Vocus Class action
Potential Class Action Against Vocus Group Limited (ASX:VOC)
If you purchased Vocus shares between 29 November 2016 and 1 May 2017 you may be eligible to join a proposed class action against Vocus.
ACA Lawyers is investigating a proposed shareholder class action on behalf of aggrieved Vocus investors who suffered losses arising from alleged continuous disclosure breaches and misleading or deceptive conduct by Vocus. The proposed class action will be commenced subject to the satisfactory completion of investigations into the alleged misconduct and sufficient interest from affected Vocus shareholders.
If you would like further information on the class action please register below. Registration is confidential and free. There is no obligation to participate in the class action.
Background to the allegations
Vocus share price movements during the relevant period
- The proposed class action arises from a trading update provided to its shareholders on 2 May 2017 (the 2 May 2017 Downgrade), in which Vocus downgraded its FY17 earnings guidance previously provided at its AGM on 29 November 2016.
- We are investigating whether Vocus had a reasonable basis for providing its FY17 earnings guidance on 29 November 2016, or alternatively that it failed to inform the market as and when it became aware, or ought to have become aware, that its FY17 earnings would be lower than forecast on 29 November 2016.
- We are also investigating Vocus’s conduct in the period between the release of its FY16 results on 23 August 2017 and the provision of earnings guidance on 29 November 2016. Depending on the outcome of those investigations, investors who purchased shares between 23 August 2016 and 29 November 2016 may be eligible to join the proposed class action.
- The effect of the 2 May 2017 Downgrade was a:
(a) $100 million reduction to FY17 forecast revenue;
(b) $55 million to $85 million reduction to FY17 forecast underlying EBITDA; and
(c) $40 million to $55 million reduction to FY17 forecast NPAT.
In the 2 May 2017 Downgrade, Vocus stated that as a result of an accounting review, revenue for a number of large contracts would be recognised in future periods rather than being recognised as an upfront contribution in FY17. This change accounted for $40 million of the reduction to FY17 forecast revenue and $33 million of the reduction to FY17 forecast underlying EBITDA.
Following the 2 May 2017 downgrade, Vocus’s share price fell by 27% ($0.91 per share), reducing its market value by ~$561 million.
As a result of our preliminary investigations, we have formed the view that:
(a) Vocus’s previous earnings guidance provided on 29 November 2016 and restated on 21 February 2017 may have been misleading;
(b) Vocus may have been aware of the information leading to the downgrade earlier than the actual date of disclosure;
(c) Vocus may have breached its continuous disclosure obligations and/or engaged in misleading or deceptive misconduct by failing to disclose that it had incorrectly recognised revenue in in its FY17 earnings guidance prior to 2 May 2017.
The investigation is financed by funds advised by Harbour Litigation Funding Limited which operates globally from its offices in Hong Kong and London.