By Patrick Avenell
SYDNEY, NSW: Clive Peeters managing director Greg Smith has told Current.com.au that he never feared the banks would call in debts, even during the worst of the company’s share price woes. He reported the publicly listed retail group has a great relationship with the National Australia Bank (NAB), and that it was even suggested that the company should borrow more to fund expansion.
“We’ve been with the NAB for 15 years, we’ve only ever had the one bank,” said Smith. “They know our business model well.
“Like all banks in [the last] 12 months, they’ve been more conservative and more questioning, but we meet with them quarterly, we submit figures to them monthly, so there’s no surprises in our relationship.”
Smith said that Clive Peeters’ concerted effort to reduce debts and costs was met with enthusiasm by his financial services provider.
“I think they’re very supporting of our new business plan, which has taken all this cost out of the business, and they’re very happy that we’re embarking on a program to get our debt down.”
Interestingly, Smith also reported that despite the group’s share price woes, the NAB advised Clive Peeters to borrow more money.
“It was only a year ago that the bank was suggesting to us that we were underborrowed and we needed to have more debt on our balance sheet and go on the expansion trail.
“At the time we felt it was about the reasonable levels of debt, but a lot has changed in that last 12 months, a view of what was reasonable a year ago compared to today is totally different, so we’re glad we didn’t go and borrow any money at the time and now we think that over the next one-to-two years we want to make some serious inroads into that debt and get it down to a position where no matter what the time brings in the year ahead, you don’t have to worry about it.”