Latest / What the Flux / NAB braces for bad debts | Mecca's in-store surge | Apple CEO Tim Cook steps down

Transcript

NAB braces for bad debts | Mecca's in-store surge | Apple CEO Tim Cook steps down · 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 Wednesday, the twenty
• 0:08
  Speaker 2: second of April.
• 0:09
  Speaker 1: We know that ozzies are tightening their purses because of
• 0:12
  Speaker 1: higher cost of living, but you may not know who
• 0:15
  Speaker 1: is benefiting Coals and Woolies. That's who. According to UBS,
• 0:19
  Speaker 1: higher food prices and a fall in the number of
• 0:21
  Speaker 1: people dining out are expected to pump up the bottom
• 0:24
  Speaker 1: line of Woolies and Coals to the tune of one
• 0:26
  Speaker 1: hundred and twenty five million bucks in profits in the
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  Speaker 1: next financial year.
• 0:29
  Speaker 2: It is absolutely wild. Speaking of cost of living the
• 0:32
  Speaker 2: man one of the best ways to save money every
• 0:34
  Speaker 2: single month is by cutting a number of subscriptions you've got,
• 0:37
  Speaker 2: And in the Flux app, we can help you identify
• 0:39
  Speaker 2: all of the subscriptions in the one place. Say that
• 0:41
  Speaker 2: lots of mueler every month, so that that cost of
• 0:43
  Speaker 2: living squeeze isn't feeling quite as tight. To make sure
• 0:45
  Speaker 2: you download the Flux app and check out the subscription tracker.
• 0:48
  Speaker 1: Three massive stories today, Dozy boy, let's do it for
• 0:51
  Speaker 1: our first. NABS share price has dropped more than three
• 0:54
  Speaker 1: percent as it prepares for a downturn in business customers.
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  Speaker 2: Oh not exactly the kind of flex that like to
• 1:00
  Speaker 2: show off, b man. So tell me all.
• 1:02
  Speaker 1: Now, NABB is Australia's second biggest bank by market cap
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  Speaker 1: but third by assets, and it's.
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  Speaker 2: The largest lender to businesses, particularly in sectors like agriculture
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  Speaker 2: and transport.
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  Speaker 1: But now, Josey boy, the tone for NAB is shifting. Yeah,
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  Speaker 1: NABS are warned of a pretty sharp increase in money
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  Speaker 1: they've set aside for bad debts. We're talking seven hundred
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  Speaker 1: and six million bucks in impairments, which is up from
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  Speaker 1: four hundred and eighty five mil last half.
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  Speaker 2: And just to really drive the point home, they're also
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  Speaker 2: allocating an extra three hundred million dollar buffer just in
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  Speaker 2: case things get worse.
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  Speaker 1: Right, Oh, why the sudden panic.
• 1:31
  Speaker 2: Well, NAB's expecting that some of its business customers will
• 1:33
  Speaker 2: actually struggle to repay their loans in the coming years.
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  Speaker 1: Especially those hit by rising fuel and energy costs.
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  Speaker 2: So it's preparing a whole lot of bad debt provisions
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  Speaker 2: to prepare ool.
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  Speaker 1: So what's the key learning here?
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  Speaker 2: Bad debt provisions are basically a bank's rainy day fun.
• 1:46
  Speaker 1: Instead of waiting for customer loans to go bad, banks
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  Speaker 1: estimate future losses based on economic conditions and borrower risk.
• 1:53
  Speaker 2: And then they set aside money ahead of time in anticipation.
• 1:56
  Speaker 2: It's a bit of a hope for the best, prepared
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  Speaker 2: for the worst scenario. And we know that NOW prides
• 2:00
  Speaker 2: itself on its business banking lending.
• 2:02
  Speaker 1: Yep, it's the leading bank in Australia with twenty one
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  Speaker 1: point seven percent market share of the business banking market.
