In a letter to Volante's board, the ASX asked for an explanation as to when it became known that the forecast first half profit for 2005 would be significantly different from the previous corresponding period (the revised profit forecast is down between 24% to 39% on 2004). The ASX went further and asked why indications of a profit variation were not disclosed to the market at an earlier stage than 11 November.
Volante responded by stating: "At the Board meeting on 2 November 2005, the Directors noted that the September year to date results were down on both budget and the corresponding period in the prior year. Month to month variation is not uncommon for the Company and the October to December quarter has historically provided a majority of the Company's first half profit. The Board formed the view that the first quarter's results were insufficient on their own to accurately forecast the result for the half year ending 31 December 2005 and resolved to obtain further details of the sales pipeline for the second quarter to
confirm whether the second quarter would repeat prior year performance and deliver a majority of the half year result. The Board also requested further details to clarify a number of aspects of the first quarter figures that were considered by the Board to be incomplete.
"A full re-forecast of the expected result for the half year ending 31 December 2005 was requested by the Board, and a sub-committee comprising the Chairman, chairman of the audit committee, Finance Director and Managing director was appointed to review this as soon as it was available.
"The Company's finance department prepared an indicative result for the month of October 2005 as soon as early estimates of the October sales results became available on 7 November 2005.
"The reforecast was not completed until the evening of 10 November. Normally this forecast work is not completed until mid month. Upon receipt of the November and December forecast numbers the finance department then prepared an indicative 1st half result during the evening of 10 November which was completed around 11.45pm.
"These results were then discussed with the Chief Executive Officer and the Chairman of the Board and it was agreed that an ASX announcement should be made the following morning - being 11 November 2005."
VGL were once again heavily traded and finished down 1c to close on 93c.