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Veritas shareholders vent spleen at AGM

NZ Newswire logoNZ Newswire 17/11/2016 Fiona Rotherham

Disgruntled Veritas Investments shareholders fired a salvo of questions over poor performance and the tanking share price for the group, which includes the Mad Butcher, Nosh, and Better Bar Company brands, at Thursday's annual meeting in Auckland.

Veritas has said it is on track to meet 2017 guidance after first quarter trading, with revenue expected to be lower than last year at between $50 million and $55m and underlying net profit in the range of $3m to $3.6m.

In August it reported a full-year loss of $4.6m, compared with a $3.3m profit the prior year.

John Hawkins, chairman of the New Zealand Shareholders Association, questioned whether Veritas was simply at the mercy of its bankers, given its high debt levels, and expressed concern that 66 per cent of its assets were intangible and would have no value if the company was no longer able to keep on as a going concern.

He accused the board of "glossing over" a lot of serious issues.

Chairman Tim Cook, who was re-elected despite some shareholder criticism, said the company enjoyed a "strong relationship" with its banker, ANZ.

It made a deal in September to reschedule and reduce the group's debt repayments. The deal includes the board preparing a plan to address its capital structure by the end of February and it can now only issue dividends with the bank's approval.

The strategy to restore profitability included finding a new point of difference for the Mad Butcher stores, seven of which had closed, with beef prices up 28 per cent over the past two years and intensified competition from supermarkets.

With the Nosh food supermarkets, the board is relying on selling eight company-owned stores to franchisees, who Cook said historically perform better than employees in lifting sales.

With the Better Bar Company, the only division that is performing well, three loss-making bars in Hamilton were sold and the remaining eight were trading profitably.

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