ANZ calls time on Veritas

ANZ bank has pulled the plug on Mad Butcher owner Veritas Investments, declining to renew its loan facilities when they fall due in October and November.

The company told the stock exchange the bank’s decision had cast a material uncertainty over its ability to continue as a going concern.

“The directors are working through a number of options which may include the potential sale or merger of the business units with external parties to the group, or recapitalisation and/or refinancing of the group with alternative banking arrangements, or some combination of all of these,” the company said.

Veritas directors, led by chairman Tim Cook, expressed confidence that one of the options could be executed and that the bank would support it during the process.

Veritas owes $28.5 million to the bank, of which $27.6 million falls due by November.

The announcement was contained in the company’s full-year results statement which featured a net profit from continuing operations of $4.1 million, based on revenue of $30.8 million.

Discontinued operations, including the Nosh grocery chain and some Mad Butcher stores, contributed losses of $4.9 million, producing an overall net loss of $0.8 million.

Veritas now comprises two businesses, the Mad Butcher franchise and the Better Bar Company.

Of the two, the bar business was the best performer, generating earnings before interest, tax, depreciation and amortisation of $5.9 million from revenue of $23.6 million. Veritas said all its bars were profitable and those in the viaduct/waterfront area of Auckland had strong patronage from the Lions tour and increased tourism.

The Mad Butcher franchise reported ebitda of $3.7 million from revenue of $7.2 million. There are 31 Mad Butcher stores in the group, of which Veritas owns three. Veritas managing director Michael Morton owns a further five stores, in Mt Roskill, Manukau, Upper Hutt, Napier and Dunedin.

Veritas said it had repaid debt during the year of $4.8 million.

The company’s shares last traded at 15c, valuing its equity at $6.5 million.