Vocus settles for $35m

Class action ends in payout for investors

VOCUS Group has settled a $35 million class action suit launched on behalf of shareholders who say they were stung by “misleading” profit guidance.

The Dodo and iPrimus brand owner said yesterday’s settlement – made without admission of liability – was inclusive of interest and costs.

All but $3.5 million will be covered under insurance.

Vocus was alleged to have engaged in misleading or deceptive conduct in providing full-year guidance in late November 2016 and confirming it in late February 2017, before a downgrade in early May 2017 sent the company’s share price about 30 per cent lower.

The claim filed by Slater and Gordon in April was for shareholder losses arising from an inflated share price.

Vocus said in a statement the agreement to settle was a commercial decision “made in the best interests of the company and its shareholders”. The settlement is subject to Federal Court approval.

Vocus shares were up 2.71 per cent to close at $3.03 yesterday, but have still slipped during a year in which its profit slumped and it was subject to a number of takeover offers.

Vocus shares spiked 17 per cent to a more-than-two-year high in May when Stockholm-based private equity firm EQT Infrastructure proposed a $3.3 billion takeover.

Those gains evaporated within a week when EQT withdrew its offer, only for AGL to lob a fresh $3.02 billion bid just days later.

However, that too was withdrawn.

Dodo in July also agreed to refund $360,000 to about 16,000 customers who incurred excess data charges after signing up for NBN plans advertised as “perfect for streaming”.

Vocus admitted the claims were “likely to be false or misleading and in contravention of the Australian Consumer Law”.

The company’s FY19 statutory net profit fell 44 per cent to $34 million, within guidance, with chief executive Kevin Russell later accusing the taxpayer-funded NBN of creating a broadband market that undermines competition.