Calls are mounting for a stock exchange investigation, after shares in dual-listed Australian clothing and homeware supplier Pacific Brands slumped sharply a day ahead of a profit warning.
Pacific Brands chief executive Paul Moore admitted the clothing company's investor relations manager spoke to a Macquarie Equities analyst the day before
Friday's earnings downgrade, the Sydney Morning Herald reported today.
The paper quoted an unnamed institutional fund manager, who holds Pacific Brands shares, as saying it was "an open secret" last Thursday that the maker of Berlei bras and Bonds singlets had discussed earnings forecasts with analysts, sparking speculation a profit downgrade was "in the pipeline" and sending the shares sliding.
On Friday morning, Macquarie Equities cut its rating on Pacific Brands. Within hours, Pacific Brands said first-half earnings would fall as much as 5 per cent from a year ago.
In New Zealand, Pacific Brands -- which in November bought the bedware and merino business of iconic local firm, Arthur Ellis -- fell 13 per cent to $2.55 on Friday.
Mr Moore told the Sydney Morning Herald that Pacific Brands' investor relations manager Katherine Cooper spoke with a Macquarie Equities analyst at about 11.30am on Thursday. He said he was "comfortable" the company's earnings were not discussed.
Mr Moore said he "categorically" denied any suggestion of impropriety, adding media interest was a "beat up".
In 2004, Macquarie Equities was joint lead manager of the A$1.25 ($1.36 billion) float of Pacific Brands.
Mr Moore said he returned from holidays on Thursday night to deal with an informal Australian Stock Exchange query on the share price move and heavy trading volume. The ASX again queried the company before the sharemarket opened on Friday.
Pacific Brands on Friday said its earnings before interest, tax and amortisation (EBITA) for the December half year was expected to be two to five per cent below the previous corresponding period's A$90.6 million result.
Pacific Brands, whose goods are sold primarily through the major department and specialty stores, has joined the likes of Super Cheap Auto and jewellery retailer Michael Hill International in experiencing soft Christmas sales.
- NZPA
