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Speaker 1: This is what the Flux. I'm Brett and I'm Justin

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Speaker 1: and it's Friday, the thirteenth of June.

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Speaker 2: Bookie, Juzzy Boy, Another day, another embryo bungle by monash IVF.

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Speaker 2: They've admitted to a second embryo transfer issue this year alone.

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Speaker 2: Next minute, share price falls another twenty percent. The following minute,

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Speaker 2: CEO steps down. Bad news after bad news for this lot.

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Speaker 1: Jesuits not looking good, b manu app. This is our

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Speaker 1: last episode until July ninth. But if you still want

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Speaker 1: to get your Flux fix, we have a heap of

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Speaker 1: new content and courses and videos rolled out in the

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Speaker 1: Flux app each and every day. We're talking tax time

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Speaker 1: tips to eachf courses. The Flux app is updated each

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Speaker 1: day with the things that you need to know about money.

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Speaker 1: To make sure it's down with the Flux app to

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Speaker 1: check it out and get your Flux fix.

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Speaker 2: Three inspiring stories today Juzzy Boy for our first. Jetstar

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Speaker 2: Asia is being shut down after twenty years of trying

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Speaker 2: to break into the Asian market and failing.

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Speaker 1: Geez in for a rough landing, it seems, b Man,

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Speaker 1: so tell me more well.

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Speaker 2: Jetstar Airways is the resident budget Airline of Australia.

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Speaker 1: You want some flight entertainment, that'll cost you.

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Speaker 2: You want some nibbles? Oh you bet that'll cost you.

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Speaker 1: You want to choose your seat cough in.

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Speaker 2: It was created by Quantus in two thousand and three

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Speaker 2: to step into the budget airline space to compete with

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Speaker 2: Virgin Blue.

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Speaker 1: And in two thousand and four Quantas also launched Jetstar Asia,

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Speaker 1: which is based in Singapore and flies all around Southeast

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Speaker 1: Asia and Jazzyboy.

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Speaker 2: Up until now they've been competing with other budget airlines

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Speaker 2: in Asia.

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Speaker 1: Your scoots, my favorite, your air Asias and do not

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Speaker 1: ever forget viet Jet as well.

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Speaker 2: No, but in the post COVID world, Jetstar Asi's costs

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Speaker 2: have spiked nearly two hundred percent and.

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Speaker 1: At the same time, intense competition in Asia keeps driving

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Speaker 1: flight prices down.

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Speaker 2: In fact, Jazzy Boy, in twenty years they've only turned

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Speaker 2: a profit six times wow.

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Speaker 1: And this financial year alone, Jetstar Asia is reported to

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Speaker 1: lose another thirty five million dollars yaikarinis.

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Speaker 2: That can't be good for shareholder's confidence.

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Speaker 1: Nope, not at all, And that's why Quantus a CEO,

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Speaker 1: is finally making the call to shut down Jetstar Asia for.

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Speaker 2: Good Quantus reckons this will unlock five hundred million dollar

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Speaker 2: in capital that can be reinvested in the local business.

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Speaker 1: So what is the key learning here?

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Speaker 2: Just like in sport, businesses usually have a home ground

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Speaker 2: advantage when they operate in their domestic market, so be man.

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Speaker 1: While it's tempting for ossie companies to expand into international orders,

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Speaker 1: it's not always an easy market to crack.

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Speaker 2: Jetstar Asia was a foreign company operating against budget airlines

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Speaker 2: that were operating on their very own.

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Speaker 1: Turf, which means Scoot and Air Asia had the upper

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Speaker 1: hand in terms of understanding the culture and the regulations

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Speaker 1: in Asia.

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Speaker 2: Having higher brand loyalty and lower labor costs as well,

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Speaker 2: which made it possible to operate their services on razor

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Speaker 2: thin margins.

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Speaker 1: But be man, they say. The first time that an

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Speaker 1: oussie business has gone knocking on Asia's door.

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Speaker 2: Back in twenty sixteen, and Z announced a major celldown

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Speaker 2: of its retail banks in Asia.

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Speaker 1: Yep, and they had some pretty big expectations when they

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Speaker 1: came in, but the CEO all the time admitted the

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Speaker 1: returns didn't quite match their expectation. Now that Jetstar's back

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Speaker 1: to focusing on domestic flights. Maybe those home field advantages

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Speaker 1: will give them a little extra competitive edge. For our

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Speaker 1: second story, Cochlear, the ASEX listed medical device company as

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Speaker 1: senor shares take a hit, but it's hoping that it's

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Speaker 1: bionic ear will save the day.

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Speaker 2: Implants help people tune in, but right now investors are

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Speaker 2: tuning out, So tell me more.

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Speaker 1: Okay. So Cocklear is the ASEX listed medical device company

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Speaker 1: to make some of the world's leading hearing implant.

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Speaker 2: In fact, Cockley has sold over seven hundred and fifty

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Speaker 2: thousand hearing implants worldwide in more than one hundred and

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Speaker 2: eighty countries.

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Speaker 1: Man, you may remember that Cochlear was originally spun out

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Speaker 1: of the CSIRO and it listed on the ASEX in

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Speaker 1: nineteen ninety five, and since then it has boomed YEP.

