Veritas, the NZX-listed company that owns the Mad Butcher franchise, Nosh and Better Bar Company, has posted an audited net loss of $4.59 million in the year to the end of June 2016, 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. Of this, $5.77m was recognised in the first half of the year.

The losses stem from the end of its Kiwi Pacific Foods venture, which supplied beef patties to the local Burger King franchise operator, Anatares Restaurant Group, a joint partner in the venture.

The deal broke down last year and was going through the courts before the two parties agreed to sell the assets.


A loss of $2.9m was recognised against this, while write-offs relating to the Mad Butcher cost it $2.35m.

Three Mad Butcher stores were closed during the second half of the year because they were "consistently unprofitable". In a statement, the company said the market was currently very competitive "with supply shortages creating challenges around product choice and pricing".

Veritas said the majority of stores were trading profitably but earnings before interest, taxation, depreciation and amortisation (ebitda) fell 28 per cent to $4.57m.

Thirty-one Mad Butcher stores are franchised, with two owned by Veritas for which the board is considering "a range of options".

The performance of its Nosh Food Market was described as "disappointing".

There are eight stores in the gourmet food chain, six in Auckland, one in Matakana and one in Mount Maunganui but full year ebitda loss widened to $1.88m, from $1.19m the previous year.

The Auckland-based company said the board was making a substantial effort to "focus on gross margins, stock levels and operational improvements to bring the business back to profitability".

In April, it announced plans to franchise the existing stores and is currently working through a short-list of potential operators.

Veritas's Better Bar Company exceeded its expectations, with ebitda jumping to $5.5m from $2.95m the previous year, with three unprofitable Hamilton bars closed in December 2015 at a cost of $339,692.

No dividend was declared.

Shares in Veritas were unchanged at 47c and have fallen by 2 per cent since the start of the year.