This is what the Flux.
I'm Brett and I'm Justin and Monday, this seventeenth February, FLUXPAM Tomorrow is the big day.
The RBA will be making its big announcement on the cash rate. Get this one. Seventy three percent of experts surveyed by Finder are predicting a cash rate cut, including all four of the big four banks. If you don't mind, could save us one hundreds, possibly even thousands fee man.
And speaking of which, we are very excited. We have a big feature in the Flex app tomorrow doing a big deep dive on the RBA's decision. If it goes down, we'll explore why. If it stayed the same, we'll also do a deep dive on that. To make sure to check out the Flux app for all your insights on the big cash rate decision.
Three insightful stories today Jasi Boy, Let's do it for our first temple and Webster has seen it share price fly to an all time high after its revenue jump twenty four percent off the back of bathroom fixtures and couches.
Making the people wear couches online without sitting on them. Absolutely not for me. So what is going on here.
Well, Jessie Boy. Temple and Webster was founded in twenty eleven and listed on the ASX in twenty fifteen.
And it was a pretty chopy few years for them. Their share price dropped nearly seventy five percent in their first three months of listing.
But Temple and Webster has weathered the storm since then and grown to become the largest online furniture retailer in Australia.
In fact, they made it sells more than two hundred thousand products.
Now, Temple and Webster have announced that their sales have risen by twenty four percent for the past six.
Months, largely thanks to a big increase in purchases of couches and of course those bathroom fixtures you always talk about.
Yep, that's me. And as a result, Temple and Webster's share price has jumped more than fifty percent for the last twelve months.
And the man, of course, that's thanks to the increasing sales, but more importantly it's thanks to their increase in profit margin.
Oh you went there, juzzy voice. I'm wondering what is the key learning?
A profit margin is how much profit a company keeps after covering all its costs.
And in the retail industry, profit margins are notoriously tight.
Like supermarkets that often just make a few cents on every dollar.
And Temple and Webster pulled off a profit mark or four point two percent in the last six month.
Which is way above their expected margin of one to three percent.
And growing margin means they're not just selling more stuff, they're making more money from what they sell.
That might be cutting costs out of their goods.
It might be getting more efficient with something like AI for their customer service as they claim to be doing.
Or charging higher prices without losing customers.
And in a sector where margins are often raiser thin, even small improvements can become significant gains.
Yeap. For our second story, seven West Media has seen its worst ever half year results as it tries to transition away from its free to air TV and newspapers traditional media companies in a world of hurt right now, tell me more? Okay? So seven West Media is the company behind the seven network as well as the West Australian newspaper group.
Yep, we're talking home and away my kitchen rules can't forget better homes and gardens.
But then, despite these banger shows. Seven West Media has struggled over the past twelve months.
That's because of a major softening of the TV advertising market this year.
Yeah. As a result, seven West Media saw their net profit drop sixty eight percent to just under eighteen million dollars for the six months to December thirty one.
Don't forget the revenue fell by more than six percent.
But the man, there was a little peep, a little squizz of good news.
Oh what little nugget do you have for me? Does you? Boy?
Well? Seven increased its AD share to nearly forty four percent of the whole TV ad market.
The problem is that this is a growing share of a declining market.
But despite all of this, seven West media share price actually jumped because it's focus on competing in the BVOD space.
Interesting, So what is the key learning here?
Broadcaster Video on Demand or b VOD is the name of the service that allows viewers to access TV content from traditional broadcasters online.
We'd be talking seven plus nine now ten play sps on demand, ABC iView are.
You rilling them all off? B Man Expert and BVOD is fast becoming some of the hottest property in the AUSSI ADS market.
Firstly, viewers love it because it's free, unlike streaming service rivals.
Secondly, it means you don't need to be in front of your TV at seven pm sharp to catch Irene on Home and.
Away Jazi Boys Irene still going around, I believe so. And Thirdly, advertisers love it because it's a cheaper way to target your audience with much better analytics and be man.
It's fair to say that seven West Media and its competitors are investing heavily in BVOD for the future for good reason.
In twenty twenty four, TV revenue was down nine and a half percent year on.
Year, whereas in the first half of twenty twenty four BVOD revenue jump nearly fourteen.
Percent and with nearly fourteen million b VOD viewers on seven plus, this is becoming a key part of seven West story. For our third and final story, Treasury Wine Estates, the wine giant has taken its lower priced wine brands off the sale slash divestment market after failing to find a buyer.
Talk about a little one eighty year b man. So what is going on?
Treasury Wine Estates is the ASX listed wine maker behind some big brands that are sold around the world.
We'd be talking Squealing Pig, Nineteen Crimes, pepper Jack, but jazz Boy.
You cannot leave out Treasury's Golden Goose. It's cash cow, it's gravy train, and it's the biggest money spinner. I'm talking penfolds.
Very true. But be man, let me tell you one thing. They also own a heap of cheaper brands like Wolf Blast, Linderman's, Yellow Glen, and Blossom Hill, as well.
Cheap Alert and Juzzy Boy. In August last year, Treasury announced plans to sell the lower priced brand portfolio.
That's because interest in cheap wine has been declining and the margins are pretty thin.
But now Treasury has announced it won't be selling the cheap brands anymore.
And that's because it couldn't find a buyer at the price they wanted.
Apparently they only received low ball offers.
So now they're only up to it and accepting that it's their own responsibility to maintain these brands.
But given these brands aren't part of the broader growth story, you've got to imagine these brands will just continue to decline further and further and further.
So true, So what is the key learning here?
A failed sale can be worse than no sale at all.
Yeah, announcing that a brand or a business is up for sale only to get zero decent offers can be a pretty bad look.
Makes people wonder what's wrong with that asset. It can spook investers as well, and just boy, it can even leave employees and customers feeling a little uneasy about the future of the company or those brands.
In fact, be Man Treasuries already written down the value of these brands on their books by three hundred and fifty four.
Million dollars and still could not find a buyer and be Man.
Because of these potentially negative impacts, companies often prefer to negotiate sales confidentially and.
Only make public announcements once a deal is done.
But now Treasury Win needs to get back to work with these underperforming brands and hope they can sell a lot of Blossom Hill.
See.
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