1 00:00:05,280 --> 00:00:07,880 Speaker 1: This is what the Flux I'm Brett and I'm justin 2 00:00:07,960 --> 00:00:09,520 Speaker 1: added Friday to sixteenth of all. 3 00:00:09,440 --> 00:00:10,080 Speaker 2: With Dzzy boy. 4 00:00:10,080 --> 00:00:13,920 Speaker 3: Australian wages increased at their slowest pace in a year 5 00:00:14,000 --> 00:00:16,560 Speaker 3: in the June quarter. I'm talking it went up by 6 00:00:16,640 --> 00:00:19,200 Speaker 3: zero point eight percent in the three months to June. 7 00:00:18,960 --> 00:00:20,800 Speaker 2: According to the ABS. 8 00:00:20,880 --> 00:00:23,479 Speaker 3: Now that is good news for the RBA who did 9 00:00:23,520 --> 00:00:26,640 Speaker 3: not want to see wages pumping up this economy. 10 00:00:26,160 --> 00:00:29,000 Speaker 1: Slewed down Wages boxapp. If you're looking for a boost 11 00:00:29,040 --> 00:00:30,920 Speaker 1: to your cash then there is one simple way. It 12 00:00:31,000 --> 00:00:33,000 Speaker 1: is our weekly quiz quick Stick where if you're the 13 00:00:33,000 --> 00:00:35,479 Speaker 1: first person to adds that three business or finance questions 14 00:00:35,520 --> 00:00:37,920 Speaker 1: correctly in the Flux app, you win fifty bucks of 15 00:00:38,000 --> 00:00:40,760 Speaker 1: cold hard cash. The perfect way to start your weekend. 16 00:00:40,840 --> 00:00:42,400 Speaker 1: To make sure you download the Blocks app and have 17 00:00:42,440 --> 00:00:44,560 Speaker 1: your notifications turned on today three. 18 00:00:45,000 --> 00:00:48,159 Speaker 3: Truly revolutionary stories today, Dozzy boy Oo, let's do it 19 00:00:48,200 --> 00:00:51,080 Speaker 3: for our first combank has announced a whopping and I'm 20 00:00:51,080 --> 00:00:54,440 Speaker 3: talking whopping, nine point eight billion dollar cash profit for 21 00:00:54,520 --> 00:00:58,120 Speaker 3: the last twelve months after growing its customer base even further. 22 00:00:58,240 --> 00:01:00,319 Speaker 1: Not a small amount of cash profit, be mads, tell 23 00:01:00,360 --> 00:01:01,280 Speaker 1: me what is going on here? 24 00:01:01,320 --> 00:01:02,000 Speaker 2: Well, Juzzy Boy. 25 00:01:02,080 --> 00:01:05,160 Speaker 3: As you know, Combank is the big yellow bank with 26 00:01:05,240 --> 00:01:07,360 Speaker 3: the biggest of big customer bases. 27 00:01:07,440 --> 00:01:10,319 Speaker 1: Yeah, we're talking more than fifty point nine million customers 28 00:01:10,319 --> 00:01:11,000 Speaker 1: in Australia. 29 00:01:11,040 --> 00:01:13,960 Speaker 3: And it's no surprise that investors were eagerly awaiting Big 30 00:01:14,040 --> 00:01:14,880 Speaker 3: Yellow's results. 31 00:01:14,959 --> 00:01:17,280 Speaker 1: And now b Man Combank's announced it's whopping a nine 32 00:01:17,280 --> 00:01:19,800 Speaker 1: point eight billion dollar annual cash profit for the last 33 00:01:19,800 --> 00:01:20,520 Speaker 1: financial year. 34 00:01:20,640 --> 00:01:23,240 Speaker 3: And Big Yellow had a fair few things to get 35 00:01:23,240 --> 00:01:23,840 Speaker 3: excited about. 36 00:01:23,880 --> 00:01:26,080 Speaker 1: Yeah, the number of odsies that use Combank as their 37 00:01:26,080 --> 00:01:29,000 Speaker 1: main financial institution jumped by nearly one percent. 