• 2:07
  Speaker 2: But that means they're also exposed to the stability or
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  Speaker 2: instability of Australian businesses, more exposed than any other bank
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  Speaker 2: and be Man, according to NAB's March business survey, it
• 2:15
  Speaker 2: seems that business confidence has collapse.
• 2:17
  Speaker 1: In fact, business confidence suffered the largest monthly decline since
• 2:21
  Speaker 1: the start of the pandemic in March twenty two hour.
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  Speaker 2: So be Man it is no surprise then that NAB
• 2:26
  Speaker 2: had to put a bigger buffer on their bad debts.
• 2:28
  Speaker 1: When NAB is concerned, investors get concerned too. For our
• 2:32
  Speaker 1: second story, Mecca's revenues grew to one point four to
• 2:34
  Speaker 1: three billion dollars by the end of last year or
• 2:36
  Speaker 1: thanks to opening a string of new brick and mortar stores.
• 2:39
  Speaker 1: Mecha with another year of glowing up, Juzzy Boy, tell
• 2:41
  Speaker 1: me more so. Mecca's the Melbournborne beauty company founded back
• 2:44
  Speaker 1: in nineteen ninety seven and it is now the largest
• 2:47
  Speaker 1: and most dominant beauty retailer in Australia and New Zealand.
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  Speaker 1: Think lipsticks, blush kids, eyeshadows, bronzes, all of your favorites,
• 2:54
  Speaker 1: juzzy Boy, and Mecha has grown into a big, big beast.
• 2:57
  Speaker 1: We're talking more than seven thousand staff at over one
• 2:59
  Speaker 1: hundred and tenth in Australia and New Zealand. And now
• 3:01
  Speaker 1: Mecho has seen its revenue grow to one point four
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  Speaker 1: to three billion bucks for the twenty twenty five calendar year,
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  Speaker 1: which is.
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  Speaker 2: Up more than sixty mili from the year before.
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  Speaker 1: Just to put that in perspective, it makes twice the
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  Speaker 1: revenue from beauty as a department store Mayer.
• 3:13
  Speaker 2: That is large. And how did they manage this?
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  Speaker 1: Well, it's actually Mecca's in person stores.
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  Speaker 2: Oh yeah, They've opened a bunch of new stores with
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  Speaker 2: a whole range of experiences outside of just beauty, like
• 3:22
  Speaker 2: ear piercing and acupuncture. So it's making shopping at Mecha
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  Speaker 2: feel like more than just running errands and potentially a
• 3:29
  Speaker 2: very enjoyable experience.
• 3:31
  Speaker 1: So what is the key learning here? In the digital era?
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  Speaker 1: Stores that feel like an experience are the ones that
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  Speaker 1: are thriving.
• 3:37
  Speaker 2: In fact, be man, seventy one percent of consumers say
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  Speaker 2: experiencing a brand in a physical store actually strengthens their
• 3:42
  Speaker 2: brand connection and their brand loyalty.
• 3:44
  Speaker 1: And so far, so good. Mecha launched its flagship store
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  Speaker 1: in Melbourne, CBD last year. We're talking fifty million bucks
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  Speaker 1: to fit out, and.
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  Speaker 2: It needed fifty thousand weekly visitors to be profitable.
• 3:54
  Speaker 1: In fact, when it's first door opened, it smashed that
• 3:56
  Speaker 1: with over seventy thousand customers walking through the doors each week.
• 3:59
  Speaker 2: So Mecha is bringing in innovation to the online and
• 4:01
  Speaker 2: instore experience.
• 4:02
  Speaker 1: For our third and final story, Apple CEO Tim Cook
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  Speaker 1: has announced plans to step down, with his longtime team
• 4:09
  Speaker 1: member John Turners taking on the top gig. These transitions
• 4:11
  Speaker 1: don't happen often, so they are big news. Tell me
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  Speaker 1: what's going on here? So Jasey boy taking it all
• 4:15
  Speaker 1: the way back. Steve Jobs was, of course the Apple
• 4:18
  Speaker 1: CEO who turned it from a bankrupt tech company to
• 4:20
  Speaker 1: one of the most valuable companies in the world.
