Shine Lawyers has launched a class action on behalf of Australian and New Zealand shareholders who suffered losses after acquiring A2 Milk shares (A2M) on the ASX or on the NZX following a 62% drop in market value in FY21.
If you acquired A2M shares between 19 August 2020 and 7 May 2021, you may be eligible to join this class action.
What is the A2 Milk Class Action about?
The class action alleges that between 19 August 2020 and 7 May 2021, A2M engaged in misleading and deceptive conduct, breaching its continuous disclosure obligations, and failing to adequately disclose future trade plans.
It is further alleged that by 19 August 2020, A2M was, or ought to have been aware that their FY21 guidance, and subsequent representations, did not adequately take into account a number of factors known to A2M which ultimately impacted the Company’s financial performance, resulting in a 62% drop in market value in FY21. These factors include:
- The decline in daigou or reseller sales, which fell due to the impact of A2M’s sales through its Cross Border e-Commerce Channel (CBEC). This saw A2M heavily market English labelled infant products directly into the Chinese market with discounting that effectively undercut their sales in the daigou or reseller channel; and
- The decline in the CBEC business due to the decline in daigou or reseller sales, as daigou sales often help stimulate demand for direct orders.
If you acquired A2M shares in Australia (ASX) or New Zealand (NZX) between 19 August 2020 and 7 May 2021, you may be eligible to join this class action.
Why choose Shine Lawyers’ Class Action Team
Shine Lawyers’ Class Actions Team possess the skills, industry insight and dedication to deliver exceptional results for everyday Australians. We have fought for successful outcomes for group members in class actions against high profile corporate and government entities, including Johnson & Johnson and DePuy International, as well as the Department of Defence.
Craig Allsopp, who leads this class action, has extensive experience as a solicitor and specialised expertise in shareholder class actions. Craig leads a team of highly skilled lawyers with a proven record in complex, multi-party litigation.
To learn more about our work in this area of law, visit our Class Actions page.
Can I join the A2 Milk Class Action?
To be part of this class action you must have:
- Purchased Australian or New Zealand shares either on the ASX or NZX in The A2 Milk Company Limited (ASX:A2M and NZX:A2M) during the period 19 August 2020 to 7 May 2021.
If you meet this criteria, you may be entitled to compensation, and you are encouraged to register for the A2 Milk Class Action.
How to register for the A2 Milk Class Action
Background to the A2 Milk Class Action
Shine Lawyers’ Class Actions Team commenced a class action against A2M following reports of alleged misconduct in connection with multiple downgrades of the milk company’s expected revenue in FY21.
The following timeline highlights the series of events that led to the drop in market value:
The company reported its results for the financial year ending 30 June 2020. A2M reported it achieved revenue of $1.73 billion and an EBITDA to sales margin (EBITDA margin) of 31.7%. In the same announcement, the company provided guidance for the 2021 financial year, stating that it expected to continue its strong revenue growth and to achieve an EBITDA margin of 30% to 31%.
A2M announced that it expected its FY21 group revenue to be between $1.8 billion and $1.9 billion and that its group EBITDA margin would be 31%.
A2M went into a trading halt pending an announcement regarding its previously issued guidance to the market.
A2M announced a downgrade to its expected FY21 group revenue from between $1.8 billion and $1.9 billion to between $1.4 billion and $1.55 billion. The group EBITDA margin was also downgraded from 31% to between 26% and 29%.
A2M announced that it expected its FY21 group revenue to be at the lower end of its previously downgraded guidance, being $1.4 billion, and that it’s group EBITDA margin would drop to between 24% and 26% (excluding MVM transaction costs).
A2M announced a further downgrade of its expected FY21 group revenue from $1.4 billion to between approximately $1.20 billion and $1.25 billion. The group EBITDA margin was also significantly downgraded to between 11% and 12% (excluding MVM transaction costs).
The Share Price Drop
Immediately following the 28 September 2020 announcement, A2M’s share price opened at $15.41 and closed at $15.31, down from the previous day’s close of $17.20 (a reduction of $1.89 or approximately 11%).
The share price continued to fall immediately following the 18 December 2020 announcement, where A2M’s share price opened at $9.97 and closed at $10.23, down from the previous trading day’s close of $13.28 (a reduction of $3.05 or approximately 23%).
Again, immediately following the 25 February 2020 announcement, A2M’s share price opened at $8.85 and closed at $8.77, down from the previous day’s close of $10.45 (a reduction of $1.68 or approximately 16%).
Finally, immediately following the 10 May 2021 announcement, A2M’s share price opened at $6.05 and closed at $6.09, down from the previous day’s close of $7.00 (a reduction of $0.91 or 13%).
Over the period from 19 August 2020 to 7 May 2021 A2M shares lost two thirds of their value.
Who is Shine Lawyers’ Class Action Team?
Shine Lawyers’ Class Action Team includes some of the firm’s most experienced solicitors and support staff. The team includes: