Bellamy’s denies breaching rules as shares surge

Infant formula company Bellamy’s says it has not breached continuous disclosure rules and that it provided a market update on Thursday as soon as it had completed an analysis of its September quarter performance.

Many eyes have been on the infant formula company this week – including those of the ASX, investors and industry observers – after the company’s stock surged higher three days in a row before it released a positive market update about its forecasts for fiscal 2018 before trading started on the fourth day, Thursday.

Shares in Bellamy’s jumped through the $10 mark in the wake of the update released before the market opened, the first time it had traded in double figures since the beginning of December 2016.

On Monday the stock jumped 4.4 per cent, followed by a 5.2 per cent jump on Tuesday, a 12 per cent jump on Wednesday and a 4.6 per cent rise on Thursday. The stock closed on Thursday at $10.23, but hit an intra-day high of $10.60 in early trade.

Asked by Fairfax Media on Thursday evening if the company had breached its continuous disclosure obligations, a Bellamy’s spokesman said “no”.

“Bellamy’s provided today’s market update as soon as it had completed an analysis of the first quarter performance and to address concerns about how the share price had traded in recent days and whether there had been a false market,” the spokesman said.

“Today’s disclosure is in line with Bellamy’s commitment to providing transparency and a fully informed market and the company takes its continuous disclosure obligations seriously.”

The spokesman for Bellamy’s also said it had not received a “formal query” from the ASX.

Meanwhile, an ASX spokesman confirmed it had noted the strong rises in Bellamy’s stock price this week.

“ASX is monitoring closely the situation and notes that the whole sector has been up strongly this week,” he said.

Bellamy’s told the market on Thursday it wanted to update its guidance given to the market in August as part of its results for fiscal 2017.

“Early results in fiscal 2018 have been positive and consequently Bellamy’s is upgrading its fiscal 2018 guidance for its core business (excluding Camperdown) to a target of 15-20 per cent revenue growth (from 5-10 per cent); and 17-20 per cent earnings before interest, tax, depreciation and amortisation (EBITDA) margin (from 15-20 per cent),” the company said.

It has been a big week for the Tasmanian-based company. The market update came a day after it revealed it had paid a $66,000 penalty, without an admission of liability, after it received an infringement notice from the n Securities and Investments Commission.

The payment of this penalty seems to have been a catalyst for at least some investors to buy the stock, with the shares jumping 12 per cent on the day the company informed the market it had paid the penalty.

Bellamy’s confirmed that the infringement notice related to allegations it had breached its continuous disclosure obligations late last year, in the period from October 18 to December 2.

The Wednesday statement about the $66,000 financial penalty also said: “Bellamy’s has agreed to accept the infringement notice and pay the penalty as a way to conclude the matter (avoid further costs) and allow the company and its management team to focus on the operations of the business and increasing value for shareholders. It is not an admission of liability nor a finding of any breach of law.”

Over the past month a number of companies involved in the infant formula business have performed strongly on the n sharemarket, including the likes of a2 Milk. But, according to Bloomberg figures, Bellamy’s climb over the past month has been steeper than that of a2 Milk, Murray Goulburn and Bubs .

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