Six Nosh stores on Trade Me as ANZ's sell-or-close deadline looms

UPDATE: ANZ has extended its sale or close deadline until Jan 31, while Veritas says it is in dispute with its Constellation Drive franchisee and refusing to recognise his termination of their agreement. Details here.

Veritas's attempt to sell Nosh is coming down to the wire.

The NZX-listed company, which also includes the troubled Mad Butcher chain and and eight bars in Auckland and Hamilton in its stable, has until Sunday to present ANZ with a deal.

On December 13, Veritas revealed the terms of a revised debt facility with ANZ required it to deliver an unconditional contract to sell Nosh by January 15 or failing that a proposal to wind down and close it.

Either way, Nosh must be off the Veritas books by March 31.

Today, there was something of an end-times feel, with readers (see Comments below) variously reporting that Nosh Ponsonby is running down stock, Nosh Mt Eden has been cash-only since Monday and that Nosh Constellation Drive (one of two franchisees) has taken down its sign (replacing it with Constellation Food Market) and is refusing to take Nosh vouchers. 

A quick jaunt to Costellation Drive confirmed signage had been removed. NBR took a bottle of Lewis Rd Creamery milk to the counter (only later noticing it was expired). The til operator refused a $5 Nosh voucher and used sissors to snip the Nosh logo off the receipt. Franchisee Phil Mead refused comment.

There are eight stores in the Nosh chain, six owned by Veritas and two by independent franchisees.

This morning, Veritas chairman Tim Cook told NBR he had "nothing to report" on the Nosh sale process at this stage. He did not answer a follow-up query about the status of the Constellation Drive store (earlier, the chairman said a group sale would include the two franchised outlets).

In mid-December comments to NBR, Mr Cook said: "As a result of the announcement we had a significant number of people call us yesterday who haven’t talked to us before, interested in purchase of Nosh as a group."

However, as of early this morning, the six company-owned Nosh outlets were listed individually on Trade Me Property.

They range in price from $400,000 (for Nosh Matakana) to $1.2 million (for Nosh Mt Eden, situated about half way down Dominion Rd). The prices do not include stock, which is offered "at value."

One obvious buyer, rival upmarket foodstore chain Farro, tells NBR it is not interested.

The parent company of one of the franchises at Constellation Drive in Mairangi Bay, Makan NZ, was placed into receivership on December 6. However, a new franchisee was installed just days later, the chairman says.

Veritas bought the Nosh chain for $1.3 million in September 2014 but the business has not been profitable. At the time, the company said it owed ANZ $5 million.

For the year to June 30, Nosh reported revenue of $22.5 million and an operating loss of $1.9 million.

The outlet on Constellation Drive on Auckland's North Shore, where Nosh signage has been removed (Chris Keall; click to zoom). Constellation Drive is shop — or was — one of two franchisees in the eight-store chain (the other is in Mt Maunganui). The six company-owned stores up for grabs on Trade Me are all in Auckland, bar one north of the city in Matakana.

Veritas' debt
At its June 30 balance date Veritas had bank debt of $33.3 million, including a $5 million facility from ANZ that was used to fund its purchase of Nosh.

Of that, $33.3 million $16.6 million was required to be repaid by June 2017 and $13.5 million by November 2017.

Revenue would be in a range of $50-55 million in the year ending June 30, 2017, compared with $56.5 million last year, the company said today.

Of that 2017 revenue, its Nosh Food Market unit was expected to deliver between $22-23 million , compared with $22.5 million in 2016. Sales at its Mad Butcher stores would fall to between $7-8 million, from 2016's $9.8 million, and The Better Bar Company would have sales of $21 million to $24 million, down from $24.1 million.

Veritas reported a full-year loss of $4.6 million for 2016 compared with a profit of $3.3 million in 2015. Its underlying net profit from continuing operations was $3.16 million.  Its 2017 underlying profit guidance is $3-3.6 million.

The company says revenue will be in a range of $50-55 million in the year ending June 30, 2017, compared with $56.5 million last year.

ANZ was not immediately available for comment.

Veritas shares were flat at 20c this morning. The stock is off 60% over the past year.