Australian Securities and Investments Commission v McPherson's Limited: Continuous Disclosure Breach

• The Federal Court found McPherson's Limited breached its continuous disclosure duty by withholding a collapsed China sales forecast during a share raising.
• The company provided investors with guidance on full-year profit growth of 5 to 10 percent, based on forecast sales of $48 million to its main China distributor.
• Results from China's '11/11' online shopping event confirmed that sales had fallen short, but the company did not disclose this information promptly.
• The court also found that McPherson's Limited engaged in misleading conduct by not withdrawing or correcting the October guidance over the same period.

The court accepted that the document was treated as a draft internally but held that it left the earlier guidance without a reasonable basis from 12 November 2020.

McPherson's Limited, a listed consumer goods company, and its former chief executive officer have been found to have breached disclosure laws by withholding a collapsed China sales forecast during a share raising. The Federal Court's decision, released on 13 August 2026 in Australian Securities and Investments Commission v McPherson's Limited [2026] FCA 1130, held that the company had failed to disclose price-sensitive information in a timely manner. The court found that McPherson's Limited had provided investors with guidance on full-year profit growth of 5 to 10 percent, based on forecast sales of $48 million to its main China distributor. However, the distributor later sent a revised forecast of around $26 million, and results from China's '11/11' online shopping event confirmed that sales had fallen short.

The court's decision highlights the importance of timely disclosure of price-sensitive information in the context of market guidance and revised forecasts. McPherson's Limited breached its continuous disclosure duty, which requires companies to disclose material information promptly to the market. The company argued that the 26 October 2020 forecast was a draft and therefore not subject to immediate disclosure. However, the court accepted that the document was treated as a draft internally but held that it left the earlier guidance without a reasonable basis from 12 November 2020. This decision serves as a reminder for listed companies to carefully consider their disclosure obligations when providing market guidance.

The court's emphasis on timely disclosure of price-sensitive information has significant implications for lawyers advising listed companies on ASX. The decision highlights the importance of ensuring that market guidance and revised forecasts are disclosed promptly to avoid breaching continuous disclosure duties. This is particularly relevant in the context of market guidance, where companies must be careful not to provide guidance that lacks a reasonable basis. The court's rejection of McPherson's Limited's argument that the 26 October 2020 forecast was a draft serves as a warning for companies to carefully consider their disclosure obligations and avoid withholding material information from investors.

Lawyers advising listed companies on ASX should watch for the court's emphasis on timely disclosure of price-sensitive information, particularly in the context of market guidance and revised forecasts.

Source: Original reporting via Australasian Lawyer