VIL - Veritas Investments Limited

[winner69]

Quarterly update
https://www.nzx.com/files/attachments/247198.pdf

All seems on track - even Nosh is reducing it's losses

On a PE of 2.5 - CHEAP AS, REALLY CHEAP

Will contact PSE / HE about this - seems like a company he be after

[winner69]

Nothing like a good stoush ....esp before a judge

http://www.stuff.co.nz/business/8646...veritas-claims

'Thou shalt not say bad things about Mad Butcher"

[winner69]

All looking good. From ASM

https://www.nzx.com/files/attachments/248300.pdf


Feel sorry for the " high performing managers" who might be talked into becoming potential franchisees.

[winner69]

Apparently not many happy faces at ASMs

ASMs are necessary evils that directors and senior mansgers have to endure - before they carry on as per usual the next day

http://www.sharechat.co.nz/article/d...erformancehtml

[Beagle]

John Hawkins is a bright guy and bang on the money. The fact that VIL is even considering further bar opportunities after the unmitigated mess they have made of ALL acquisitions to date makes the suggestion of further acquisitions absolutely laughable. The only interesting new thing here is that ANZ want to see a proposal to address their balance sheet structure by February. We all know how that ended for PPL don't we !

[bottomfeeder]

General Accounting Practice is to write off goodwill ASAP. If Vertias did this they would be insolvent.

[Snoopy]

General Accounting Practice is to write off goodwill ASAP.

Years ago in NZ (before we joined the international accounting rule set) goodwill was written off over an extended period (IIRC it was ten years, although no doubt a real accountant can correct me on this). Nowdays there is a profitability projection test applied to assets acquired and the goodwill associated with those acquisitions. If projected profitability is insufficient, then that acquisition goodwill is written down to a level consistent with expected profitability.

AFAIK, no accounting practice to write off goodwill 'asap' has ever existed.

If Vertias did this they would be insolvent.

Solvency would most likely be determined by some kind of EBITDA to net interest bill covenant.

SNOOPY

[bottomfeeder]

And here we have the problem. The international accounting standards board in 2014 made the following reccomendations. If the company amortised its goodwill as soon as possible, all investors would be under no apprehension as to the viability of the company. Maintaining goodwill paid on the purchase of businesses based on the return on investment creates a false sense of value. No doubt the sale of the unprofitable "better bars" included goodwill on purchase, and was only written off after the sale or after they were decided upon that they were not profitable. If they wrote off the goodwill investors would be more informed about what sort of company they are actually buying into. We should differentiate between goodwill paid on the purchase of a business and other intangible assets that have slightly more tangibility.

As a result of its analysis, the Research Group concluded that
reintroduction of goodwill amortisation, would be appropriate, because it reasonably reflects the consumption of the economic resource acquired in the business combination over time, and can be applied in a way that achieves an adequate level of verifiability and reliability. In addition, the Research Group concluded that further improvement should also be considered in the area of disclosure requirements.
Chapter 5 provides the Research Group’s observations if the IASB decides to reintroduce the amortisation and impairment approach. Specifically, the Research Group provides a brief analysis on whether to modify the current requirements of separating intangible assets from goodwill and to extend amortisation to other intangible assets with indefinite useful lives.

[bottomfeeder]

As an added note, the management of the finances of this company was doomed from the beginning. When a company borrows money from external credit to fund intangible assets, it is treading water only. This is evident from the share price falling from $1-30 to 20 cents in over a year. The bank owns more of this company than the shareholders, yet is still making a profit. What a conundrum. Doesnt need much for this to go pear shaped very quickly. Once the bank decides it has had enough, the value of the goodwill will just disappear. Therefore any profits the company had made should have gone towards reducing the debt used for the purchase of goodwill. No dividends should have been paid since the IPO. The goodwill should have been written off as soon as possible. Realistically until the debt incurred to pay for the goodwill is paid off the company has not made a profit at all. If this was the scenario presented when at the IPO and subsequent business purchases would everyone have invested in the company. Now I think that would have been prudent management, and then investors would not be worrying about the loss of their investment. The share price may have dropped initially, after the IPO but would now have recovered to over $2-00, and without the worry of the bank stepping in.

[Beagle]

The hound hereby offers his consulting services to Veritas or the International accounting standards board to endlessly pontificate on such intangible matters at a fee of $400,000 per annum