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THE NEWS WRAP: Costco announces first Australian profit, major expansion plans
The Australian arm of discount warehouse chain Costco has declared its first profit, along with $50 million from its US parent to finance an aggressive expansion plan.
Since opening its first warehouse in Melbourne’s Docklands precinct in 2009, the retail chain has opened two more warehouses in Sydney and Canberra, and has doubled its annual revenue to $609.5 million. Its Melbourne and Sydney stores claim more than 100,000 members each.
The $50 million in additional equity is being used by the chain to help finance its second Victorian store in the outer-eastern Melbourne suburb of Ringwood.
ASIC slams Macquarie Group’s private wealth unit
Corporate regulator ASIC has slammed the Macquarie Group’s private wealth arm, Macquarie Equity, forcing the firm to acknowledge a series of serious compliance breaches.
According to The Australian, the breaches include client files not containing statements of advice, advisers failing to demonstrate a reasonable basis for advice provided to the client, poor client records, a lack of detail in advice documents, a lack of supporting documentation on files to determine if there was a reasonable basis for the advice provided to the client, and failing to provide sufficient evidence that clients were sophisticated investors.
The ASIC investigation follows an internal review in 2008 that reportedly showed 80% of its private client advisers were in breach of standards under the Financial Services Reform Act.
Former Rich Lister Eddy Groves declared bankrupt
Former Rich Lister, basketball team owner and childcare magnate Eddy Groves was declared bankrupt in an Adelaide court yesterday.
The Commonwealth Bank had been pursuing Groves for a $5 million loan he used to help finance the purchase of the Adelaide Arena.
Groves’ ABC Learning group collapsed in 2008 with creditors owed around $1.6 billion, forcing the sale of 1,200 childcare centres.
The Dow Jones Industrial Average added 0.55% to 13,958.80. The Aussie dollar was up to US104.62 cents.