Oliver’s Real Food Limited reported a 70% increase in EBIT for the June 2025 quarter, driven by cost-cutting and operational improvements, despite a nearly 6% decline in revenue due to store closures and external factors.
- EBIT improved 70% year-on-year to $302k
- EBITDA turned positive at $356k versus negative $247k last year
- Revenue declined 5.97% to $5.768 million due to store closures and weather events
- Expenses cut by nearly 14%, including 20% reduction in employment costs
- Ongoing restructuring and store rationalisation to enhance profitability
A Turnaround in Profitability
Oliver’s Real Food Limited (ASX – OLI) has delivered a marked improvement in profitability for the June 2025 quarter, reporting a 70% increase in earnings before interest and tax (EBIT) compared to the same period last year. The company’s EBIT rose to $302,000, a significant turnaround from prior losses, while EBITDA swung from a negative $247,000 to a positive $356,000.
These gains come despite a 5.97% decline in revenue to $5.768 million, reflecting the impact of strategic store closures and external challenges. The company closed two stores in Lithgow and Coffs Harbour, which accounted for a $335,000 revenue reduction. Additionally, an extreme rainfall event in May and a shift in Easter timing also affected sales.
Cost Discipline and Operational Efficiency
Oliver’s Real Food’s improved earnings were underpinned by a disciplined approach to cost management. Total expenses fell by nearly 14%, or $645,000, driven largely by a 20% reduction in employment costs. These savings reflect the company’s ongoing restructuring efforts and efficiency initiatives implemented over the past year.
The company’s management continues to focus on negotiating better supply agreements and enhancing store performance. The Board has signalled a willingness to take tough decisions, including further store closures if necessary, to ensure a sustainable and profitable business footprint.
Cash Flow and Financing Position
Cash flow remains positive, with net cash from operating activities at $409,000 for the quarter and cash and cash equivalents standing at $209,000. The company maintains access to $13.46 million in financing facilities, mostly secured, providing a buffer to support ongoing operations and restructuring.
Notably, no interest was paid to related parties during the quarter, and directors’ fees amounted to $24,000. The company is also engaged in constructive discussions with landlords to improve store conditions and reduce costs, which may yield benefits in coming quarters.
Looking Ahead
While the trading environment remains challenging, Oliver’s Real Food’s results suggest that its restructuring and cost reduction strategies are beginning to bear fruit. The Board remains cautious but optimistic, forecasting further improvements in profitability as these initiatives continue to take effect.
However, the final assessment of store impairments by auditors is still pending, which could influence future financial results. Investors will be watching closely for confirmation that the company’s leaner footprint and operational focus can deliver sustained growth.
Bottom Line?
Oliver’s Real Food’s turnaround is underway, but upcoming impairment reviews and ongoing store rationalisation will be key to sustaining momentum.
Questions in the middle?
- What will be the outcome of the pending auditor impairment assessments and their impact on profitability?
- How will further store closures affect revenue and brand presence in the medium term?
- Can ongoing landlord negotiations materially reduce operating costs and improve store environments?