| Eddy Groves | |
|---|---|
| Born | 16 June 1966 |
| Occupation | Founder, Chief Executive Officer |
| Board member of | ABC Learning |
Edmund Stuart "Eddy" Groves (born 16 June 1966) is an Australian businessman, founder and former Chief Executive Officer of ABC Learning, once one of Australia's largest companies and one of the world's biggest childcare providers prior to going into administration.
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Eddy Groves was born in Durban, South Africa to a soldier and a schoolteacher. The family returned to Canada in late 1966. A further relocation found the family on the West Coast (Victoria, British Columbia) in July 1968. Eddy arrived in Australia by 1970 and settled in Queensland, Australia.[1]
He was educated at Padua College.[2]
After leaving school, he enrolled at university in a business degree, but left half way through, eager to engage in business rather than learn about it, and got his first job as a bank clerk with the ANZ.[3] Later he became a milkman for Paul's Milk in Brisbane. Armed with a loan from his wife's father he bought a distributorship when he was nineteen years old which was the start of his business career. He expanded his milk distribution business to the point where his company Quantum Food is now the biggest distributor of milk in Queensland.[2]
In 1985, at the age of nineteen, Groves married Le Neve, with whom he has two daughters. The couple split in the late 1990s leaving his wife to care for the two children. His wife is suing her former husband for "unjustly enriching himself" while he was in control of ABC.[4] Groves left ABC with a multi-billion dollar debt amidst allegations of poor financial management and related party financial dealings.
In 1988, Groves and his subsequently estranged wife, Le Neve, opened a childcare centre in suburban Brisbane, having previously concluded that childcare was a universally "needed service" much like milk distribution. Run as a franchise model, their centres quickly became successful, expanded quickly, with bank finance from St George Bank of $20 million by 1993 and listing on the Australian Stock Exchange in 2001. They both held a 14.9% share in the company worth $2.5 billion at its peak, making Eddy Groves one of Australia's richest people at the time, according to Business Review Weekly.[1]
However, in February 2008, with the share price falling rapidly, both Groves and his wife had to sell their entire shareholdings in the company because of margin calls by banks who had lent against the value of the shares. The fall in the share price was caused by a 42 per cent fall in net profit, and rumours that the company was in default of its lending covenants.[5]
Even though Mr Groves stated to the ASX that ABC had complied with its financial obligations, there was concern that several directors had sold shares in the days leading up to the announcement, before the price fell, and that Mr Groves had not fully revealed the effect that the stock losses would have on the business through the effect of margin calls by lending partners. At the end of February 2008, the ASX was reported to be watching activity closely.[6]
Groves and his wife left the company in September 2008.[7]
On the 6th November 2008, ABC Learning Centres Ltd voluntarily appointed administrators for the ABC Group.
As of 10 November 2008, Eddy Groves and ABC is estimated to owe the main banks in excess of $1B with the Federal Government appointing a forensic accountant to go over the books, due to incorrect financial reporting. The Federal Government has given ABC childcare financial security to keep operating to the end of December 2008. After this it will be seen whether the company will be closed or sold off.
In 1999, Groves purchased the Brisbane Bullets basketball team that competes in the National Basketball League competition. He restructured the organisation, he injected funds and caused the team to be much more successful. The team made the finals in the 2003/4 season.[8] He bought a stake in the Adelaide Arena in Adelaide in 2006 for $3.95 million, which houses the NBL team Adelaide 36ers.[9]
In April 2008 Groves announced that he was putting the Bullets on the market in order to "focus all [his] attention on ABC".[10] Although getting close to clinching a sale to another prominent Brisbane businessman at one stage, Groves failed to secure a buyer and the Brisbane Bullets folded later in the year.[11]
Due to his lavish lifestyle and love of expensive exotic sports cars (such as Lamborghinis), Groves is nicknamed "Fast Eddie".