Aussies have entered the new year on a healthy note as nutritional quick-service eatery Oliver’s Real Food (ASX: OLI) reported sales of $2.6 million in December 2022.
Its unaudited earnings for December were $231k on sales of $2.6 million with the Oliver’s responding to the ASX’s regulatory requirements asking the Company to report monthly cash flow data while seeking reinstatement to the ASX where OLI shares have been suspended since January 2021.
Cash flows from operating activities were $372k for the month and $632k for the December quarter. Though the numbers are yet to be audited, the Board advises that its working capital in December improved by a further $171k and over the first six months of the FY23 financial year by $1.9 million. This is a crucial statistic for the Company given the thin ice it is standing on with ASX.
The Company has had a very rocky couple of years with people all but giving up on the healthy food chain given the lengthy suspension of its shares by the ASX. With the Company’s working capital at negative $2.8 million, ASX was worried about what was coming. To appease the ASX, Oliver’s was asked to maintain a minimum working capital of $1.5 million, which, at the time, was running at a negative $2.8 million.
So, in June 2021 (following 14 weeks of trading suspension on ASX), the Company announced its restructuring and reinvention plans. Its first appointment was—rather aptly—of a new chartered accountant, Robert Lees. In November 2022, it appointed a new CEO, Natalie Sharpe, previously the head of supply chain and product. Then, it announced a debt restructuring plan.
Even in the first quarter of FY23, Oliver’s was struggling to get its finances to ASX-satisfactory levels. For the first two months of the 2023 financial year, its unaudited EBIT represented a loss of $49k. Since then, however, across the first five months of FY23, its working capital has improved by $1.7 million, as has its EBIT.
The Company’s sales momentum has carried into the New Year, with the same number of stores reporting sales of over 32% on last year. Oliver’s Food to Go (its service station arm) total sales were $426k, and the Company earned $38k in royalty.
Like-for-like store State-wise performance has also improved considerably since 2021. New South Wales and Victoria sales are up 18 per cent and 40 per cent respectively; however, Queensland sales are down 13 per cent.
At the end of the period, Oliver’s holds over $470k in cash.
Though Oliver’s performance has improved since 2021, it is yet to match its 2019 numbers. For instance, compared to 2019, the state-wise performance of its like-for-like stores is quite bleak. New South Wales, Victoria and Queensland are all down 7%, 12% and 19% respectively.
There’s a lot on the line for Oliver’s with each monthly update (mandated by the ASX). Earlier this year, it attempted to have the suspension lifted but was denied. ASX is still skeptical about the Company’s financial position and has asked for an independent expert’s report on Oliver’s working capital and financial situation and whether the Company can hold its own in the coming year.
Oliver’s must show, before February 27, 2023, via its first half FY23 results that its financial performance has improved, comprising positive operating cash flow, an unmodified audit report, and positive operating cash flow for January 2023. Or else, it risks being delisted.
Can Aussies’ growing healthy eating habits help Oliver’s remain listed or does doom lay ahead?
Alinda is a Business Reporter for The Sentiment
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