Speaker 1: This is what the Flux I'm Brett and I'm justin
Speaker 1: added Friday to sixteenth of all.
Speaker 2: With Dzzy boy.
Speaker 3: Australian wages increased at their slowest pace in a year
Speaker 3: in the June quarter. I'm talking it went up by
Speaker 3: zero point eight percent in the three months to June.
Speaker 2: According to the ABS.
Speaker 3: Now that is good news for the RBA who did
Speaker 3: not want to see wages pumping up this economy.
Speaker 1: Slewed down Wages boxapp. If you're looking for a boost
Speaker 1: to your cash then there is one simple way. It
Speaker 1: is our weekly quiz quick Stick where if you're the
Speaker 1: first person to adds that three business or finance questions
Speaker 1: correctly in the Flux app, you win fifty bucks of
Speaker 1: cold hard cash. The perfect way to start your weekend.
Speaker 1: To make sure you download the Blocks app and have
Speaker 1: your notifications turned on today three.
Speaker 3: Truly revolutionary stories today, Dozzy boy Oo, let's do it
Speaker 3: for our first combank has announced a whopping and I'm
Speaker 3: talking whopping, nine point eight billion dollar cash profit for
Speaker 3: the last twelve months after growing its customer base even further.
Speaker 1: Not a small amount of cash profit, be mads, tell
Speaker 1: me what is going on here?
Speaker 2: Well, Juzzy Boy.
Speaker 3: As you know, Combank is the big yellow bank with
Speaker 3: the biggest of big customer bases.
Speaker 1: Yeah, we're talking more than fifty point nine million customers
Speaker 1: in Australia.
Speaker 3: And it's no surprise that investors were eagerly awaiting Big
Speaker 3: Yellow's results.
Speaker 1: And now b Man Combank's announced it's whopping a nine
Speaker 1: point eight billion dollar annual cash profit for the last
Speaker 1: financial year.
Speaker 3: And Big Yellow had a fair few things to get
Speaker 3: excited about.
Speaker 1: Yeah, the number of odsies that use Combank as their
Speaker 1: main financial institution jumped by nearly one percent.
Speaker 3: That means more than one in three Australians use Combank
Speaker 3: for things like their salary payments and their bank accounts.
Speaker 1: And b Man Big Yellow also dominated the business banking space,
Speaker 1: with more than twenty five percent of businesses with Kombak.
Speaker 3: But Juzzi Boy CBA's profits actually fell in the second
Speaker 3: half of the year in comparison to the first.
Speaker 1: Clearly it didn't seem to bother their rusted on investors,
Speaker 1: who now value Kombank at two hundred and twenty seven
Speaker 1: billion baccarinis.
Speaker 3: Yeah, and many other investors are still a bit unclear
Speaker 3: why Combank is valued. It's such a different valuation to
Speaker 3: its friends and its foes.
Speaker 1: ADS, your West packs, your an Z's.
Speaker 2: That is a right. So what is the key learning here?
Speaker 1: Not all price to earning or PE ratios are created equally.
Speaker 3: Yep, Companies in the same industry can have wildly different
Speaker 3: valuations based on their unique strengths and their growth potential.
Speaker 1: Get this, theman Combank is valued at twenty three times
Speaker 1: its earnings.
Speaker 3: Its earnings were nine point eight billion, its market value
Speaker 3: is two hundred and twenty seven billion.
Speaker 2: That's twenty three times.
Speaker 1: But on the other hand, banks like ANZ are only
Speaker 1: valued at thirteen times earnings.
Speaker 3: NAB is valued at let me just heat turned the
Speaker 3: page sixteen times earning.
Speaker 1: And west PACs also sixteen times earnings.
Speaker 3: So how can different companies in the same industry have
Speaker 3: different multiples?
Speaker 2: Juzzy boy.
Speaker 1: How a company like Combank might have a high earnings
Speaker 1: ratio because of its dominance in market share.
Speaker 2: Or perhaps its customer loyalty, all the fact.
Speaker 1: That investors just rate their execution.
Speaker 3: But ultimately, juzzyboy, it comes down to the level of
Speaker 3: guoth that investors believe will come from this company compared
Speaker 3: to its competitors.
Speaker 1: So it's better say there is a lot of pressure
Speaker 1: on Combank to keep performing if it wants to maintain
Speaker 1: its valuation.
Speaker 3: For our second story, the Telstra has seen its annual
Speaker 3: net profit take a double digit drop after its mobile
Speaker 3: price rises just were not enough, juzzy boy, to offset
Speaker 3: some major expenses.
Speaker 1: The BT really fully as many leavers as humanly possible
Speaker 1: to get back on track.
Speaker 2: So what is going on here, well, juzzy boy.
Speaker 3: Telstra is the biggest of the telco networks in Australia.
Speaker 1: It was previously in by the government, but was first
Speaker 1: started on its privatization journey in nineteen ninety seven when
Speaker 1: it listed on the ASEX, back.
Speaker 3: When the Adelaide Crows were premiers of VFL. How about that,
Speaker 3: juzzy boy.
Speaker 1: But over the past few years, the BIGT has been
Speaker 1: struggling with a whole heap.
