iSelect stands by market statement
In a statement to the market on Wednesday, iSelect said it would leave the August 29 announcement as it was until it had finalised its September quarter accounts.
BusinessDay revealed on Tuesday that the regulator demanded the company either clarify or retract the announcement, stating in a letter to iSelect lawyers it believed the company cut internal revenue forecasts for its health and car insurance businesses without telling the market.
The company confirmed it had received a notice from the Australian Securities and Investments Commission, asking it to explain the assumptions underpinning its earnings before interest, tax, depreciation and amortisation forecast for the year to December of $30 million.
But iSelect said in the interests of shareholders it would issue a trading update only "once it had finalised its management accounts for the September quarter".
The company said it expected to be in a position to provide the market with a trading update for the September quarter within the coming days, but had no reason to depart from its previous advice that it would hit its earnings forecasts.
Shares in iSelect fell 15 per cent after the company listed on the Australian Stock Exchange on June 24. They have not since traded above their issue price of $1.85, and closed on Wednesday down 2.5¢ at $1.20.
The company said it would provide ASIC with a draft trading update on Thursday, following a meeting with regulators on October 3. It was of the view that since listing on the ASX in June, "it has fully complied with all of its continuous disclosure obligations".
Frequently Asked Questions about this Article…
iSelect defended the August 29 announcement and said it would leave that statement as-is until it finalised its September-quarter management accounts. The company said it would issue a trading update for shareholders only once those accounts were complete and expected to provide that update within the coming days.
ASIC sent iSelect a notice asking the company to explain the assumptions underpinning its EBITDA forecast of $30 million for the year to December. The regulator also indicated in a letter that it believed iSelect had cut internal revenue forecasts for its health and car insurance businesses without informing the market, and asked the company to clarify or retract its earlier announcement.
The contested figure is iSelect's earnings before interest, tax, depreciation and amortisation (EBITDA) forecast of $30 million for the year ending in December.
iSelect said it would provide a trading update once it had finalised its September-quarter management accounts and expected to do so within the coming days. The company also said it would provide ASIC with a draft trading update on the Thursday following its meeting with regulators on October 3.
Shares in iSelect fell 15% after the company listed on the ASX on June 24. They have not traded above their issue price of $1.85 and, as reported, closed at $1.20 (down 2.5 cents) on the referenced Wednesday.
Yes. iSelect stated it was of the view that since listing on the ASX in June it has fully complied with all of its continuous disclosure obligations.
BusinessDay reported that ASIC demanded iSelect either clarify or retract its August 29 announcement, noting in a letter to iSelect’s lawyers that the regulator believed the company had internally reduced revenue forecasts for its health and car insurance businesses without telling the market.
Investors should watch for the imminent September-quarter trading update from iSelect, the draft trading update the company said it would provide to ASIC after the October 3 meeting, and any further communication from ASIC. These updates will clarify whether iSelect remains on track to meet its $30 million EBITDA forecast and may influence share-price movements.
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