Veritas Investments shareholders tried to abandon the company yesterday after the food and beverage investor downgraded its outlook for earnings and said it would not pay a first-half dividend.
The shares fell from 50c to 30c but Craigs Investment Partners broker Chris Timms said the shares had not traded since January 15 until yesterday.
By mid-afternoon 143,000 shares had traded at 30c compared with the 5000 traded on January 15 at 50c.
‘‘No-one likes a downgrade and there has been noise in the markets for a while that things had not been going well. The downgrade just added more fuel to the fire. If investors are not getting paid, they want to abandon ship.''
In a statement to the NZX, the company said its underlying profit, which excluded one-time items, would be between $3million and $3.5million in the year ending June, down from a previous estimate of $5.3million and $5.5million.
Veritas, whose assets include the Mad Butcher franchise, Nosh food stores, Better Bar Company and meat patty supplier Kiwi Pacific Foods, said it would not pay a dividend.
It expected to write down the value of its assets by $5.4million and was seeking a chief executive as it worked with external advisers PwC to review operations and bolster profits.
The company now expected underlying profit of between $900,000 and $1million in the first six months of the financial year ended December 31.
The releases would be released by the end of February.
Veritas was formed in December 2011 through a reverse sharemarket listing with the aim of acquiring high-quality New Zealand retail and consumer businesses.
It said the majority of its Mad Butcher stores were trading profitability, although five stores had consistently failed to achieve budgets.
While two of those might be able to be turned around, the other three should be considered as impaired assets.
Mr Timms the market had been tough for Veritas and yesterday was ‘‘one of those days'' for the company.