Speaker 3: Of costs and competitors eating into its market share, I
Speaker 3: might add.
Speaker 1: Yeah, So now Telstra is announced a thirteen percent slide
Speaker 1: in an annual net profit to just under one point
Speaker 1: eight billion bucks.
Speaker 2: It's all bad news with you today, juzzy boy. Surely
Speaker 2: some good news for me.
Speaker 1: Well, it's earnings from its mobile division jump more than
Speaker 1: nine percent, but there.
Speaker 3: Were a whole heap of costs in the business as well.
Speaker 3: If I can just get negative for a second, talk
Speaker 3: me through a negative man. Well, we're talking two hundred
Speaker 3: and forty seven million dollars in redundancy costs, as well
Speaker 3: as right.
Speaker 1: Down's left and right and center to its enterprise business.
Speaker 3: A division of the company that struggled more than Joe
Speaker 3: Biden would in a one hundred meters sprint in the Olympics.
Speaker 1: Also right down to its retail energy business retails on
Speaker 1: its business leases.
Speaker 2: But despite this huge drop and profit it's share price
Speaker 2: it's still somehow miraculously it went.
Speaker 1: Up, mainly because these write downs are helping Telstra get
Speaker 1: back on track.
Speaker 3: Oh that's a big call for me, juzy boy. So
Speaker 3: right now I'm wondering what is the key learning here?
Speaker 1: Write downs It may look like a red flag on
Speaker 1: a company's profit and lost statement, but in reality they're
Speaker 1: not always as bad.
Speaker 2: As they see, Yeah, juzzy boy.
Speaker 3: A write down occurs when a company reduces the value
Speaker 3: of an asset that it owns, and that's often.
Speaker 1: Because it's overvalued compared to its current market value.
Speaker 3: Now In Telstra's case, it wrote down the value of
Speaker 3: its enterprise business by three hundred and eleven million buckaroonies.
Speaker 1: But but man, that doesn't mean three hundred and eleven million
Speaker 1: dollars in cash is leaving the Telstra business.
Speaker 2: Now.
Speaker 3: It's an accounting thang which lowest Telstra's reported profits.
Speaker 1: And ultimately the amount of tax the Telstra needs to pay.
Speaker 2: The taxes. It's always about the taxes, juzzy boy.
Speaker 1: And that's why some companies strategically use right downs to
Speaker 1: manage their financial statements and tax obligations as well.
Speaker 3: And it's a key part of the reason why Teltra
Speaker 3: share price did not take a hit.
Speaker 1: For our third and final story, Universal Music Group and
Speaker 1: Meta are expanding their music licensing deal, which will make
Speaker 1: Universal songs available on all of Metas platforms.
Speaker 3: Take that TikTok, talk about rubbing salt into the wound,
Speaker 3: Josey Way, What is the story right here?
Speaker 1: All right? Well? Universal Music Group is one of the
Speaker 1: biggest record labels worldwide.
Speaker 3: It's the name behind major artists like Taylor Swift, Billie Eilish,
Speaker 3: The Weekend, Kendrick Lamar, don't.
Speaker 1: Forget Cissa and now be Man. Universal's just announced that
Speaker 1: it's expanding it's a multi year music license with Meta.
Speaker 2: Big news for Scissor Juzzy Boy.
Speaker 1: That means Universal songs will we made available across all
Speaker 1: of metas platforms and Jose Boy.
Speaker 3: This deal is off the back of a fallout between
Speaker 3: Universal and TikTok that happened earlier this year.
Speaker 2: That was huge.
Speaker 1: Yeah, Universal took its music and left TikTok after the
Speaker 1: two companies were unable to agree on a royalty rate.
Speaker 3: But Universal reckons that its new deal with Meta expands
Speaker 3: financial opportunities for Universal.
Speaker 1: And protects the royalties of its artist.
Speaker 2: Oh the win win, hoping for the best of both worlds.
Speaker 1: So what is the key learning here?
Speaker 3: Music labels are currently walking a tightrope between short term
Speaker 3: success and long term financial growth.
Speaker 1: On the one hand, music labels need social media for
Speaker 1: their artist's music to be discovered.
Speaker 3: In fact, fifty percent of people age eighteen to twenty
Speaker 3: four use social to discover new music.
Speaker 1: And this helps artists catapult their careers in ways they
Speaker 1: didn't even know possible.
Speaker 3: Think Doja Cat and now Charlie XCX, whose careers popped
Speaker 3: off after their music went viral.
Speaker 2: On social But.
Speaker 1: On the other hand, these artists also need to be
Speaker 1: compensated for their work.
Speaker 2: Which was apparently a challenge for old TikTok.
Speaker 1: So it looks like Universal was trying to find the
Speaker 1: middle ground with its new metadis fortam. If you think
Speaker 1: you've got the best knowledge on business and finance over
Speaker 1: the past week, and there's one way to prove it.
Speaker 1: It's through quick stix three business questions and if you're
Speaker 1: a first to answer correctly, you win fifty bakarunies. Make
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Speaker 2: Thanks for listening and we'll see you on Monday.