Billabong is paying out $45 million to end a shareholder class action over earnings downgrades which saw the surf clothing company’s share price tumble in 2011.

A short time ago, Billabong shares were down 0.76% to $1.31, well down on the 12-month high of $3.85.

Shaun Pyne of New South Wales rides a wave during the 2016 Shark Island Challenge off South Cronulla Point in Sydney. Cameron Spencer/Getty Images

“The settlement is without any admission of liability by Billabong and is subject to court approval,” says Billabong.

The company says the settlement includes interest, litigation costs and the legal fees of the group of shareholders who took the action.

The company says the payout has already been provided in previous financial reports.

“Therefore there is no impact on Billabong’s immediate or future cash flows or earnings reports as a result of this,” the company says.

The class action was launched in 2015 by 730 institutional and retail investors who bought Billabong securities between February 2011 and December 2011.

Shareholders argued that Billabong misrepresented its earnings forecasts which led to a massive share price fall to $1.70 from $8.51 in 2011.

The popularity of the beach-bum aesthetic has faded in recent years, leaving surf clothing companies, including Billabong and Quiksilver, to reinvent themselves.

The surf clothing group, founded on the Gold Coast in 1973, posted a full-year after tax profit of $4.2 million in August, the first in four years.

In February, Billabong posted a half year loss of $1.6 million but sales grew 7.6% to $561.9 million and net profit before tax was $2.1 million.