Veritas sells Nosh, meeting ANZ's sell-or-close deadline

Veritas chairman Tim Cook

Veritas Investments has sold its food market business Nosh Group for $3.98 million, meeting lender ANZ's revised deadline to sell or close the money-losing chain.

The NZX-listed company, which also includes the troubled Mad Butcher chain and and eight bars in Auckland and Hamilton in its stable, announced this afternoon it has entered an unconditional agreement with Gosh Holding to sell the business and assets of Nosh as a going concern. Companies Office records show the newly-formed Gosh (it was registered at 11.23am today) is 100% owned by the Sydney-based Andrew Guy Phillips.

The purchaser has agreed to assume Nosh’s trade creditor liabilities under this transaction.

The sale price included about $1.055 million of stock, with payment due on February 10.

Veritas says the sale proceeds after adjustments will be used to repay the group’s bank debt to ANZ.

The company took on a $5 million funding line with ANZ to buy the Nosh stores in 2014 but struggled to turn the gourmet supermarkets into a profitable business. 

Lingering questions
The company’s announcement to the NZX did not indicate Gosh’s intentions with the brand, what the lease liabilities are, or what will happen with the two franchised Nosh stores.

Veritas was in dispute with its Constellation Drive franchisee, which took down its Nosh signs and refused to take Nosh vouchers after the brand got into trouble. Veritas said it did not accept the franchisee’s attempted termination. At this point, the two franchisee stores are not part of the deal, which covers the six company-owned stores.

Veritas chairman Tim Cook indicated he would speak to NBR tomorrow morning.

Veritas 2-year share price history (NZX.com)

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.

More to come.

 


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18 Comments & Questions

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No mention of the lease liabilities? Will be interesting to see whether any liability remains with Veritas.

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I have been highly critical of the management etc but have to say well done on getting this sold. $4m and (hopefully) no ongoing obligations or liabilities is a pretty good outcome from where they were. so points for the last minute effort shame about the first 79 minutes.

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I am sure shareholders will eagerly look forward to a dividend in 2018 - or maybe 2019 if it takes more than a year to keep the ANZ happy.....

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Dividend - Tell them he's dreaming

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Dividend - haha whatever. They still owe 28M due to be repaid by November. Dividends are a pipe dream

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Mr. Andrew Guy Phillips, BBS served as Secretary of Sequoia Financial Group Limited (alternate name MDS Financial Group Limited) since June 26, 2012 until December 28, 2016. Mr. Phillips served as Company Secretary of Southern Cross Exploration NL from July 15, 2014 to December 2, 2014. He served as Chief Financial Officer of MDS Financial Group Limited since July 20, 2012. He served as an Acting Chief Financial Officer and Company Secretary of MDS Financial Group Limited ...

From Bloomberg.

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Well he'll know a lot about smoked salmon, pastrami & pumpernickel bread ! These stores need more than a numbers boy.

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Good work

Andrew Philips is the company secretary of Sequioa Financial
But the shareholding is in his own name not Sequoia's
Looks like a personal investment not a corporate investment

Good luck to the guy - hope it works out well for him

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Was the purchase funded by ANZ?
What is the consideration - cash, vendor finance, unlisted stock?

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Andrew Phillips tells NBR he's the front-man for a group of NZ-based investors. More tomorrow...

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Gosh

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Veritas will be relieved they got this sold. Investors are optimistic judging from a modest spike in the share price around 4:45pm today. Keen to see what Gosh of Nosh does with the stores. Mr Phillips clearly thought long and hard about his purchase.

"What shall I name my company?" Mr Phillips thought. "What rhymes with Nosh? Gosh!" he amused himself. "Ah yes! I can see it in shining lights already - "Gosh buys Nosh"" he quipped. "Honey, I've got the name for the company.."

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That's great. They only have to change one letter in the signage.

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turning a pigs ear into a silk purse......Veritas are true magicians ! Imagine if the new owners make it work ?????

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Surely not a silk purse OMBE - here's a recipe for you!

Crispy pig's ears with nasturtium and caper tartare sauce
by Simon Hulstone
Canapé Easy 4 3 hours
Simon Hulstone's crispy pig's ears recipe offers a frugal twist on pork scratchings, complete with a floral nasturtium tartare sauce. Feel free to double or even triple this recipe and keep the crispy pig's ears in an airtight container for 2-3 days. Hulstone uses broken up pork scratchings as part of the crumbing mixture for added crunch.

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odds on Veritus will be mince meat before the end of the year....excuse the pun.
The mad butcher set up is about as micky mouse as it gets.
They can not survive because they can not turn a profit.
It is all to do with the bunch of sombies running the place.
How on earth they were able to rack up millions in bank debt and still not show a profit has to said it is nonsense.

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The new buyers apparently have plans to take this loss-making formula across the Tasman..

And Moa have acquiring Lion on their dashboard..

Bill English thinks he has the charisma to be PM..

What a year we have ahead !

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and have you walked in to a Palmers garden centre lately & wondered where the plants/flowers were ? it's all homewares & fancy jams these days [even Weber BBQ's]

My gawd have the thirtysomething girls they get in there [buying/marketing/fluff] have something to answer for.

Or their bosses you say.. so do i

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