38 00:01:29,240 --> 00:01:32,160 Speaker 3: That means more than one in three Australians use Combank 39 00:01:32,200 --> 00:01:35,240 Speaker 3: for things like their salary payments and their bank accounts. 40 00:01:35,280 --> 00:01:38,440 Speaker 1: And b Man Big Yellow also dominated the business banking space, 41 00:01:38,520 --> 00:01:41,160 Speaker 1: with more than twenty five percent of businesses with Kombak. 42 00:01:41,200 --> 00:01:44,080 Speaker 3: But Juzzi Boy CBA's profits actually fell in the second 43 00:01:44,120 --> 00:01:46,360 Speaker 3: half of the year in comparison to the first. 44 00:01:46,440 --> 00:01:49,200 Speaker 1: Clearly it didn't seem to bother their rusted on investors, 45 00:01:49,240 --> 00:01:51,640 Speaker 1: who now value Kombank at two hundred and twenty seven 46 00:01:51,840 --> 00:01:52,840 Speaker 1: billion baccarinis. 47 00:01:52,880 --> 00:01:55,400 Speaker 3: Yeah, and many other investors are still a bit unclear 48 00:01:55,440 --> 00:01:58,240 Speaker 3: why Combank is valued. It's such a different valuation to 49 00:01:58,320 --> 00:01:59,600 Speaker 3: its friends and its foes. 50 00:02:00,080 --> 00:02:01,800 Speaker 1: ADS, your West packs, your an Z's. 51 00:02:02,080 --> 00:02:04,320 Speaker 2: That is a right. So what is the key learning here? 52 00:02:04,400 --> 00:02:08,160 Speaker 1: Not all price to earning or PE ratios are created equally. 53 00:02:08,280 --> 00:02:11,200 Speaker 3: Yep, Companies in the same industry can have wildly different 54 00:02:11,240 --> 00:02:14,440 Speaker 3: valuations based on their unique strengths and their growth potential. 55 00:02:14,520 --> 00:02:17,239 Speaker 1: Get this, theman Combank is valued at twenty three times 56 00:02:17,280 --> 00:02:17,959 Speaker 1: its earnings. 57 00:02:18,000 --> 00:02:20,880 Speaker 3: Its earnings were nine point eight billion, its market value 58 00:02:20,919 --> 00:02:22,600 Speaker 3: is two hundred and twenty seven billion. 59 00:02:23,000 --> 00:02:24,560 Speaker 2: That's twenty three times. 60 00:02:24,639 --> 00:02:26,720 Speaker 1: But on the other hand, banks like ANZ are only 61 00:02:26,800 --> 00:02:28,280 Speaker 1: valued at thirteen times earnings. 62 00:02:28,360 --> 00:02:30,200 Speaker 3: NAB is valued at let me just heat turned the 63 00:02:30,200 --> 00:02:31,880 Speaker 3: page sixteen times earning. 64 00:02:31,800 --> 00:02:33,919 Speaker 1: And west PACs also sixteen times earnings. 65 00:02:33,960 --> 00:02:36,320 Speaker 3: So how can different companies in the same industry have 66 00:02:36,520 --> 00:02:37,560 Speaker 3: different multiples? 67 00:02:37,600 --> 00:02:38,040 Speaker 2: Juzzy boy. 68 00:02:38,120 --> 00:02:40,440 Speaker 1: How a company like Combank might have a high earnings 69 00:02:40,520 --> 00:02:42,920 Speaker 1: ratio because of its dominance in market share. 70 00:02:42,720 --> 00:02:44,920 Speaker 2: Or perhaps its customer loyalty, all the fact. 71 00:02:44,760 --> 00:02:46,600 Speaker 1: That investors just rate their execution. 72 00:02:46,800 --> 00:02:49,320 Speaker 3: But ultimately, juzzyboy, it comes down to the level of 73 00:02:49,400 --> 00:02:52,560 Speaker 3: guoth that investors believe will come from this company compared 74 00:02:52,600 --> 00:02:53,760 Speaker 3: to its competitors. 