Proposed Class Action – Vocus Group

ICP, which is uniquely focused exclusively on ASX shareholder claims, is proposing a shareholder class action to be run by Slater & Gordon Lawyers on behalf of aggrieved Vocus investors who suffered losses due to alleged breaches of disclosure obligations and misleading and deceptive conduct, subject to sufficient interest from affected Vocus shareholders.

Background to the allegations

Vocus is one of Australia’s largest telecommunications companies, and has traded on the ASX since 2010. Vocus held its Annual General Meeting on 29 November 2016, and provided guidance for FY17 as follows:

  • Revenue: $1.9bn
  • EBITDA: $430m – $450m;
  • Underlying NPAT: $205m – $215m.

On 22 February 2017 Vocus re-iterated the FY17 guidance and expressed confidence in its ability to deliver. On 2 May 2017, Vocus downgraded its FY17 guidance as follows:

  • Revenue: $1.8bn
  • EBITDA: $365m – $375m;
  • Underlying NPAT: $160m – $165m,

(together, the FY17 Downgrade). The company reported that the FY17 Downgrade was a result of the following factors:

  • impact of lower than forecast billings combined with an increase in service delivery headcount in the Enterprise & Wholesale division”;
  • higher than forecast expenses in Group Services, primarily technology”;
  • the revenue associated with a number of large projects included in the 2H17 forecast would be predominately recognised in future periods following an accounting review;
  • lower earnings than forecast from the Mass Market energy business following the volatility created by extreme weather events in 3QFY17”;
  • other trading variances across the Group”.
Nature of Claim

The claim is based on allegations that Vocus is likely to have been aware of some of the factors noted in the FY17 Downgrade back from at least 29 November 2016, consequently misleading the market with its FY17 Guidance. In particular, that:

  • on and from 29 November 2016, Vocus engaged in misleading or deceptive conduct, in contravention of the Corporations Act 2001 (Cth), by providing the FY17 Guidance when it did not have reasonable grounds for doing so; and
  • from 29 November 2016 onward, Vocus breached its obligations of continuous disclosure, in contravention of the Corporations Act 2001, by failing to disclose that it would not achieve the FY17 Guidance.
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