Austal shareholders are likely breathing a sigh of relief… for now.
The post Why the Austal (ASX:ASB) share price will be on watch today appeared first on The Motley Fool Australia. –
The Austal Limited (ASX: ASB) share price will be one to watch today. This comes after the shipbuilder announced an update late Friday after market close in relation to its potential criminal infringements of the Corporations Act.
Austal shares closed last week at $2.06.
What did Austal announce?
It could be an interesting day for Austal shares as investors had the weekend to digest the company’s latest statement.
According to the release, Austal has received official word from ASIC regarding its criminal investigation into the company. ASIC stands for Australian Securities and Investment Commission, an independent government body that regulates markets, financial services and consumer credit.
In conclusion of the investigation, ASIC has decided not to pursue any criminal action against Austal. This follows previous research into the company’s financial performance between 1 January 2009 to 28 August 2017.
While the outcome is pleasing, Austal did further announce that civil proceedings issued by ASIC are still standing. This relates to market disclosures about Austal’s Littoral Combat Ship (LCS) program before July 2016.
It is alleged that Austal and its former CEO David Singleton failed to notify the market of an earnings write back.
The company noted that it is still considering a response in this matter.
Austal CEO Paddy Gregg commented:
There is a sense of relief that ASIC has investigated the matter and decided not to pursue criminal charges around Austal’s previous market disclosures, however we still must deal with the civil action that ASIC has previously initiated.
About the Austal share price
Over the past 12 months, Austal shares have continued their downward trajectory, slipping by around 36%. Year to date, the Austal share price also hasn’t fared well, down almost 23% since the start of 2021. The company hit a multi-year low of $1.98 in late February and is near the bottom of its 52-week range.
On valuation grounds, Austal presides a market capitalisation of roughly $740 million, with approximately 359 million shares on its registry.
Should you invest $1,000 in Austal right now?
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Austal Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.