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OLI - Oliver's Real Food

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Oliver's Real Food owns and operates a fast food chain of stores at 20 locations along the arterial highways of Australia's eastern seaboard, principally New South Wales and Victoria.

The majority of food and beverages sold is prepared by Oliver’s company-owned kitchens with the balance provided by independent third party contractors. Over 90% of the products are Oliver's branded.

In addition, the Company has a 75% interest in a wholesale business called "Red Dragon Organics", that distributes specialised drinks products through Oliver's stores and to over 500 retailers and cafes in metropolitan centres.

It is anticipated that OLI will list on the ASX during June 2017.

https://www.oliversrealfood.com.au
 
I had a look at the prospectus. It looks very risky.

The business is forecast to report a loss for FY2017 and lacks a historical track record of profitability. In FY2015 and FY2016 it was abnormal items that made the company profitable, if you look at operating profit the company was also loss making in both of those years. For a company that is well established and with so many stores this is worrying.

Additionally even if you assume that Red Dragon organics will only break even in FY2018 and contribute nothing to profit then the forecast profit per store (company NPAT divided by total number of stores) will be somewhere around the $100,000 mark. That is less than much, much lower than what a typical fast food store makes. If you assume that Red Dragon organics would be profitable than it will look even worse.

A lack of track record, low projected store profitability as well as they fact they are trying to compete directly with giant corporations like McDonalds, KFC, Dominos, etc are all worrying signs. I think steer clear of this is the best course of action.
 
Value Hunter said:
I think steer clear of this is the best course of action.
Click to expand...

Wise words.

OLI has tanked today after revising FY18 sales revenue down to $36-37 million, which means they expect to earn $8 million this quarter, down from $10 million last quarter.

Unsurprisingly, its share price has more than halved today and is currently trading at 11.5c, down 53.06% from its last traded price of 24.5c. Ouch!

big.chart-OLI.gif
 
Bunch of nutters, anti-vaxxers, homepathic medicine supporters, cancer quack cures....
 
Look out below! It's been a terrible 12 months for Oliver's Real Food and things seem to be getting worse.

Yesterday's Trading update and revised FY2019 Earnings Guidance was not encouraging reading. FY2019 sales revenue is now expected to be in the range of $34 million to $38 million, which in turn is expected to generate an FY2019 EBITDA loss of between $1.0 million and $4.0 million.

Store closures and cost reductions are part of the company's a cost rationalisation plan which is expected to deliver approximately $1 million in cost savings progressively in H2 of FY2019.

OLI has dug itself into a big hole and it looks like it's going to be very difficult to dig itself out.

big.chart-OLI.gif
 
for clarity (too late to edit)
... talking those "special" shares coming up ......
trade the trade
 
A new addition to the ASX 30Pos portfolio (was 40Pos) is OLI. This was a recent addition to my watch list after the second price spike. These spikes in price coincided with the release of two shareholder letters from the Chairman. These letters are worth reading if you're interested in the company. No doubt OLI has been a dog since listing. New mgt are hoping to turn things around.

oli1306.PNG
 
@aus_trader 's timely Potential breakout post piqued my interest in learning a bit more about the situation here and it seems like board transparency might be an issue to making any investment decision.

An activist shareholder owning 14% (Gelba) agitating for the addition of independent directors that may well be representing Gelba interests and a company that's shown a history of destroying shareholder value raises some red flags.

Founder & Chair; Jason Gunn owns some 18%. The deferral of the AGM until 2021 on the excuse of COVID is a bit lame too. Something is afoot behind the closed boardroom doors...
 
kenny said:
@aus_trader 's timely Potential breakout post piqued my interest in learning a bit more about the situation here and it seems like board transparency might be an issue to making any investment decision.

An activist shareholder owning 14% (Gelba) agitating for the addition of independent directors that may well be representing Gelba interests and a company that's shown a history of destroying shareholder value raises some red flags.

Founder & Chair; Jason Gunn owns some 18%. The deferral of the AGM until 2021 on the excuse of COVID is a bit lame too. Something is afoot behind the closed boardroom doors...
Click to expand...
Yes I agree @kenny , there's some politics to the company board that is concerning. If they can resolve the differences which are pulling it in different directions, I think it has a good story and potential to be something significant one day... Time will tell...
 
Olivers Real Food was never a real business. Made the founder and managers some money I guess, so not all bad :xyxthumbs

Screenshot_20210226-144845_Drive.jpg
 
I thought they just won a major partnering deal with one of the fuel station mobs.

Very hard to tell the difference between a future star and a dud I guess :banghead:
 
Hi, Im new to this forum but wanted to try it out. Re Olivers, I have been a fan of the idea for years but not of the way it has been run. Still, it has survived (even though currently delisted). I have watched it closely and they had a disastrous expansion into unprofitable locations that was too quick and wasted huge funds and goodwill, the CEO and founder Jason Gunn resigned, Greg Madigan ex of UK subway took over, the business nearly went bust, Jason Gunn, to his credit (though he was stilla major shareholder) came back , brought in a new team and saved the business. Then the fires and then covid were a disaster. They were still looking ok with share price rising until the lockdown of Dec 2020 losing their busiest period of trade and now, they are delisted from asx. Currently new mgt have a plan to save the business. If it relists, then it means the asx believe they are stable and they will likely be a good investment and the price will drop from last of 5.9c to around 3 and then hopefully shoudl rise. Thats if they open. I hope they do as our family love road trips and stopping to have a break with reasonably healthy food options. cheers
 
I am hoping for the same. The actual business idea is a good one, an Aussie healthy alternative to fast food.

Not sure if there are others that even come close ? Maybe Subbies, those six-inch and foot long ones.
 
i do not hold this share , but an interesting insight into market conditions
 

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