Veritas sees annual profit rising as much as 28% in 2016, after from 2015 downgrades

Wednesday 24th June 2015

Veritas Investments, the listed food and beverage investor, anticipates annual profit will rise as much as 28 percent in the 2016 financial year, getting to where it thought it would be in the current year before it cut guidance.

The Auckland based company, whose stable of investments include the Mad Butcher franchise, expects net profit between $5.3 million and $5.5 million in the year ending June 30, 2016, up from the $4.3 million anticipated in 2015, it said in a statement. Veritas downgraded the 2015 outlook last month, having previously seen earnings of $5.3 million in February, and a range of $5.3 million to $5.8 million at the November annual meeting.

In February, the company posted a 16 percent decline in first half profit to $1.7 million as acquisition costs mounted during a buying spree.

The company’s shares last traded unchanged at 69 cents, having slumped 45 percent this year.

In today’s update, Veritas said it planned to generate revenue of between $86 million and $92 million in the 2016 financial year, excluding Kiwi Pacific Foods, which is a 50 percent owned joint venture. If that’s included, revenue is forecast to be around $100 million over its four businesses.

The main contributor is Mad Butcher, with forecast revenue of between $32 million and $34 million, while Better Bar Company Group is expected to bring in between $25 million to $28 million and Nosh Food Market is forecast to show sales of $28 million to $30 million.

Chairman Mark Darrow is stepping down at the end of this month with Tim Cook taking over as acting chairman while a board review is undertaken.

Veritas said the key focus for the Mad Butcher this year is opening further 'Mini Mad Butcher' stores following the launch of the first smaller format store in Mosgiel.

Better Bar, purchased in November last year, is changing a number of sites to drive higher outdoor patronage although more focus on food offerings is delivering positive results, the company said.

Nosh Food Market, which was bought for $1.3 million in September last year, is progressing well with a business turnaround, including a successful re-launch of its VIP programme and a new store opening in Pakuranga, Auckland, in August.

Last month, Veritas responded to media reports about the financial health of its Mad Butcher brand by saying the liquidation of four of its franchisee operated budget meat outlets this year was “coincidence”. Since the start of the year the Massey, Glenfield, Rotorua, and Kapiti Mad Butcher stores have gone into liquidation with all but Rotorua returning to Veritas ownership.

BusinessDesk.co.nz

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