundred and eighty.
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  Speaker 1: Two mil, and revenue was also up almost fifteen percent
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  Speaker 1: to five and a half bill.
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  Speaker 2: International sales rose nearly twenty five percent to over eight
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  Speaker 2: hundred million two, although management admitted profitability overseas is not
• 3:59
  Speaker 2: the focus just yet. Even so b Man, there are
• 4:01
  Speaker 2: enough wins on the board for Sigma' share price to
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  Speaker 2: jump seven percent on this update.
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  Speaker 1: So what's the key learning here?
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  Speaker 2: Investors are often willing to be patient with overseas expansion,
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  Speaker 2: but only if the core business is humming.
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  Speaker 1: In Sigma's case, the domestic engine is firing.
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  Speaker 2: Yeah, Australian sales are up strongly, same store sales are
• 4:17
  Speaker 2: growing and earnings are rising.
• 4:18
  Speaker 1: So when they say international profitability is not the focus yet,
• 4:21
  Speaker 1: the market is more relaxed.
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  Speaker 2: Yeah. Right now. The overseas business makes up around thirteen
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  Speaker 2: percent of turnover. If it works great, if it takes time,
• 4:28
  Speaker 2: the core business is still delivering now. Contrasts out with Goodsmitigoms,
• 4:31
  Speaker 2: which we spoke about earlier. This way, when Goig expands
• 4:34
  Speaker 2: it into the US, it positioned America as central to
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  Speaker 2: its growth story. Wasn't a side project.
• 4:39
  Speaker 1: It was a hole down burrito yep. And that's why
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  Speaker 1: GOIG shares are down more than forty five percent over
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  Speaker 1: the last twelve months. So b Man, Clearly, the markets
• 4:46
  Speaker 1: are far more forgiving when growth abroad is optional rather
• 4:49
  Speaker 1: than essential. For our third and final story, wise Tech
• 4:53
  Speaker 1: Global plans to slash two thousand jobs in an AI overhaul,
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  Speaker 1: and investors have cheered this move.
• 4:59
  Speaker 2: Wow is it? It's the first real AI jobs bombed
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  Speaker 2: hit the asex b Man, it just might be, so tell.
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  Speaker 1: Me more so. Wyse Tech Global is the Australian logistics
• 5:07
  Speaker 1: software giant that helps manage freight, customs and global supply chains.
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  Speaker 1: All that sexy stuff, huh. And since it's founding in
• 5:13
  Speaker 1: nineteen ninety four, Wistech's platforms have been used across one
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  Speaker 1: hundred and ninety three countries now.
• 5:18
  Speaker 2: Over the past ten years, be man, wyse Tech has
• 5:20
  Speaker 2: made more than fifty five acquisitions to its core business
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  Speaker 2: and jus boy, that means a lot of bolt on
• 5:25
  Speaker 2: products and people. Yep. So now, wy Tech plans to
• 5:28
  Speaker 2: cut around two thousand jobs over the next eighteen months,
• 5:30
  Speaker 2: or around twenty nine percent of its global workforce.
• 5:33
  Speaker 1: And some teams including product development and customer service could
• 5:36
  Speaker 1: see headcount cut by up to fifty percent.
• 5:38
  Speaker 2: Wow. And b Man, the wyseex CEO, didn't sugarcoat it either.
• 5:41
  Speaker 2: He said that the era of manually writing code is over.
• 5:44
  Speaker 2: So despite a thirty six percent fall in their statutory profit,
• 5:48
  Speaker 2: their share price jump more than eleven percent. So what
• 5:51
  Speaker 2: is the key learning here?
• 5:52
  Speaker 1: AI is no longer a side project or innovation lab experiment.
• 5:55
  Speaker 1: It's becoming a cost cutting lever at scale.
• 5:58
  Speaker 2: For years, we saw companies talk AI boosting productivity without
• 6:02
  Speaker 2: much to show for a.
• 6:02
  Speaker 1: Pretty PowerPoint here and Excel spreadsheet over there with some
• 6:05
  Speaker 1: big numbers. But now we're actually starting to see what
• 6:08
  Speaker 1: that really means with some mass job cuts and Judy
• 6:11
  Speaker 1: Boyd just earlier this week, Combank announced three hundred job
• 6:14
  Speaker 1: cuts alongside their ninety million dollar program to create a
• 6:17
  Speaker 1: quote AI ready workforce. So while this may be concerning
• 6:20
  Speaker 1: for white collar workers investors of rewarding companies that move
• 6:23
  Speaker 1: early to reset their cost structure, but.
• 6:25
  Speaker 2: The real test will be whether these financial gains actually
• 6:28
  Speaker 2: translate into long term profit growth. Blucksamm. Today is the
• 6:31
  Speaker 2: second last day of the month of February, meaning it's
• 6:33
  Speaker 2: second last day to check your credit score for this month.
• 6:36
  Speaker 2: You had to go up, did to go down? And
• 6:37
  Speaker 2: what has changed each month? If you want to see
• 6:39
  Speaker 2: what the bank's se about you and make sure to
• 6:40
  Speaker 2: download the blocks app and check out your credit score.
• 6:42
  Speaker 1: Thanks for listening, and we'll see you on Monday.