Logistics group Brambles, which today faces a hostile vote at its AGM, now also has a potential class action by disgruntled shareholders.
The potential class action being organised by lawyers Maurice Blackburn is to recover losses alleged to have been suffered after Brambles’ share price slumped on the back of its announcement in January that it would be unable to meet its sales and profits forecasts.
In August 2016, Brambles gave guidance of sales growth of 7% to 9% and profit of 9% to 11%.
However, in January this Brambles told the market it expected sales growth of 5% and profit growth of 3% for the first half and sales and profit growth for the full year to be below previous guidance.
The share price dropped almost 16% on January 23 and 10% on February 20.
Brambles says it hasn’t received any formal communication nor has it been served with any proceedings.
The company today reported sales revenue of $US1.374 billion for the first three months of the financial year, a rise of 8% at actual FX rates and 6% at constant currency.
The company also faces a potential first strike vote at the AGM against the Brambles remuneration report.
In a note to clients, Citi says the board must answer questions about the performance of the board of directors.
“We believe a faster rotation of the board would be welcomed by the investment community,” Citi says.
A review by the board into the performance of the board members seeking re-election found that “as a result of that review, unanimously recommends” the re-election of the chairman, Stephen Johns, and two directors.
“While unknown as to what was considered within the review, we believe shareholders deserve better clarity, given both strategic investments and the share price have both underperformed the market over recent years,” Citi says.
Proxy advisors are reportedly urging a vote against the remuneration report and the re-election of the chairman.