ASX Shareholder Claims

Wellard

Class Action – Wellard Limited (ASX:WLD)

ICP has agreed to fund a shareholder class action to be run by Quinn Emanuel Lawyers, on behalf of aggrieved Wellard investors.

Please note – this claim has been structured as a closed class action. This means that all WLD shareholders that purchased WLD shares during the Claim Period and suffered loss due to the price-adverse non-disclosed information but have not signed agreements with ICP and QE before the filing of the Class Action (being Monday 9 March 2020) with the Court, are not defined as class members. Only WLD shareholders that sign before and up to the filing date and have suffered applicable loss are class members, according to the definition of a class member as defined in the pleadings filed with the Court.

We may apply to the Court to have any “late signers” included. Inclusion will therefore be subject to Court approval.

 

Background

On 20 November 2015 Wellard lodged its prospectus which contained a short 8-month forecast for the balance FY16. This forecast implied gross profit margins would be similar to FY14 and FY15.

In contrast to Wellard’s half year result, on 16 May 2016 (25 days prior to Wellard’s 10 June 2016 announcement), Elders released its half year results for the 6-month period ended 31 March 2016, including:

  • a loss of -$2.9m compared to a $4.7m profit in the prior corresponding period; and
  • increased competition and higher supply costs continuing to put pressure on earning’s and in particular Vietnam exports.

On 10 June 2016, Wellard revised NPAT guidance lower due to:

  • ship scheduling changes; and
  • margin compression created by unexpectedly high record cattle prices in Australia.

By this time, Wellard’s stock price had declined by -$0.91 or -65%.

Claim Overview

By no later than 20 November 2015, and during the Relevant Period:

  • there was a significant upward trend in the price of Australian cattle in the Australian market compared with FY14 and FY15;
  • there was not a significant upward trend in the price of Australian cattle in Vietnamese and Indonesian markets compared with FY14 and FY15;
  • Wellard had a livestock marketing and export gross margin that was significantly less than 19.2 per cent to date for FY16;
  • it was likely that Wellard would have a livestock marketing and export gross margin that was significantly less than 19.2 per cent for FY16; and
  • it was likely that Wellard’s FY16 Pro Forma NPAT would be significantly less than $23 million, and/or would not involve growth from the FY15 Pro Forma NPAT of the Wellard Business,

(together, Non-Disclosed Material Information).

Class Members

Investors who acquired an interest:

  • in ordinary shares in Wellard Limited (Shares) during the period between 8 December 2015 and 31 August 2016 (inclusive) (Relevant Period); and/or
  • long exposure to the Shares by entering into equity swap confirmations in respect of the Shares during the Relevant Period (Equity Swaps); and
  • signed a funding agreement with ICP prior to 9 March 2020.