Guzman Y Gomez grilled by ASX over lack of earnings guidance

[Pelican Press 0]

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Guzman Y Gomez grilled by ASX over lack of earnings guidance

Guzman Y Gomez has been forced to defend its non-disclosure practices after being queried by the *********** Securities Exchange over lower-than-expected earnings in the first half that sent its shares plunging.

Softer sales and earnings in the US, along with group earnings that undershot market expectations, took the shine off the *********** segment’s results and sent shares tumbling 14.2 per cent on February 21.

In a lengthy letter to the company four days later, the ASX questioned whether Guzman considered any measure of its earnings for the December half differed materially from the market’s expectations.

It also asked if Guzman had used sell-side analyst forecasts to estimate the market’s expectations of its earnings.

In response, the ********-themed restaurant chain said it did not publish earnings guidance for the half-year and believed the results were not materially different to market’s expectations. It confirmed it was in compliance with the listing rules.

Earnings before interest, tax, depreciation and amortisation for the six months to the end of December hit $26.8 million, 3 per cent below market consensus.

Guzman said it was covered by 10 sell-side analysts whose forecasts were tracked by the company as an indicator of the market’s earnings expectations. Seven of those analysts provided forecasts of key measures of Guzman’s earnings for the first half.

“In the following weeks prior to the results announcement, GYG continued to hold the view that its expected earnings were materially in line with the market’s expectations,” the company said.

Guzman listed on the ASX last June, with shares hitting $45 the day before it released its half-year results on February, to a low of $38.58 following it.

Guzman shares were up 2.1 per cent to $33.60 in early trade on Wednesday.

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