| Cause of Action: | Village Life issued three profit downgrades between February and June 2005, stating the company had incurred “construction delays” or “development delays” and had other problems, including cost over-runs on several unidentified projects and also difficulties with the tenanting of completed villages. In 2005, Village Life’s shares fell from a high of $2.80 in January 2005 to less than $0.30 after the third profit downgrade on 21 June 2005.
In its prospectus, Village Life, a builder and manager of residential accommodation for senior citizens in Australia, forecast that it would complete the construction of 102 villages (approximately 5,000 units) and make a net profit after tax of $15.4 million for the year to 30 June 2005. Village Life fell short of this construction target, completing the construction of 79 villages (slightly less than 4,000 units). On 1 September 2005 Village Life announced a profit of $2 million for the year to 30 June 2005, 87% below the prospectus forecast. The company has continued to disappoint investors, reporting a net loss of $17.3 million for the year to 30 June 2006.
Shareholders who purchased Village Life shares in the IPO, or on the market from 8 December 2003 to 23 May 2005, are seeking to recover losses incurred as a result of misleading and deceptive conduct and breaches of the continuous disclosure regime during this period. The conduct and alleged breaches relate to various statements and omissions made in the prospectus and during the course of 2004 and 2005. |