75 00:02:53,320 --> 00:02:55,440 Speaker 1: So it's better say there is a lot of pressure 76 00:02:55,440 --> 00:02:57,760 Speaker 1: on Combank to keep performing if it wants to maintain 77 00:02:57,800 --> 00:02:58,440 Speaker 1: its valuation. 78 00:02:58,639 --> 00:03:01,800 Speaker 3: For our second story, the Telstra has seen its annual 79 00:03:01,840 --> 00:03:05,120 Speaker 3: net profit take a double digit drop after its mobile 80 00:03:05,160 --> 00:03:08,280 Speaker 3: price rises just were not enough, juzzy boy, to offset 81 00:03:08,400 --> 00:03:09,560 Speaker 3: some major expenses. 82 00:03:09,560 --> 00:03:12,400 Speaker 1: The BT really fully as many leavers as humanly possible 83 00:03:12,480 --> 00:03:13,160 Speaker 1: to get back on track. 84 00:03:13,240 --> 00:03:15,000 Speaker 2: So what is going on here, well, juzzy boy. 85 00:03:15,000 --> 00:03:18,440 Speaker 3: Telstra is the biggest of the telco networks in Australia. 86 00:03:18,760 --> 00:03:20,760 Speaker 1: It was previously in by the government, but was first 87 00:03:20,840 --> 00:03:23,919 Speaker 1: started on its privatization journey in nineteen ninety seven when 88 00:03:23,919 --> 00:03:25,600 Speaker 1: it listed on the ASEX, back. 89 00:03:25,440 --> 00:03:28,120 Speaker 3: When the Adelaide Crows were premiers of VFL. How about that, 90 00:03:28,200 --> 00:03:28,720 Speaker 3: juzzy boy. 91 00:03:28,720 --> 00:03:30,480 Speaker 1: But over the past few years, the BIGT has been 92 00:03:30,520 --> 00:03:32,080 Speaker 1: struggling with a whole heap. 93 00:03:31,919 --> 00:03:34,440 Speaker 3: Of costs and competitors eating into its market share, I 94 00:03:34,480 --> 00:03:34,880 Speaker 3: might add. 95 00:03:34,960 --> 00:03:37,760 Speaker 1: Yeah, So now Telstra is announced a thirteen percent slide 96 00:03:37,760 --> 00:03:39,839 Speaker 1: in an annual net profit to just under one point 97 00:03:39,880 --> 00:03:40,800 Speaker 1: eight billion bucks. 98 00:03:40,840 --> 00:03:42,800 Speaker 2: It's all bad news with you today, juzzy boy. Surely 99 00:03:42,920 --> 00:03:43,760 Speaker 2: some good news for me. 100 00:03:43,920 --> 00:03:46,040 Speaker 1: Well, it's earnings from its mobile division jump more than 101 00:03:46,080 --> 00:03:47,640 Speaker 1: nine percent, but there. 102 00:03:47,440 --> 00:03:49,440 Speaker 3: Were a whole heap of costs in the business as well. 103 00:03:49,480 --> 00:03:51,320 Speaker 3: If I can just get negative for a second, talk 104 00:03:51,400 --> 00:03:53,640 Speaker 3: me through a negative man. Well, we're talking two hundred 105 00:03:53,640 --> 00:03:56,520 Speaker 3: and forty seven million dollars in redundancy costs, as well 106 00:03:56,560 --> 00:03:56,960 Speaker 3: as right. 107 00:03:56,920 --> 00:04:00,280 Speaker 1: Down's left and right and center to its enterprise business. 108 00:04:00,080 --> 00:04:03,160 Speaker 3: A division of the company that struggled more than Joe 109 00:04:03,160 --> 00:04:05,960 Speaker 3: Biden would in a one hundred meters sprint in the Olympics. 110 00:04:06,520 --> 00:04:09,200 Speaker 1: Also right down to its retail energy business retails on 111 00:04:09,240 --> 00:04:10,120 Speaker 1: its business leases. 