Class action appeal win for Worley shareholders

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An appeal court has revived a class action against Worley over an optimistic earnings forecast in 2013

and there was no breach of misleading conduct or continuous disclosure rules.

On October 9, 2013, Worley advised that its first-half earnings would be lower but stuck to the full-year guidance. On November 20, it said it expected to report underlying NPAT for FY2014 in the range of $260 million to $300 million.Shares in Worley – then called Worley Parsons – tumbled 26 per cent on that day, wiping more than $1 billion off its market value. The final NPAT for FY2014 was $249.1 million.

Justice Jagot and Justice Murphy said the key issue was whether Worley had reasonable grounds for the FY14 earnings guidance in August. “The primary judge [Justice Gleeson] appears to have been looking in the Holt memorandum for an express statement that the budget process used by Worley in FY14 was unreliable.

 

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