ASX grills Volante

Volante has been questioned by the Australian Stock Exchange around its disclosure of a profit downgrade.

The integrator was approached by the ASX in a price query after its securities dipped from $1.30 on November 9 to $1.17 the following day.

In a responding statement, company secretary, Stewart Shears, told the ASX the company continued to incur costs as it transitioned to a services-based company.

These costs had involved redundancies worth $750,000 and other non-recurring costs totalling $15.5 million before tax in the first half of the year.

Tendering costs of around $1 million for a number of managed services contracts had also been run up.

“The combination of lower product revenue and non-recurring costs is currently expected to result in a net profit after tax of between $2 million and $2.5 million for the current half-year” he said.

However the ASX was not satisfied with the explanation, issuing further questions on November 14 as to why the company had not informed the market sooner of its expected variation on its net profits after tax of more than 15 per cent for the year to December 31.

In a second statement, Volante’s Shears said the variation – expected to be between 24 to 39 percent – was not disclosed prior to November 11 due to its being confidential and insufficiently definite to warrant disclosure.

“It was information that a reasonable person would not expect to be disclosed due to its potentially misleading nature,” he said.

“It also did not accurately account for the seasonal nature of the company’s operations for which information prior to that time was not available.”