112 00:04:10,280 --> 00:04:12,720 Speaker 2: But despite this huge drop and profit it's share price 113 00:04:12,800 --> 00:04:15,200 Speaker 2: it's still somehow miraculously it went. 114 00:04:15,120 --> 00:04:17,920 Speaker 1: Up, mainly because these write downs are helping Telstra get 115 00:04:17,920 --> 00:04:18,480 Speaker 1: back on track. 116 00:04:18,560 --> 00:04:20,200 Speaker 3: Oh that's a big call for me, juzy boy. So 117 00:04:20,279 --> 00:04:22,480 Speaker 3: right now I'm wondering what is the key learning here? 118 00:04:22,520 --> 00:04:24,360 Speaker 1: Write downs It may look like a red flag on 119 00:04:24,400 --> 00:04:26,800 Speaker 1: a company's profit and lost statement, but in reality they're 120 00:04:26,839 --> 00:04:27,719 Speaker 1: not always as bad. 121 00:04:27,560 --> 00:04:28,800 Speaker 2: As they see, Yeah, juzzy boy. 122 00:04:28,800 --> 00:04:31,480 Speaker 3: A write down occurs when a company reduces the value 123 00:04:31,480 --> 00:04:34,120 Speaker 3: of an asset that it owns, and that's often. 124 00:04:33,880 --> 00:04:36,760 Speaker 1: Because it's overvalued compared to its current market value. 125 00:04:36,800 --> 00:04:38,760 Speaker 3: Now In Telstra's case, it wrote down the value of 126 00:04:38,760 --> 00:04:42,120 Speaker 3: its enterprise business by three hundred and eleven million buckaroonies. 127 00:04:42,160 --> 00:04:44,599 Speaker 1: But but man, that doesn't mean three hundred and eleven million 128 00:04:44,600 --> 00:04:46,880 Speaker 1: dollars in cash is leaving the Telstra business. 129 00:04:46,960 --> 00:04:47,120 Speaker 2: Now. 130 00:04:47,160 --> 00:04:50,760 Speaker 3: It's an accounting thang which lowest Telstra's reported profits. 131 00:04:50,400 --> 00:04:53,160 Speaker 1: And ultimately the amount of tax the Telstra needs to pay. 132 00:04:53,240 --> 00:04:55,440 Speaker 2: The taxes. It's always about the taxes, juzzy boy. 133 00:04:55,520 --> 00:04:58,279 Speaker 1: And that's why some companies strategically use right downs to 134 00:04:58,320 --> 00:05:01,360 Speaker 1: manage their financial statements and tax obligations as well. 135 00:05:01,440 --> 00:05:03,800 Speaker 3: And it's a key part of the reason why Teltra 136 00:05:03,839 --> 00:05:05,360 Speaker 3: share price did not take a hit. 137 00:05:05,440 --> 00:05:08,479 Speaker 1: For our third and final story, Universal Music Group and 138 00:05:08,560 --> 00:05:11,720 Speaker 1: Meta are expanding their music licensing deal, which will make 139 00:05:11,839 --> 00:05:14,880 Speaker 1: Universal songs available on all of Metas platforms. 140 00:05:15,000 --> 00:05:18,440 Speaker 3: Take that TikTok, talk about rubbing salt into the wound, 141 00:05:18,520 --> 00:05:20,000 Speaker 3: Josey Way, What is the story right here? 142 00:05:20,000 --> 00:05:21,640 Speaker 1: All right? Well? Universal Music Group is one of the 143 00:05:21,680 --> 00:05:23,360 Speaker 1: biggest record labels worldwide. 