02 9222 8000


SurfStitch Group Limited

  • Commercial and Business Law
  • Christian Tager
  • No Comments
  • June 29, 2016

SurfStitch Group Limited

Diamond Conway is presently investigating a possible class action on behalf of shareholders against SurfStitch Group Limited. At this stage, Diamond Conway anticipates the claim will be brought on behalf of those shareholders who bought shares in Surfstitch between 1 January 2016 and 7 June 2016. However, the investigation period can be enlarged depending on the information received from shareholders and therefore participating shareholders should also provide details of shares bought since the company’s initial public offer in 2014.


In its Annual Report for the fiscal year 2015, Surstitch provided investors with FY2016 guidance as follows:

“…EBITDA in particular is expected to have a stronger second half in FY2016 as our rebranding and strategic plan gain further traction, with full year FY2016 EBITDA expected to range between $15-$18 million (growth of 100%+)”

On 25 February 2016, in its Interim Financial Report, Surfstitch reported its pro forma EBITDA as $13.9 million.
On 9 June 2016, SurfStitch Group announced “that pro-forma EBITDA for FY2016 is likely to be a loss, in the range of $17.3 million to $18.3 million” (“9 June Announcement”). In the 9 June Announcement, Surfstitch flagged a $20.3 million reversal in revenue due to:

  1. it entering into a perpetual license agreements with an undisclosed third party in the second half of FY2016 which became effective 15 March 2016; and
  2. following an in depth review of the above contracts and recent information.

At its peak, the shares were trading at $2.13 per share (November 2015). However, by 15 June 2016, the share price plummeted to about $0.25.

Diamond Conway is presently investigating the possibility as to whether Surfstitch:

  1. breached its continuous disclosure obligations of ASX;
  2. engaged in misleading and/or deceptive conduct (which includes by representations made to the market as well as information it failed to provide to the market);
  3. breached reporting requirements and other obligations under the Corporation Act

Please register your interest by clicking here.