• 4:22
  Speaker 2: Yeah, he made the Mac the iPod, the iPhone, and
• 4:24
  Speaker 2: some of the most beautiful tech products in the world.
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  Speaker 1: Then he handed over to Tim Apple aka Tim Cook,
• 4:30
  Speaker 1: who's been steering the Apple ship since twenty eleven.
• 4:32
  Speaker 2: And since twenty eleven, Tim Cook launched the AirPods, the
• 4:34
  Speaker 2: Apple Watch, and a heap of the software subscriptions too.
• 4:37
  Speaker 1: But now mister Cook has announced You'll step down as
• 4:39
  Speaker 1: CEO to become executive chair this September.
• 4:42
  Speaker 2: And the new head Honcho John Turners. Yep.
• 4:44
  Speaker 1: He's been at Apple since two thousand and one. Product
• 4:46
  Speaker 1: design and hardware engineering, or.
• 4:48
  Speaker 2: As Tim Cook says, he has the mind of an engineer,
• 4:51
  Speaker 2: the soul of an innovator, and the heart to lead
• 4:53
  Speaker 2: with integrity.
• 4:54
  Speaker 1: I'm ready to run through a brick wall and be
• 4:56
  Speaker 1: man given.
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  Speaker 2: Apple's mark cap has grown from three hundred and fifty
• 4:58
  Speaker 2: million US dollars back in twenty eleven to four billion
• 5:01
  Speaker 2: US dollars under Tim Cook. You can bet that the
• 5:03
  Speaker 2: Apple board want a smooth and uncontroversial transition. So what's
• 5:06
  Speaker 2: the key learning here? For major public companies, the goal
• 5:09
  Speaker 2: of a transition is usually pretty simple, avoid disruption and
• 5:12
  Speaker 2: avoid any investor.
• 5:13
  Speaker 1: Doubts, and juzuoit That's why for companies like Apple, these
• 5:16
  Speaker 1: major transitions are not decided overnight.
• 5:18
  Speaker 2: It's often years in the making.
• 5:20
  Speaker 1: You see, investors and employees want stability, especially when a
• 5:23
  Speaker 1: long standing and successful CEO steps down.
• 5:25
  Speaker 2: One that's more than ten ex the share price in
• 5:27
  Speaker 2: the last fifteen years.
• 5:28
  Speaker 1: That's why companies often promote internally, like Apple has done
• 5:31
  Speaker 1: with John Turners, who's been at Apple for twenty five years.
• 5:33
  Speaker 1: Like Amazon did with the transition from Jeff Bezos to
• 5:36
  Speaker 1: Andy Jasse who'd been there more than twenty five years
• 5:39
  Speaker 1: before taking on the CEO role.
• 5:40
  Speaker 2: Microsoft did the same when they transition from Steve Baumert
• 5:42
  Speaker 2: to Sachinadella.
• 5:43
  Speaker 1: We'd been there for twenty two years before taking on
• 5:45
  Speaker 1: the CEO role, And like.
• 5:46
  Speaker 2: Netflix did transitioning from Redtastings to Ted surround Us and Josuait.
• 5:50
  Speaker 1: After this announcement, Apple share price barely.
• 5:52
  Speaker 2: Moved, which is a good result for such a major announcement.
• 5:55
  Speaker 2: Flex Sam, if you want to save money this month
• 5:57
  Speaker 2: with the cost of living, squeeze the Flux Subscriptions track
• 5:59
  Speaker 2: out will tell me where to go. It identifies all
• 6:01
  Speaker 2: your subscriptions into one place that you can save some
• 6:03
  Speaker 2: Mullah and cancel those unused subscriptions to download the Flux
• 6:06
  Speaker 2: app to check out the subscription tracker.
• 6:08
  Speaker 1: Thanks for listening, and we'll see you on Friday.