Suit alleges Billabong gave 'lacking' earnings guidance
Surfersvillage Global Surf News, 6 March, 2014 - Slater & Gordon has today announced that it is preparing a class action against Billabong International Limited (ASX.BBG) on instructions from hundreds of Australian and international investors. In a statement released this morning, Slater & Gordon Senior Associate Odette McDonald said the firm would seek compensation on behalf of investors who contend that Billabong engaged in misleading and deceptive conduct and failed to comply with its continuous disclosure obligations.
The class action will allege that the surfwear, accessories and action sports apparel company gave earnings guidance to investors for the financial year 2012 that lacked reasonable grounds. On 19 August 2011, Billabong forecast that it would achieve strong earnings growth in financial year 2012, however a few months later, the board of the company withdrew that guidance and revealed that its earnings would suffer a substantial fall. As a result, Billabong’s share price dropped by more than 50 per cent in the days following.
“Our clients allege that Billabong misrepresented the assumptions on which the FY12 earnings growth guidance was based,” McDonald said in the statement.