Veritas cuts 2018 guidance following Mad Butcher sale
By Sophie Boot
March 19 (BusinessDesk) - Veritas Investments has cut its 2018 guidance after shareholders voted to sell the business and assets of the Mad Butcher franchisor to its chief executive Michael Morton.
On Friday, 98.4 percent of the shareholders, who were entitled to vote and voting on the question, voting in favour of selling the business to Morton, who is chief executive of the Mad Butcher business, director of Veritas and MBL, and trustee and beneficiary of the largest shareholder in Veritas.
Veritas's previous guidance, given at its annual meeting on Dec. 6, was for revenue between $26 million and $29 million; earnings before interest, tax, depreciation and amortisation between $7 million and $8 million; and underlying net profit between $3.5 million and $4 million, for the 2018 financial year which ends on June 30.
"Given the shareholders’ approval for the sale of the Mad Butcher business and the expected completion of that sale on March 23, 2018, the board wishes to restate the guidance for the full FY18 to revenue of $23 million - $24 million, ebitda prior to significant items of $4.2 million - $4.6 million and underlying net profit of $1.5 million - $1.7 million," the company said. "As disclosed previously, the board is considering a number of other restructuring options for the group. Accordingly, this guidance is subject to any write-offs and restructuring costs, if any, that are incurred in connection with the implementation of these initiatives."
Veritas has been selling assets to repay debt it took on to buy a series of businesses since embarking on a strategy of building a food and beverage business with the backdoor listing of the Mad Butcher business five years ago. The company paid $40 million for Mad Butcher, half in cash and the rest in scrip, raising $25 million to help fund the deal. It previously said if approved, the sale proceeds would go to repaying $27 million owed to ANZ Bank New Zealand and leave the Better Bar Co as its sole remaining asset.
The shares last traded at 4 cents and have shed 20 percent so far this year.