Medical gear manufacturer Ansell has been hit with a class action over a profit downgrade that stripped $600 million off the value of its shares.
Law firm Slater and Gordon filed the class action in the Victorian Supreme Court on Wednesday for investors who bought shares in ASX-listed Ansell from August 24, 2021 to January 28, 2022.
The claim alleges Ansell engaged in misleading or deceptive conduct and contravened its disclosure obligations over a profit downgrade of up to 28 per cent that wiped $600 million in share value from the group.
The leading medical gloves and surgical suits maker advised the ASX on August 24, 2021 its earnings per share forecast for the 2021/22 financial year was between 1.75 to 1.95 US cents and maintained that guidance in November.
The guidance was downgraded on January 31 last year to between 1.25 to 1.45 US cents, leading to Ansell’s share price tumbling 17 per cent by February 3.
Ansell knew or ought to have known its guidance was unreasonably optimistic and there was a material risk it would not be met, Slater and Gordon class actions senior associate Tom O’Bryan said.
“It is alleged that the company should have communicated deficiencies in its forecast earnings much earlier than it did,” Mr O’Bryan said.
“Investors are entitled to assume that when they purchase shares in a listed company, all of the material information relevant to that company’s financial position has been disclosed.
“The downgrades by Ansell in January 2022 revealed that was not actually the case.”
Ansell’s share price peaked beyond $42 in 2021 as demand for personal protective equipment soared at home and abroad during the COVID-19 pandemic.
The stock was trading at $24.24 when markets closed on Wednesday afternoon.
Slater and Gordon has encouraged investors who bought Ansell shares over the five-month window to register for its class action, saying members will not be exposed to out-of-pocket costs.
Ansell has been contacted for comment.