Vocus settles shareholder class action for AU$35 million
Vocus informed the ASX on the Monday morning before Christmas that it had settled a class action brought against it in April.
The company said the settlement is without any admission of liability, and is subject to Federal Court approval.
"The settlement amount is AU$35 million inclusive of interest and costs," the company said.
"Vocus will contribute AU$3.5 million to the settlement, which will be reported as a significant item below underlying EBITDA. The remainder of the settlement is fully insured."
First muted in September 2017, the action centred on two allegations related to its financial guidance during 2016-2017: That "Vocus engaged in misleading and deceptive conduct because it had no reasonable grounds for the original FY17 guidance issued in November 2016"; and that the telco "breached its obligations of continuous disclosure by failing to disclose that it would not achieve the FY17 guidance".
The action was brought by law firm Slater and Gordon and shareholder claim management and funding-service provider Investor Claim Partner.
Vocus said on Monday the settlement was in the best interests of shareholders.
In July, the company split its operations into three divisions, after two potential buyers walked away from acquiring the telco a month prior. The three parts are Vocus Network Services, Vocus New Zealand, and Vocus Retail.
For its full year results announced in August, Vocus Group maintained steady revenue as its profitability fell during the year. The company took in a steady AU$1.9 billion in revenue as its earnings before interest, tax, depreciation, and amortisation (EBITDA) dropped by 3% to AU$349 million, flowing into a 19% reduction in EBITA to AU$106 million, and a 44% reduction in net profit to AU$34 million.
Related Coverage
Vocus wants NBN to stick to its original wholesale remit
The telco is unimpressed with the government-owned, so-called wholesaler directly signing up customers.
Vocus hoping ACCC can solve broadband affordability if NBN cannot
Vocus CEO Kevin Russell attacks the CVC as a download tax, saying the market value of NBN is far less than what it had cost to build.
Australian telcos to provide roaming alerts beyond SMS
Rules to enter into force from mid-next year for devices incapable of receiving SMS alerts.
Vocus network services and New Zealand covering for retail declines for FY19
Revenue flat for the full year, while EBITDA declined 3%, and net profit fell 44%.
New Zealand ComCom lays charges against Vocus subsidiaries
Telecommunications providers face charges for billing customers after contracts were terminated.