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Media Release

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National law firm Slater and Gordon has confirmed that it was approached by shareholders of Nufarm Limited (Nufarm) after the company halved its underlying net profit guidance in July this year.

Slater and Gordon, Senior Associate, Ben Phi said that the firm would shortly finalise its investigation, and expected to launch a class action on behalf of shareholders that acquired Nufarm Limited shares between 2 March 2010 and 14 July 2010.

The proposed class action will allege that Nufarm engaged in misleading or deceptive conduct when it provided its profit guidance on 2 March 2010, and breached its continuous disclosure obligations throughout the period.

Nufarm is an Australian-based crop protection company with manufacturing and marketing operations in Australia, New Zealand, Indonesia, Europe, North America and South America.  The company is the manufacturer of glyphosate-based herbicides, which it is licensed to distribute under the “Roundup” brand in Australia.

Mr Phi said that on 14 July, 2010, Nufarm downgraded its guidance for the full year ending 31 July 2010 by 50 per cent from an operating net profit after tax of $110-$130 million, to a range of $55-$65 million.

“Institutional investors expressed serious concerns when Nufarm halved its full-year operating profit guidance on 14 July 2010.  The guidance had been confirmed on numerous occasions since the beginning of March, including in late April when the company raised $250 million from its current shareholders under an entitlement offer.”

He said the share price “reacted savagely” to the profit downgrade, falling 35 per cent in the immediate aftermath.

“Nufarm has sought to blame its downgrade on poor weather in North America and Europe, as well as the depressed pricing for glyphosate-based herbicide.  We have concluded that these are matters that Nufarm’s management was or ought to have been aware of at the time it provided its profit guidance on 2 March 2010.    Indeed, these are the same factors that Nufarm blamed when it downgraded its guidance in the previous financial year.”

Mr Phi said the proposed class action had received strong support from institutional investors, but “mum and dad” investors would be expected to join.

The proposed class action is funded by Comprehensive Legal Funding.

Mr Phi said Slater and Gordon was also close to finalising its investigation into a potential shareholder class action against Elders Limited, which also severely downgraded its net profit guidance this year, in part, as a result of conditions in the global glyphosate market.

“We have identified a number of common issues between Nufarm and the Elders claims,” he said.