This is what the Flux.
I'm Brad Justin and it's Friday, the thirtieth of August.
Jusey boy. We've spoken about the rollercoaster ride that is Setire a lot over the past few months.
Now.
Setire has worn the market that its auditors have beil to sign off on their financial accounts. Apparently the situation is quote nuanced and ongoing, but not the best sign from a company that has already been doubted by many.
Very worrying signs. B Man sucks. Fam. It is Friday, and that means we are given away fifty bucks once again to the smartest Flux user. All we've got to do is download the Flux app, play quick Sticks and be the first to answer three questions correctly, and that money could be yours to start off the weekend. To make sure to download the app and have your noted patients turned on.
Three rip Snorter stories today. Juzzy boy, Let's do it for our first West farmers have seen its annual sales jump to more than forty four billion bucks, and it's putting a heap of praise on one particular business.
Surely it's came out, Surely it's came out. It's got to be came out, tell me more. Be man, well dyboy.
West Farmers is the WABA owner of some of the biggest name brands in Australian retail.
We'd be talking your bannings, your targets, your office works, your price lines, catches it, your silk, got laser clinics.
But Jasie boy. It also owns industrial and safety businesses, as well as chemicals and energy and fertilizer businesses.
Clean Heats, Yeah, Black hoods.
Now Jazzi Boy. West Farmers has announced its sales for the last financial year jumped by one point five percent to over forty four billion dollars and off.
The back of these sales, its delivered a tasty net profit of two point six billion baccarinis.
All right, Josi boy. So which of these retailers deliver the goods for good old Wessy's.
Well, no surprises here, but West Fharma CEO called came out the standout performer because it's profit jumped to get this twenty five percent to nearly one billion dollars.
And in particular it's home brand Ancho, which it now sells in Kmart and Target and to other retailers globally.
But began interestingly, West Farmers Chemicals, Energy and Fertilizers division got hit hard. It's earning film more than thirty four percent, largely because of lower commodity prices. But that is the benefit of having a diversified portfolio of businesses and brands.
So what's the key learning here.
Business diversification is a strategy that involves holding assets across different sectors to reduce your risk.
Now, West Farmers is a textbook example of this business diversification. Yep, it has department store retail like Kmart, Target Catch, It's got hardware retail that would be Bunning's office, and stationary retail. You've got office works making big things happen, and.
Even chemicals and energy, which we mentioned before.
And having this diverse portfolio helps West Farmers cushion the blow of a downturn in any single sector.
For example, the chemicals business plummeted, the Kmart's gyptastic products picked up the slack.
But jes it boy, there's also a flip side to this over diversification.
That's when companies diversified too much and they risk becoming a jack of all trades but really a master.
Of none looking at you, General Electric, which used to be the largest company in the United States, but it's found its fingers in way too many pies and has since split up into three separate companies. So the key is diversifying enough to spread risk, but staying focused on core strengths.
Yep. For our second story, Quantus has reported a sixteen percent drop in its annual profit in its first annual update since new CEO, Vanessa Hudson stepped in. Pretty sure if Quantus reported a profit jump like Calls, customers would be for human So what is the story here? We'll be men. Quantuses Australia's national airline carrier. It's also the third oldest airline in the world. Fun fact for you.
And for a better part of the pandemic, Quantus was consistently in the news for pretty much all the wrong reason.
We're talking mass layoffs, profiting off ghost flights and h POC.
Inquiry and a new CEO brought in with the hopes to turn Quantus's fate around.
And now be man. Quantus has brought in a two point one billion dollar profit, but this is a sixteen percent drop compared to last year.
And this one has come after Quantus amped up spending to settle some legal cases and really focus on building customer relationships. They also spent four hundred million baccarinis on a share buy back to keep investors happy. And just Boy, a big part of Quantus's narrative is that it's repairing itself and its customer relation.
And so it's new CEO's first earnings update was focused on cleaning up the damage caused by its previous management.
Interesting, so I'm wondering what is the key learning here.
When a new CEO steps in, they often get a free pass in their first few earnings updates.
Especially if that new CEO is replacing someone who is considered to have underperformed.
That means they can blame previous management for any poor results in the first earnings update.
Ah, yes, our profit drops sixteen percent.
Well, don't look at me, it was the last guy, then this way, b man. New CEOs can also justify making bowl and sometimes costly decisions as a way to reset the company.
And JOSEP Boy is not just Quantus, even old tab Corps. New CEO has just axed a turnaround strategy that was introduced by previous.
Management and written down more than five hundred million bucks worth of assets with the hope of resetting the business.
So Quantus's new CEO might be able to pinpop performance on the previous CEO for.
Now, but she'll be held accountable for a lot more when the next annual update comes around.
For our third and final story, in Vidia, the AI chip designer, exceeded its quarterly guidance on all the key metrics, but Jessie boy Its share price dropped more than seven percent.
Tough gig for InVideo investors always wanting more, so give me the chippy update.
So we know. In Video was founded in nineteen ninety three as a computer chip company mainly designing for video games. Whatever.
The last few years, in Videos become the chip behind many of the world's biggest tech companies who were hoping to get into AI.
Think Amazon, Meta, Microsoft, Alphabet. Its share price has increased by two nine hundred percent over the past five years.
And in Video skyrocketed to become the third most valuable company in the whole wide world.
Now, Dozzy Boy in Video CEO, strutted on stage in his leather jacket and reported the company's quarterly update. Yeap in Video's revenue for the previous quarter hit thirty billion US dollars. Now, this number was up sixteen percent on the previous quarter and one hundred and fifty four percent on this time last year. That all sounds pretty down good juzzy boy. So I'm wondering, just having a look over here, what the bananas happened to its share price?
Well, my friend, it dropped nearly seven percent off the back of this news.
Well, good news just isn't good enough for invideos investors.
So what is the key learning here?
Continually smashing your guidance can create almost too high expectation, you seeb Man.
When a company consistently smashes its revenue forecast, it sets a high bar for future.
Performance, which can be difficult to maintain over the long term. And does it wait the moment when in Video meets but doesn't significantly exceed expectations, That might be a signal to investors, a signal, well, a signal of the peak of the AI boom might be rearing its ugly head.
Flux Sam, if you can see yourself a bit of a business buff, then you need to test yourself with quick sticks. Our weekly gain every single Friday. It's three questions on business and finance, and the first person to answer correctly wins fifty bucks to kick off the weekend. Make sure you download the Flux app and have you aduications turned on.
Thanks for listening, and we'll see you on Monday.