New Australian livestock financier vows to change the game

A “new breed” of financier has promised to shake up the livestock lending game by offering expanding WA sheep and cattle enterprises the flexibility it claims banks are unable to provide. Launched earlier this year as a non-bank financier, Legacy Livestock funds up to 100 per cent of sheep and cattle purchases without requiring a mortgage over the borrower’s real estate assets. Unlike traditional financiers, Legacy’s only registered security is over the livestock it funds. Asked why the Brisbane-based company would take such a gamble, chief executive and managing director Richard Brimblecombe said livestock appreciated in value when “run on good properties by good operators”. “Livestock that are managed well and run on good properties will increase in value as a consequence of either weight gain or the production of progeny,” he said. “So we’re funding something 100 per cent on day one, but it’s rapidly rising in value. “Even if there is a material reduction in the market price throughout the period of the trade that we’re financing, that weight gain performance, in almost every case, will exceed or more than offset any reduction in market price.” While some pastoral houses do offer 100 per cent funding, Mr Brimblecombe said borrowers typically had to be existing clients selling their livestock through that agent. “What we say to our customers is, we’re happy for you to deal with whatever livestock agent you want to deal with… and we don’t need to be involved in your marketing decisions,” he said. “We’re backing our customers’ expertise to make the right purchases and the right marketing decisions with their preferred marketing channel, and we leave those decisions up to our clients.” Mr Brimblecombe said Legacy aimed to address the disparity between the unique needs of the livestock industry and traditional lender structures. He said “progressive producers” looking to expand their operation were often unable to maximise profits because they could not obtain the right finance from traditional lenders. “We often find more progressive producers are pushing the boundaries in terms of what they’re able to borrow with a bank,” he said. “The bank’s happy to support them but may not be comfortable providing all the debt funding they need to fully stock that new property, or to buy the additional stock that they can now run following a property improvement program. “We can come in and complement that, and as a consequence of doing business with us, they can generate more profit, which improves their ability to service their bank debts.” Mr Brimblecombe said Legacy was “completely independent” and set up so as not to disrupt existing relationships clients had with their banks. He said the company was particularly interested in WA’s south west, where production intensity was high, with well-established feedlot markets and backgrounding operations. “That area is really attractive to us because we know there are a lot of very good quality producers there, who already have a proven track record in successfully trading livestock,” Mr Brimblecombe said. “What we can do is bring some capital to the table to help them make the most of the productive capacity of their property.” Before launching Legacy, Mr Brimblecombe was chief executive of the North Australian Pastoral Company, which owns about 6.5 million hectares of pastoral country and is one of the nation’s largest cattle producers. He said Legacy’s founding team, including head of credit Andrew Moyes, had extensive experience in the agriculture sector. “Andrew’s had about 26-years’ experience with the National Australia Bank in a variety of roles, and he owns his own cattle production enterprise in northern New South Wales,” Mr Brimblecombe said. “It’s very unusual for a financier to have a senior credit person who also has a direct interest in the industry. “He has a really good understanding of the challenges and a really hands on approach to working with clients and coming up with innovative solutions for them.”