VIL
29/05/2015 08:58
FORECAST
PRICE SENSITIVE
REL: 0858 HRS Veritas Investments Limited
FORECAST: VIL: Veritas provides further market update
NZX Release
29th May 2015
Veritas provides further market update
Veritas Investments Limited (NZX:VIL) wishes to update the market on its
profit guidance. The Board had previously given its profit guidance in the
half year results announcement of 26th February 2015, which followed the
unaudited pro-forma forecasts for the current financial year provided to the
last annual shareholders meeting.
The Board wishes to revise its profit guidance for the year ending 30 June
2015 to $4.3m for underlying net profit after tax for continued operations
(Underlying NPAT) , following a further review of its performance in the
second half of the year. The guidance previously given by the Board in
Veritas' half year results announcement was for $5.3m.
In the Board's view, this gives the best indication to investors of the
performance for the Veritas Group. The pro-forma financial information
provided in the notice of annual meeting dated 10th November 2014 suggested
that Veritas' Underlying NPAT for the year ending 30 June 2015 would be
between $5.3m and $5.8m (or $6.3m to $7.0m before deducting the gain on
acquisition and the transaction costs); and the half year results
announcement noted that this would be at the low end of that range, being
$5.3m.
As announced previously, the key determinants of the full year result will be
the speed at which the Nosh business improves, performance of the BBC sites
in Hamilton, and the medium term effect of the new drink-driving legislation.
Business Trading
In relation to the individual business units:
Mad Butcher
The Mad Butcher business continues to trade to expectations and we envisage
results for the franchisor business to be on target. In April 2015, the first
Mini Mad Butcher store has been opened in Mosgiel and is proving a successful
format. The company will look for open further mini style stores at
appropriate locations around the country. There are 4 Mad Butcher stores held
for sale, which will be sold as franchisees are identified and approved.
Kiwi Pacific Foods
The joint venture company has traded strongly and will achieve results ahead
of target.
Nosh Food Market
The turnaround of the business is progressing well, although is behind
schedule, as extra time has been taken to carefully review the business model
and execute a comprehensive plan to reinvigorate the business.
As a result there will be a loss recorded for this financial year, with
breakeven now planned to be achieved from the second quarter of the next
financial year. The Board is encouraged by the very positive response to the
refurbishment of the Glen Innes store which for Nosh is an important business
blueprint. The new high-profile Pakuranga store is on track to be opened in
the first quarter of the next financial year.
A new management team led by Rod de Vries is now in place and the pivotal
change of the logistics model has now been successfully completed.
Better Bar Company group
As noted in the half year results announcement, the drink-driving legislation
has had some effect on the hospitality sector and the performance of the BBC
sites has been in line with the general industry. As with a similar
experience in Australia, we do expect this to improve as the sector responds
with a more comprehensive lower-alcohol and improved food offering.
BBC has already responded by revamping its food options and launched a
program of providing "restaurant food at pub prices" which is showing
positive results already. While the third quarter results were positive, we
have seen more impact in the last quarter and have factored that in to the
revised guidance.
Business updates going forward
The Board will provide a comprehensive business update in late June 2015 that
will include performance guidance and strategy for the next financial year.
Given the acquisitions during the current financial year, it is difficult for
investors to accurately gauge the future annual performance of the Veritas
Group. Therefore the Board will take the step of providing market guidance
for the full 2016 financial year well ahead of the next annual meeting, so
investors can better understand the Veritas Group as a whole.
Going forward, the Board has also resolved to provide quarterly updates to
the market to assist investors to monitor progress and performance of the
Veritas Group.
-ends-
For further information, contact:
Mark Darrow
Chairman
Veritas Investments Limited
021 88 88 58
[email protected]
About Veritas Investments Limited
Veritas Investments is an NZX Main Board-listed investment company focusing
in the Food and Beverage, Franchise and Hospitality sectors. The shell
company was formed in December 2011 and made its first acquisition of the Mad
Butcher franchisor business in May 2013 through a reverse acquisition
transaction. A further investment was made in December 2013 for 50% of Kiwi
Pacific Foods Limited. In September 2014 Veritas acquired the Nosh Food
Market business. In November 2014 Veritas acquired The Better Bar Company
group business.
www.veritasinvestments.co.nz
End CA:00264995 For:VIL Type:FORECAST Time:2015-05-29 08:58:36