Bellamy’s cops ASIC fine

INFANT milk formula supplier Bellamy’s Australia has paid a $66,000 fine after the corporate regulator alleged the company failed to properly inform the market of its financial performance last year.

The Australian Securities and Investments Commission issued Bellamy’s with an infringement notice for the alleged breach of its continuous disclosure obligations between last October and December.

In a statement to the Australian Securities Exchange yesterday, Bellamy’s said it had agreed to pay the fine but it wasn’t an admission of liability.

ASIC investigated the company’s market disclosures after Bellamy’s said on December 2 that it expected revenue in the first half of its 2017 financial year would be lower than expected at about $120 million.

At the same time, Bellamy’s said revenue in the second half would be similar if trends continued. That announcement triggered a massive share price plunge, which was exacerbated in January when Bellamy’s flagged a significant drop in sales in its key China market and downgraded its full-year earnings forecast.

ASIC said the Bellamy’s board was told last October 18 that brokers were forecasting sales revenue of about $368 million for the full financial year, and they should have known at that point that the company was unlikely to meet the market forecast.

It should have informed the market earlier than December 2, the commission said.

Bellamy’s said yesterday that it believed it complied with its disclosure obligations last year, and had paid the fine as a way of concluding the matter and allowing its management to focus on current operations. It has since overhauled its board of directors, due mainly to a shareholder revolt early this year.

“The new board and management team takes its continuous disclosure obligations seriously and will regularly review its continuous disclosure reporting procedures,” Bellamy’s chairman John Ho said.

Bellamy’s shares surged $1.05, or 12 per cent, to close at $9.78 yesterday.