Treasury Wine Estates (TWE) has acknowledged the class action it has been served by Slater and Gordon in the Supreme Court of Victoria.
The proceeding has been filed on behalf of shareholders who acquired an interest in TWE shares between 14 February 2019 and 28 January 2020, before the company issued a revised earnings expectation.
In a statement about the action, Slater and Gordon said: “Slater and Gordon, as instructed by the lead plaintiff, has commenced a group proceeding (class action) against Treasury Wine Estates Limited (TWE) on behalf of persons that acquired TWE securities from 14 February 2019 to the release of a market announcement made late on 28 January 2020.
“The proceeding alleges that eligible shareholders have claims against TWE in relation to losses suffered following the Company’s announcement to the ASX after close of trade on 28 January 2020. In its announcement, TWE disclosed the following in relation to the financial year ended 30 June 2020 (FY20):
“TWE’s earnings before interest, tax, SGARA and material items (EBITS) growth was now expected to be at a rate of five per cent to 10 per cent;
“TWE’s Americas division reported a 17 per cent decline in EBITS to $98.3m and an EBITS margin of 16.1 per cent.”
TWE said it had received the action, and denied any wrongdoing, the company said: “The statement of claim includes allegations of contraventions of the Corporations Act in relation to continuous disclosure and the Corporations Act and ASIC Act in relation to misleading or deceptive conduct.
“TWE strongly denies any and all allegations of wrongdoing and intends to vigorously defend the proceeding.”
The action relates to TWE’s EBITS growth rate, with TWE saying in February 2019 its expectation for FY20 was 15 per cent to 20 per cent EBITS growth rate. But in January this year TWE said it expected reported EBITS growth of approximately five to 10 per cent in FY20, saying it expected the current challenging conditions in the US wine market to persist through the remainder of the year.