Veritas, Mad Butcher franchisor, to boost annual dividend as 1H profit falls 6.8 percent

Thursday 27th February 2014

Veritas Investments, which own the Mad Butcher franchise chain, said earnings fell 6.8 percent reflecting a drop in sales and accounting adjustments, while boosting forecast annual dividends.

Net profit fell to $2 million in the six months ended Dec. 31, from $2.2 million a year earlier, the company said in a statement. The decline was in part due to accounting costs not previously recognised.

Revenue slipped 1.2 percent to $14.5 million. Its accounts show a 4.3 percent drop in carcass purchases to $9.4 million.

"We are seeing a shortage of protein available following the 2013 drought and higher meat exports both contributing to domestic supply shortages," Mad Butcher chief executive Michael Morton said in a statement. "We are operating in a tougher retail environment from the points of view of both competitive activity and consumer spend."

The company affirmed forecast of a full-year net profit of $4.2 million and full-year sales of $35.8 million. It will pay an interim dividend of 3.94 cents per share on March 28, with a March 14 record date.

Veritas lifted its forecast dividend for the 2014 financial year to 70 percent of net profit, from an earlier forecast of 60 percent, dependent on the need for cash for further acquisitions. It didn't pay a dividend in the previous year.

The company said it is actively looking for further acquisitions, but is "not currently in any advanced discussions". The Mad Butcher franchisor unit continued to expand, opening three new stores in the period.

The Auckland-based company bought the Mad Butcher in May 2013 in what was effectively a reverse listing, having sold its assets and returned capital to shareholders.

The NZX-listed investment company, which focuses on the food and beverages sector, bought half of Kiwi Pacific Foods in December for $2.8 million in cash and $400,000 in shares at $1.38 apiece, with potential earn-outs if certain export targets are met. The remainder of the business is owned by Antares Restaurant Group, which holds the New Zealand Burger King franchise.

BusinessDesk.co.nz

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