Home > TWE share price plummets, class action expected to intensify

TWE share price plummets, class action expected to intensify

article image

Treasury Wine Estates has angered shareholders following the announcement that the company expects earnings for the first half of 2014 to be substantially less than last year, coupled with a 20 percent drop in the company’s share price as of 2pm yesterday.

TWE released a statement yesterday informing investors that current expectations for EBITS for the first half of fiscal 2014 would be between $42m and $46m - substantially less than last years’ $73.4m.

The company also stated that it expects to experience challenges throughout 2014.

“TWE does not expect to recover the first half shortfall and expects these challenges to continue in the second half,” the statement reads.

“Therefore the company has lowered its EBITS guidance range for fiscal 2014 to $190 million – $210 million from its previous range of $230 million – $250 million.”

The shock announcement has once again raised issues of operational transparency within TWE.

Ben Slade, managing principle at Maurice Blackburn Lawyers who will be leading a shareholder class action against TWE said that the case will be expanded to include the losses incurred yesterday.

"TWE's announcement this morning suggests that continuous disclosure requirements may not have been complied with,'' Slade told the Weekly Times Now.

"We are confident that the company's shock $190 million downgrade announcement in July last year was indicative of such a breach.”

At its annual general meeting in October last year, Treasury Wine Estates chairman, Paul Raynersighted poor reporting systems as a key factor in the company’s decision to write-down millions of dollars of stock which led to a 12 percent drop in shares, and the ejection of chief executive David Dearie.

Newsletter sign-up

The latest products and news delivered to your inbox