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When did Slater and Gordon issue proceedings?

Slater and Gordon (SGH), as instructed by the lead plaintiff, has commenced a group proceeding against The a2 Milk Company Limited (a2) on 5 October 2021.

Is this relevant to me?

If you purchased a2 Milk shares between 19 August 2020 and 9 May 2021 inclusive.

How do I register my interest?

If you purchased a2 Milk Shares at any point between 19 August 2020 and 9 May 2021 on the ASX or NZX and wish to keep updated as the case progresses, register your interest through the form below. It does not and will not cost you anything.

Register

Please click on the button below to register

Details of the claim

Class action lawyers Slater and Gordon (SGH) have issued a claim against The a2 Milk Company Limited (a2) on behalf of persons that acquired a2 securities between 19 August 2020 and 9 May 2021 inclusive (Claim Period).

SGH considers that eligible shareholders have claims against a2 in relation to losses incurred following the Company’s announcements to the ASX and NZX on:

  1. 28 September 2020, when a2 announced that it expected FY21 group revenue of $1.80bn to $1.90bn and a group Earning Before Interest Tax Depreciation and Amortisation (EBITDA) margin of 31%;
  2. 18 December 2020, when a2 announced that it expected FY21 group revenue of $1.40bn to $1.55bn and a group EBITDA margin of 26% to 29%;
  3. 25 February 2021, when a2 announced that it expected FY21 group revenue in the order of $1.40bn and a group EBITDA margin of 24% to 26% (excluding MVM transaction costs); and
  4. 10 May 2021, when a2 announced that it expected FY21 group revenue in the order of $1.2bn to $1.25bn and a group EBITDA margin of 11% to 12% (excluding MVM transaction costs).

Background

On 19 August 2020, a2 released to the ASX a document entitled Results Commentary FY20 in which it stated that:

(a) overall for FY21, it anticipated continued strong revenue growth supported by its continued investment in marketing and organisational capability; and

(b) it expected to achieve an FY21 EBITDA margin in the order of 30% to 31%,

(together, the FY21 Guidance).

a2 subsequently made a series of further representations in relation to its outlook for FY21 during the balance of the proposed Claim Period.

Allegations

The proceeding alleges that by no later than 19 August 2020, a2 was or ought to have been aware that the FY21 Guidance and subsequent representations did not adequately take account of a number of factors which would impact the Company’s financial performance, including that:

(a) a2’s attempts to boost sales by pushing English label infant nutrition stock through the cross-border e-commerce channel with attendant price discounting consequences would necessarily negatively impact its sales in the daigou/reseller channel; and

(b) a2’s sales through the cross-border e-commerce channel would in turn be impeded by the disruption to the daigou/reseller channel and the loss of associated marketing activity to stimulate consumer demand.

We consider that the above matters support allegations that, during the Claim Period:

(a) a2 engaged in misleading or deceptive conduct in contravention of section 1041H of the Corporations Act 2001 (Cth), by providing and maintaining the FY21 Guidance and subsequent representations which lacked reasonable grounds; and

(b) a2 contravened its obligations of continuous disclosure of price sensitive information under the Corporations Act, by failing to withdraw the FY21 Guidance and subsequent representations or to disclose the maters which affected the achievement of that guidance.

Funding Arrangements

Slater and Gordon is acting in the proceeding on the basis that the Representative in the action will seek a Group Costs Order. If the Court makes such an order, this means that the legal costs payable to Slater and Gordon can be calculated as a percentage of the amount of any award or settlement that may be recovered in the proceeding.

However, we can confirm that you will not be exposed to any out of pocket costs as a result of your participation or registration in the claim.

Register your interest

If you purchased a2 Milk shares between 19 August 2020 and 9 May 2021 inclusive you may register your interest by filling out the form below. You can also electronically sign a Legal Cost Agreement through the form, which will secure your registration within the class action.

What is a legal cost agreement?

A legal cost agreement is an agreement between you and Slater and Gordon.

Benefits to you in signing the agreement include:

  1. You will not be required to take any further steps to be eligible to receive any compensation obtained during the Court-ordered registration process in the future;
  2. You will be eligible to receive legal advice regarding your participation in the claim; and
  3. It costs you nothing, and you will not need to pay any out-of-pocket expenses.

However, it is not necessary to sign a legal costs agreement to register your interest and receive updated information on the progress of the investigation. Simply submit the form below and you will receive a Notice from the Court at a later stage in the proceeding regarding the further steps required of you to register your claim.

If you have any enquiries, please email a2milk@slatergordon.com.au

Register

Please click on the button below to register

Frequently Asked Questions

You may register your interest if you purchased shares between 19 August 2020 and 9 May 2021 inclusive.

If you are unsure about your eligibility, please contact our team at a2milk@slatergordon.com.au. Please allow 48 hours to respond to your enquiry.

No.

The claim has been issued on an “open class basis”. This means that individuals who purchased shares within the claim period are automatically included in the proceeding without the need to register their interest. In order to be entitled to receive any compensation obtained through the proceeding, individuals who meet this definition will likely be invited by the Court during the course of the proceedings to formally register their claims OR opt out of the class action.

The benefit or registering your interest means you will be automatically kept up to date as to the progress of the investigation and will not have to take any further steps to register your claim through the Court ordered registration process.

You will not be exposed to any out-of-pocket expenses, ever.

By signing an agreement with us, you will not be required to take any further steps to be eligible to receive any compensation obtained during the Court-ordered registration process in the future.

By registering your interest, you are simply asking Slater and Gordon to provide you with updated information in relation to the investigation. This is not a formal registration of your claim, and you will likely need to take a step through the Court-ordered registration process in future if you wish to formally secure your claim for any compensation obtained in the proceeding.

Last updated 08th October 2021.