Shares in Adairs have fallen after the linen and homewares retailer paid a $66,000 penalty for allegedly failing to notify the ASX that its 2017 full-year guidance would be materially lower than market expectations.
The Australian Securities and Investments Commission issued an infringement notice alleging Adairs was in breach of its continuous disclosure obligations between September 23 and November 2, 2016, by failing to inform the market of revised forecasts.
The announcement triggered a fall in the company's shares, which were down six cents, or 3.8 per cent, to $1.53 at 1118 AEDT on Friday.
Analysts revised their expectations for Adairs' 2017 full-year results after the company in August posted a 19 per cent leap in full-year profit in 2015/16.
Subsequently, in September last year, Adairs received updated financial reports in relation to its performance which contained revised forecasts for the 2017 financial year, the corporate watchdog said.
ASIC alleges that by then, Adairs had become aware that its earnings and profit forecasts would be lower than those predicted by analysts but did not alert the ASX until November 2, when it released a trading update saying the first four months of the financial year 2017 was below its expectations.
ASIC commissioner Cathie Armour said it is fundamental to the integrity of the market that listed entities immediately disclose market sensitive earnings surprises.
Adairs said it has not admitted liability but has agreed to pay the $66,000 penalty to conclude ASIC's investigation and to avoid additional costs.