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Speaker 2: Its market cap was under two hundred million bucks back

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Speaker 2: then and now it's more than seventeen bill But.

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Speaker 1: Be Man, Cocklear's FI twenty five profit guidance is making

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Speaker 1: a lot less noise than expected.

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Speaker 2: YEP. It has downgraded profit expectations from up to four

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Speaker 2: hundred and thirty million dollars down to a max of

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Speaker 2: four hundred mil and that.

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Speaker 1: Means they're barely a whisper above last year's three hundred

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Speaker 1: and eighty seven million dollars in revenue.

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Speaker 2: Growth, so small you'd need a hearing aid to pick

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Speaker 2: it up. And why the slow growth use boy, Well,

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Speaker 2: it's been losing a bit market share to competitors, and

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Speaker 2: it's also been facing a shift towards lower margin products

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Speaker 2: in emerging markets. But there is hope for twenty six

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Speaker 2: b man because Cochlear is planning to launch a world

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Speaker 2: first hearing implant which can stream mobile calls directly to

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Speaker 2: the implant devices.

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Speaker 1: And it also has automatic firmware updates like an iPhone

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Speaker 1: in your ear.

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Speaker 2: High margin product alert.

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Speaker 1: And while Cochlear is promising this will be big, investors

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Speaker 1: were still selling off Cochlear shares in the meantime.

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Speaker 2: So what is the key learning here?

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Speaker 1: Sales volume is vanity? Well, profit is sanity?

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Speaker 2: Does it way? Cochlear is growing implant volumes by about

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Speaker 2: ten percent, but a lot of that growth is coming

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Speaker 2: from emerging market.

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Speaker 1: Which typically offer lower prices per.

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Speaker 2: Unit, and that creates some margin pressure.

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Speaker 1: In other words, the cost of making a product doesn't

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Speaker 1: change much, but the price you can charge it goes down.

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Speaker 2: A company might grow sales overall, but end up making

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Speaker 2: less money if the mix tilts towards lower margin region.

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Speaker 1: That's why Cochlear's next move is all about the premium plate.

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Speaker 2: They're hoping that its fancy new product might shift the

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Speaker 2: product mix back towards premium product.

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Speaker 1: But for now, investors and turning the volume down.

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Speaker 2: For our third and final story, Satire, the online luxury

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Speaker 2: fashion retailer, has seen its chairs news dive thirty percent

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Speaker 2: after a slowdown in sales, profit, and US luxury purchases.

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Speaker 1: The US is too busy watching Trump and Musco head

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Speaker 1: to head. Vhan no time to buy luxury bags.

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Speaker 2: Tell me what well. Satire is the ASX listed luxury

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Speaker 2: marketplace selling all the big fashion houses.

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Speaker 1: We've been talking Gucci, Montclair, Dalmain, Fendy, Voluntin, o Versachi,

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Speaker 1: and a whole lot more.

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Speaker 2: It runs on a drop shipping model, meaning it doesn't

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Speaker 2: actually stock any of its items.

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Speaker 1: And be Man. While their market cap rocketed to over

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Speaker 1: one point eight bill during COVID, it's fair to say

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Speaker 1: it's now on the clearance rout.

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Speaker 2: We're talking a value of less than one hundred and

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Speaker 2: thirty mili.

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Speaker 1: But ben Man things got messy out because Setaire's revenue

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Speaker 1: rose just one point seven percent in the last eleven

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Speaker 1: months to the thirty first of May.

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Speaker 2: But most concerning was that it made a six point

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Speaker 2: nine million dollar loss in March and April this year.

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Speaker 1: Through on top of that a decline in their active

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Speaker 1: customers since March, and investors are very worried.

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Speaker 2: So what is the key learning here?

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Speaker 1: In e commerce? Retailers can pull a few key levers

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Speaker 1: to drive revenue, but every lever has a trader.

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Speaker 2: You can cut prices to get more sales and bring

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Speaker 2: in new customers, but if you do it.

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Speaker 1: Too often, your profits will vanish faster than a deal

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Speaker 1: bag at a sample sale.

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Speaker 2: Or you can hold prices steady and protect your margins,

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Speaker 2: but you.

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Speaker 1: Risk watching your customers disappear to cheaper pastures aka the czaras.

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Speaker 2: So in Seti's case, they've been pulling on all the

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Speaker 2: levers all at once and still not seeing results.

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Speaker 1: Yeah, it's been discounting heavily, but active users still fell

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Speaker 1: three and a half percent since March. So be man.

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Speaker 1: With poor performance and no Burkan sized miracle insight, it's

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Speaker 1: no surprise that Seti's share price has fallen by eighty

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Speaker 1: five percent since the start of this year alone. But Sam,

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Speaker 1: just a reminder. We'll be back on July ninth, after

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Speaker 1: a bit of a break of the pod, but there

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Speaker 1: is absolutely no break in the Flux app. We've got

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Speaker 1: a heap of new content and courses and videos rolled

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Speaker 1: out each and every day. To make sure to download

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Speaker 1: the app to check it out and stay on top

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Speaker 1: of your money.

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Speaker 2: Thanks for listening, and we'll see you on July than nine.