144 00:05:23,480 --> 00:05:26,680 Speaker 3: It's the name behind major artists like Taylor Swift, Billie Eilish, 145 00:05:26,760 --> 00:05:29,200 Speaker 3: The Weekend, Kendrick Lamar, don't. 146 00:05:29,040 --> 00:05:32,599 Speaker 1: Forget Cissa and now be Man. Universal's just announced that 147 00:05:32,680 --> 00:05:35,520 Speaker 1: it's expanding it's a multi year music license with Meta. 148 00:05:35,600 --> 00:05:37,000 Speaker 2: Big news for Scissor Juzzy Boy. 149 00:05:37,080 --> 00:05:40,120 Speaker 1: That means Universal songs will we made available across all 150 00:05:40,120 --> 00:05:41,680 Speaker 1: of metas platforms and Jose Boy. 151 00:05:41,760 --> 00:05:43,839 Speaker 3: This deal is off the back of a fallout between 152 00:05:43,920 --> 00:05:46,280 Speaker 3: Universal and TikTok that happened earlier this year. 153 00:05:46,320 --> 00:05:46,760 Speaker 2: That was huge. 154 00:05:46,839 --> 00:05:49,640 Speaker 1: Yeah, Universal took its music and left TikTok after the 155 00:05:49,640 --> 00:05:52,200 Speaker 1: two companies were unable to agree on a royalty rate. 156 00:05:52,240 --> 00:05:55,480 Speaker 3: But Universal reckons that its new deal with Meta expands 157 00:05:55,520 --> 00:05:57,880 Speaker 3: financial opportunities for Universal. 158 00:05:57,480 --> 00:05:59,120 Speaker 1: And protects the royalties of its artist. 159 00:05:59,200 --> 00:06:02,120 Speaker 2: Oh the win win, hoping for the best of both worlds. 160 00:06:02,240 --> 00:06:03,680 Speaker 1: So what is the key learning here? 161 00:06:03,800 --> 00:06:06,839 Speaker 3: Music labels are currently walking a tightrope between short term 162 00:06:06,880 --> 00:06:08,720 Speaker 3: success and long term financial growth. 163 00:06:08,760 --> 00:06:11,279 Speaker 1: On the one hand, music labels need social media for 164 00:06:11,320 --> 00:06:13,000 Speaker 1: their artist's music to be discovered. 165 00:06:13,040 --> 00:06:15,320 Speaker 3: In fact, fifty percent of people age eighteen to twenty 166 00:06:15,360 --> 00:06:17,640 Speaker 3: four use social to discover new music. 167 00:06:17,440 --> 00:06:20,000 Speaker 1: And this helps artists catapult their careers in ways they 168 00:06:20,000 --> 00:06:21,320 Speaker 1: didn't even know possible. 169 00:06:21,480 --> 00:06:25,279 Speaker 3: Think Doja Cat and now Charlie XCX, whose careers popped 170 00:06:25,320 --> 00:06:26,840 Speaker 3: off after their music went viral. 171 00:06:26,920 --> 00:06:27,760 Speaker 2: On social But. 172 00:06:27,680 --> 00:06:29,600 Speaker 1: On the other hand, these artists also need to be 173 00:06:29,640 --> 00:06:30,960 Speaker 1: compensated for their work. 174 00:06:30,720 --> 00:06:32,800 Speaker 2: Which was apparently a challenge for old TikTok. 175 00:06:32,960 --> 00:06:34,960 Speaker 1: So it looks like Universal was trying to find the 176 00:06:34,960 --> 00:06:37,800 Speaker 1: middle ground with its new metadis fortam. If you think 177 00:06:37,880 --> 00:06:40,360 Speaker 1: you've got the best knowledge on business and finance over 178 00:06:40,360 --> 00:06:42,160 Speaker 1: the past week, and there's one way to prove it. 179 00:06:42,160 --> 00:06:44,360 Speaker 1: It's through quick stix three business questions and if you're 180 00:06:44,400 --> 00:06:47,360 Speaker 1: a first to answer correctly, you win fifty bakarunies. Make 181 00:06:47,400 --> 00:06:49,040 Speaker 1: sure to download the Flux app and have your noted 182 00:06:49,040 --> 00:06:49,760 Speaker 1: pasions turned on. 183 00:06:49,920 --> 00:06:52,600 Speaker 2: Thanks for listening and we'll see you on Monday.