Xero’s full-year profit has jumped 30% as it grows its user base…but uses a simple method to grow revenue - jack up its pricing.
Burberry, one of the world’s biggest luxury brands, is planning to cut one fifth of its global workforce after a £75 million loss.
Warner Bros Discovery is backtracking on ‘Max’ branding for its streaming service…with HBO back in the spotlight.
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Episode Transcript
This is what the Flux. I'm bred and I'm justin
and it's Monday, the nineteenth of May.
Speaker 2 (00:09):
Does the boy ever had Siri but into your convo
like an uninvited guest all the time, then you might
be entitled to some cash from Apple. It's part of
a ninety five million US dollar settlement from a class
action claiming that Series been a bit too nosy. Siria
has allegedly been eavesdropping on private chats after accidental activations.
(00:30):
But don't go planning your early retirement.
Speaker 1 (00:32):
Just yeah.
Speaker 2 (00:32):
If this money was split between the one point four
billion Apple customers globally, we'd be looking at something like
seven cents each.
Speaker 1 (00:41):
Better than nothing. Be man, I'll take it me too.
Thinking of getting money back from providers this month in
the Flex Academy, it's all about getting a better deal
from your bank, utilities, provider, and lender as well, because
let me tell you one thing, fox Am, they are
not treating you right and you deserve better. So in
this Academy, we're going to teach you how to stand
up for yourself and save some serious cash. Make sure
to download the Flux app and check out the Academy
(01:01):
this month.
Speaker 2 (01:02):
Three market worthy stories today, Juzzy boy, let's do it
for our first. Zero's full year profit jump thirty percent
as it grows its user base. But the company uses
a simple method to grow.
Speaker 1 (01:13):
Nothing like payroll and bass statements to get your heart racing. DMan,
so more so.
Speaker 2 (01:17):
Zero with an X is the accounting software that was
created in New Zealand in two thousand and six.
Speaker 1 (01:22):
One of the oga accounting platforms to launch in the cloud.
Speaker 2 (01:25):
While the Noyobs and the Quickens of the world were
still malfunctioning on scratched CD ROMs.
Speaker 1 (01:31):
And Zero's grown from a humble New Zealand based company
to a global accounting giant with over four point four
million subscribers.
Speaker 2 (01:38):
And now Zero has trumpeted its revenue for the full
year which ended in March.
Speaker 1 (01:42):
YEP saw its revenue increased by twenty three percent to
one point nine billion dollars.
Speaker 2 (01:46):
But it was Zero's net profit after tax or NPAT
that really got investors licking their lips. It was up
thirty percent.
Speaker 1 (01:52):
And be man, what was their secret source for this?
Speaker 2 (01:55):
Well, juzyboy, it was not Ai, and it wasn't a
wild acquisition, just good old fashion price hikes.
Speaker 1 (02:01):
Yep, Zero jacked up the price of their services, which
meant the average revenue per user roads by fifteen percent.
Speaker 2 (02:06):
And despite this, the customer base still grew by six percent.
Speaker 1 (02:10):
But being maned with its strong and very sticky product,
it seems that even its increased pricing isn't holding back
customers these days.
Speaker 2 (02:17):
Oh that's an interesting call, So what's the key learning here?
Speaker 1 (02:19):
Product stickiness refers to how likely customers are to keep
using a product over time and how difficult it is
for them to stop.
Speaker 2 (02:26):
A sticky product is a product that becomes so embedded
in your life or your business that you are very
unlikely to switch away from it.
Speaker 1 (02:34):
Even when alternatives exist.
Speaker 2 (02:35):
All the prices go up, and Jason Boy Accounting software
is one of the stickiest products out there.
Speaker 1 (02:40):
Once a business is set up on a platform like Zero,
switching to a new one is a massive pain in
the backside.
Speaker 2 (02:45):
You're going to move over all of your data, retrain staff,
change workflows.
Speaker 1 (02:50):
And that's why Zero has been able to push through
a fifteen percent price hike and still go with subscriber
base by six percent.
Speaker 2 (02:55):
Because most businesses would rather absorb the cost than go
through the hassle of switching for.
Speaker 1 (03:01):
Our second story. Birbery, one of the world's biggest luxury brands,
is planning to cut one fifth of its global workforce
after a seventy five million pound loss. Birbury is making
some brutal wardrobe changes.
Speaker 2 (03:13):
Tell me more so.
Speaker 1 (03:14):
Birbury's, the British luxury fashion house, was founded in eighteen
fifty six yep. Nearly one hundred and seventy years.
Speaker 2 (03:20):
Ago, best known for its trench coats and that beig
check pattern. I understand yep.
Speaker 1 (03:25):
Fact man. Well, many luxury brands have moved production off shore.
