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Mad Butcher owner Veritas shares slump

NZ Newswire logoNZ Newswire 31/08/2016 Edwin Mitson

Shares in Veritas, the listed hospitality group which owns the Mad Butcher franchise and the Nosh food markets, have slumped 17 per cent after its unaudited full-year results showed heavy losses and a board weighing up whether the business is still a going concern.

Today's sell-off is on low volume, with just two trades worth $1,638 accounting for the decline. The share price fall takes the company's market capitalisation to just $16.8 million, less than half its debt of $33m.

In its full-year results to the end of June, posted on Monday, Veritas declared an audited net loss of $4.59m in the year to June 30, compared to a profit of $3.33m a year earlier. Total losses from significant operations, operations held for sale and discontinued operations was $7.75m.

Three Mad Butcher stores were closed due to consistent unprofitability, while trading was affected by supply shortages and a "very competitive" market. The original Mad Butcher store was liquidated in July, with the liquidator Peter Jollands arguing the business model was flawed and unsustainable.

Sales at the Mad Butcher stores fell to $9.8m from $12.1m.

The Nosh food market's performance was also described as "disappointing." In April, it said it planned to franchise the existing Nosh stores.

The company also revealed it was in talks with its bank, ANZ, over the terms of its debt and the uncertainties over the scheduling of debt repayments created uncertainty about whether the business was a going concern.

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