Salt Funds backs Veritas, shares continue to tumble

By Edwin Mitson

Thirty-one Mad Butcher stores are franchised, with two owned by Veritas. Photo / Ben Fraser
Thirty-one Mad Butcher stores are franchised, with two owned by Veritas. Photo / Ben Fraser

Salt Funds Management, which manages $1.6 billion of assets, has lifted its stake in Veritas Investments, taking advantage of a slump in the share price of the Mad Butcher franchisor.

The fund manager bought 648,658 shares for $245,529.74 between September 1 and September 12, suggesting an average price of 37 cents a share and lifting its stake to 8.8 per cent from 7.6 per cent, a notice to the stock exchange shows. Veritas shares sank 9 per cent today to 20 cents and have tumbled since it filed its 2016 unaudited financial results on August 29 when the shares were trading at 47 cents.

Those statements showed the Veritas board had to weigh up if the business was still a going concern, given the uncertainties around the rescheduling of its debt repayments. The documents revealed that ANZ Bank New Zealand had agreed to accept a reduction in monthly loan payments from July to September 2016 to $200,000 from $415,000 but advised Veritas that it would provide a term sheet reflecting a rescheduling of the group's repayment terms.

Last week, Veritas said it had agreed to a deal with its banker, ANZ to reduce repayments and reschedule its debt.

August's results saw Veritas declare an audited net loss of $4.59 million in the year to June 30, compared to a profit of $3.33m a year earlier. Total losses from significant operations, operations held for sale and discontinued operations was $7.75m.

Three Mad Butcher stores were closed due to consistent unprofitability, while trading was affected by supply shortages and a "very competitive" market. The original Mad Butcher store was liquidated in July, with the liquidator Peter Jollands saying the business model was flawed and unsustainable.

Shares in Veritas have fallen 54 per cent since the start of the year.

- BusinessDesk

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