Berbery's trench coats are still made in Castleford at Yorkshire. Wow.
Speaker 2 (03:33):
That is very insightful, jazy boy. And the past twelve
months have been somewhat challenging for Birbery yep.
Speaker 1 (03:38):
Its revenue dropped seventeen percent to two point four to
six billion pounds.
Speaker 2 (03:42):
Even worse than that, it went from a two hundred
and seventy million pound profit to a seventy five million
pound net lost.
Speaker 1 (03:48):
So now Birbery's pulling out the shears as a plans
to cut seventeen hundred jobs globally.
Speaker 2 (03:53):
We're talking nearly a fifth of its workforce, and.
Speaker 1 (03:56):
After the back of this newsbee Man Birbury shares actually
dropped seventeen percent on the day of the announcement.
Speaker 2 (04:01):
Because luxury brands need to respond to market conditions, So what.
Speaker 1 (04:05):
Is the key learning here?
Speaker 2 (04:06):
Even prestige brands feel the pinch when consumer sentiment drops.
Speaker 1 (04:11):
Yeah, luxury brands often get painted as recession proof, but
be Man, let me tell you one thing is not always.
Speaker 2 (04:16):
The case, and Juzy Boy Burbery is especially feeling the
pinch in markets like Chaina.
Speaker 1 (04:20):
Chinese shoppers account for thirty five to forty percent of
global luxury spending, and.
Speaker 2 (04:25):
When those shoppers pull back, Burbery really feels it.
Speaker 1 (04:27):
In fact, be Man, over the last twelve months, Burbery
has suffered a fifteen percent fall in Chinese sales.
Speaker 2 (04:33):
And Joesyboy Berbery is not alone in the fashion trenches.
Speaker 1 (04:37):
Nope.
Speaker 2 (04:37):
Beaucy sales dropped twenty five percent in the most recent quarter,
while Saint Laurent experienced a nine percent decrease in sales
and Balenciaga saw a seven percent decline.
Speaker 1 (04:45):
So be Man. Even if your brand is strong, you
cannot ignore the macro conditions. For our third and final story,
Warner Brothers Discovery is backtracking on its Max branding for
its streaming service, and HBO is back in the spotlight.
Speaker 2 (05:00):
Max experiment is over. HBO is back on the billing.
What is the story?
Speaker 1 (05:04):
So Man, Warner Brothers Discovery formed after a forty three
billion US dollar mega merger in twenty twenty two between
Watermedia and Discovery.
Speaker 2 (05:13):
And in twenty twenty three they ditched the HBO from
HBO Max to create a new broader brand and it
went by the name of Max and b Man.
Speaker 1 (05:21):
At the time, they believe that the HBO brand meant prestige.
Speaker 2 (05:25):
They wanted to broaden the appeal because it now included
lifestyle content from Discovery.
Speaker 1 (05:29):
The problem was, b Man, nobody asked for this change.
Speaker 2 (05:32):
Let's just say it didn't max out in terms of
brand recognition.
Speaker 1 (05:36):
In fact, it just confused people a lot.
Speaker 2 (05:38):
So while HBO was out there winning Emmys, Max felt
like a vague, distant cousin.
Speaker 1 (05:43):
So now Warner Brothers Discovery is reversing the decision and
it's going back to its streaming name HBO Max. This
summer nothing like a bit of corporate backtracking after a
major misstep.
Speaker 2 (05:53):
It's pretty simple. You don't mess with a quality brand
name that consumers are familiar with.
Speaker 1 (05:58):
Aha, So what is the key learning here?
Speaker 2 (06:00):
Brand familiarity is more than just recognizing a name. It's
a psychological shortcut.
Speaker 1 (06:05):
When consumers hear the HBO name, they think about premium content.
Speaker 2 (06:09):
The issue is that the pivot to Max diluted that
prestige and made.
Speaker 1 (06:13):
The Max offering feel a lot more generic and Jazi boy.
Speaker 2 (06:16):
When you're competing in a crowded streaming market with Netflix
and Prime and Disney Plus, you need to have a
big differentiator, and.
Speaker 1 (06:23):
Let's just be honest, Max just wasn't doing it.
Speaker 2 (06:25):
It doesn't help that Warner Brothers Discovery share price was
down fifteen percent since the start of this year either
Flux app.
Speaker 1 (06:31):
If you're getting bills every month and wondering did that
go up since last year, well, the likelihood is that
it did because every year you are paying a loyalty
task on your electricity bill, on your gas bill, on
your internet bill as well. We cover it all in
the Flux Academy, including a script that you can use
to negotiate to get a better deal with your providers.
To make sure to download the Flux app and check
out the Academy this month.
Speaker 2 (06:52):
Thanks for listening, and we'll see you on Wednesday.
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