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Speaker 1: This is what the Flux.

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Speaker 2: I'm Brett and I'm Justin and it's Monday, the twenty

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Speaker 2: ninth to September.

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Speaker 1: Josey Boy. Instagram has hit the big leagues. I'm talking

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Speaker 1: three billion monthly users that my friend is nearly half

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Speaker 1: the planet. Doom's calling and sending each other memes about work,

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Speaker 1: that they're avoiding.

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Speaker 2: A lot of people wasting their time. Be man, uh

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Speaker 2: huh flex Amm. We went to the Networth Accelerate Summit

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Speaker 2: a couple of weeks ago and asked advisors some of

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Speaker 2: their biggest money myths and we had some great answers

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Speaker 2: that are all captured in the Flux apps. If you

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Speaker 2: want to learn some of the biggest money myths from

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Speaker 2: some of the biggest financial advisors in Australia, make sure

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Speaker 2: to download the Flux app and check out our Asking

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Speaker 2: Advisor videos.

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Speaker 1: Three splendid stories today, Juzzy Boy, let's do it for

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Speaker 1: our first. Optus has been slapped with a big, big

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Speaker 1: fine for four years of unethical sales conduct.

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Speaker 2: Another fine for optis b man, tell me what is

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Speaker 2: going on down at Olan?

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Speaker 1: Yeah? Well, Optus was founded back in nineteen ninety two.

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Speaker 1: Is Australia's second largest telco company and his big coming

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Speaker 1: the fine capital of Australia.

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Speaker 2: We're talking more than ten million Aussies who use Optis

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Speaker 2: for phone and internet coverage and Jauziboy. Since twenty eleven,

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Speaker 2: Optus has been owned by the Singaporean behemoth Singtel. But

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Speaker 2: over the last couple of years, Optus has developed a

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Speaker 2: bit of a reputation problem.

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Speaker 1: First the mega cyber attack that leaked almost ten million

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Speaker 1: customer details.

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Speaker 2: Then a nationwide outage that left people unable to call

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Speaker 2: Triple zero.

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Speaker 1: And now the a Triple C has slapped Optus with

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Speaker 1: a one hundred million dollar fine for another issue, yeap.

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Speaker 2: Optus has admitted to inappropriate sales practices between twenty nineteen

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Speaker 2: and twenty twenty three that affected hundreds of vulnerable customers.

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Speaker 1: We're talking questionable debt collection practices.

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Speaker 2: We're talking misleading and deceptive conduct.

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Speaker 1: Yes, we're talking failing to explain the terms and conditions

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Speaker 1: of contracts.

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Speaker 2: And failing to conduct coverage checks.

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Speaker 1: Now, Jazzi boy. In some cases, people were even sold

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Speaker 1: plans when they lived in areas where Optus reception was

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Speaker 1: not available.

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Speaker 2: Wow, So it's no wonder the a Triple C slapped

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Speaker 2: Optus with a big fine and he's now questioning whether

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Speaker 2: Optis deserves its golden ticket, its carrier license.

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Speaker 1: Ooh, you went there, jazzy boy. So what is the

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Speaker 1: key learning here?

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Speaker 2: A telco carrier license is a legal permit that allows

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Speaker 2: companies like OPTAs to build and operate telco networks across Australia.

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Speaker 1: Currently, less than ten percent of Australian telcos have this license,

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Speaker 1: which gives opter some serious market power. But having this

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Speaker 1: license comes with responsibilities.

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Speaker 2: Like providing safe and reliable services, protecting customer data, supporting

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Speaker 2: emergency calls, and of course treating consumers fairly as well.

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Speaker 1: And it's pretty clear to see that Optus has been

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Speaker 1: falling short of these responsibilities recently.

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Speaker 2: And be Man, in the past we've seen companies lose

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Speaker 2: their licenses, like when The Star had its casino license

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Speaker 2: suspended by the New South Wales Independent Casino Commission, and

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Speaker 2: this was.

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Speaker 1: A very heavy blow to their operations, their reputation, investor confidence.

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Speaker 2: So be Man, Optus having their carrier license put to

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Speaker 2: question is pretty serious business.

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Speaker 1: And you can bet your bottom dollar they won't be

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Speaker 1: taking this license for granted for much longer for.

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Speaker 2: Our second story, Premier Investments has booked a juicy profit boost.

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Speaker 2: But if you peel back the layers, the numbers are

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Speaker 2: looking a little bit more sketchy.

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Speaker 1: Kids just aren't digging Smiggle anymore? Is that right? What

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Speaker 1: is going on here?

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Speaker 2: So? Premier Investments is the retail parent company behind brands

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Speaker 2: like Peter Alexander and Smiggle.

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Speaker 1: Previously owned brands like Dotty Portman's JJ's.

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Speaker 2: Until they bundle them up and sold them as appol

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Speaker 2: brands to Mya for nearly nine hundred million bucks in shares.

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Speaker 1: And now Juzzy Boy. Premier has announced a full year

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Speaker 1: profit jump of thirty one percent two three hundred and

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Speaker 1: thirty eight million bucks.

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Speaker 2: Sounds pretty good if you asked, maybe, man, it does.

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Speaker 1: But before you pop the smell confetti Juzzy Boy, there's

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Speaker 1: a fair bit of pain under the covers here.

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Speaker 2: You see, excluding the sale of apparel brands, Premier's profit

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Speaker 2: from its continuing businesses actually fell twenty two and a half.

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Speaker 1: Percent, down to one hundred and forty four mil, including

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Speaker 1: Sniggle sales, which dropped nearly eleven percent. The winners were

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Speaker 1: Peter Alexander and Premier steak in Brevel, but jusey boy,

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Speaker 1: that still wasn't enough to boost their underlying earnings.

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Speaker 2: So true, So what is the key learning here?

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Speaker 1: When analyzing company results, it's crucial to separate one off

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Speaker 1: gains from recurring earnings.

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Speaker 2: One off gains can come from selling assets or restructuring

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Speaker 2: or revaluing their investments.

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Speaker 1: They give profits a short term boost, but don't tell

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Speaker 1: you how much the company's ability to generate income year

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Speaker 1: after year has changed. In Premier's case, the sale to

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Speaker 1: Maya gave them a big one time sugar hit.

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Speaker 2: And that pushed their statutory profit high.

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Speaker 1: But underneath Smiggles losing it, Sparkle and.

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Speaker 2: Peter Alexander can't carry this whole sleepover.

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Speaker 1: This is why analysts often look at two sets of results.

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Speaker 2: Statutory profit, which is the official figure including one offs.

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Speaker 1: And underlying profit, which is adjusted to reflect core operations.

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Speaker 2: Because at the end of the day, it's not about

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Speaker 2: the one off windfalls.

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Speaker 1: Now, it's about whether your slippers and notepads can keep

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Speaker 1: ringing the till year in, year out.

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Speaker 2: For our third and final story, Ali Baba's share price

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Speaker 2: rocketed eight percent higher after it promises to invest even

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Speaker 2: more billions into AI.

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Speaker 1: Ali Baba comes out with all guns are blazon and

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Speaker 1: investors are digging it. Tell me more.

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Speaker 2: Ali Baba launched in China in nineteen ninety nine and

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Speaker 2: has grown into a four hundred billion US dollar behemoth.

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Speaker 1: It's got Ali Baba dot Com, AliExpress, Ali Baba Cloud,

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Speaker 1: Chinese online shopping website, Tawboo gaming platforms, what else, jesse

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Speaker 1: Boy long form video platforms.

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Speaker 2: They've even got a logistics business as far as I know, yep.

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Speaker 2: It's often called the Amazon of China.

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Speaker 1: That's because both companies started off as e commerce platforms

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Speaker 1: but evolved into much much bigger technology companies.

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Speaker 2: And now Ali Baba CEO announced they'll expand its fifty

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Speaker 2: three billion US dollar AI investment.

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Speaker 1: Plan, make it rain Ali Baba and.

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Speaker 2: To show they weren't kidding b Man, Ali Baba also

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Speaker 2: announced a key partnership with Nvidia.

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Speaker 1: What is AI without an Nvidia partnership?

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Speaker 2: What is it true? Check? On top of that, Ali

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Speaker 2: Baba launched its most powerful AI model yet Now.

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Speaker 1: Clearly investors like this feisty and aggressive side of Ali

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Speaker 1: Baba investing heavily into capital expenditure.

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Speaker 2: Share price jumped eight percent off the back of this

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Speaker 2: big announcement.

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Speaker 1: Yeah, so what is the key learning here?

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Speaker 2: Capital expenditure or CAPEX and operating expenditure OPX are two

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Speaker 2: very different ways for a company to invest in their future.

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Speaker 1: One build your empire, the other keeps the lights on.

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Speaker 2: CAPEX refers to big one of investments in physical or

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Speaker 2: digital infrastructure.

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Speaker 1: Think data centers or servers, or building proprietary AI models.

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Speaker 2: OPEX on the other hand, that cover what's the ongoing

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Speaker 2: costs of running the business.

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Speaker 1: You know, keeping the lights on, Think salaries to grant,

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Speaker 1: think electricity.

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Speaker 2: And for big tech companies be then big CAPEX budgets

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Speaker 2: have become crucial to scaling the AI capability.

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Speaker 1: In fact, Amazon, Google, Microsoft, Meta, they all have plans

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Speaker 1: to spend a combined at three hundred and sixty four

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Speaker 1: billion US dollars on AI and that's just for twenty

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Speaker 1: twenty five alone.

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Speaker 2: All part of their plan to gain dominance over each

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Speaker 2: other in the AI gold rush.

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Speaker 1: For these upfront costs can weigh heavily on profitability, especially

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Speaker 1: when the payoff may take years.

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Speaker 2: But right now b Man investors believe that AI spending

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Speaker 2: is crucial to the survival of tech.

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Speaker 1: Companies and clearly investors like the ambition of Ali Baba

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Speaker 1: be Man.

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Speaker 2: You want to learn more about some of the biggest

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Speaker 2: money myths in Australia from some of the top financial

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Speaker 2: advisor in Australia, make sure to download the Flux app

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Speaker 2: and check out our Asking Advisor series.

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Speaker 1: Thanks for listening and we'll see you on Wednesday.