Oliver’s Real Food Faces Going Concern Warning Despite Profit Turnaround
Oliver’s Real Food Limited has reported a statutory net profit after tax of $995,000 for the half-year ended December 2025, marking a $1.82 million turnaround from the previous loss. This improvement comes despite a 6.5% revenue decline, driven by strategic store closures and disciplined cost management.
- Statutory net profit after tax of $995k, reversing prior loss
- 6.5% revenue decline due to underperforming store closures
- Same-store sales growth of approximately 4.8%
- EBITDA up 64% to $1.73 million on lower cost base
- Cautious optimism for FY26 H2 amid economic challenges
A Strategic Turnaround Amid Revenue Pressure
Oliver’s Real Food Limited has delivered a notable financial turnaround in the first half of FY26, reporting a statutory net profit after tax of $995,000 compared to a loss of $826,000 in the prior corresponding period. This $1.82 million improvement underscores the company’s commitment to strengthening its core operations despite a 6.5% decline in total revenue to $12.05 million.
The revenue dip largely reflects the company’s deliberate exit from underperforming stores, a move that, while reducing top-line sales, has enhanced the quality of earnings and improved profitability metrics. Oliver’s management has focused on rationalising its store network to prioritise locations that deliver sustainable returns.
Driving Profitability Through Operational Discipline
Same-store sales growth of 4.8% during the half-year signals improved customer engagement and operational execution. This growth was supported by targeted promotions and a sharper focus on the in-store experience, which helped offset the impact of a smaller store footprint.
Cost discipline has been a cornerstone of Oliver’s turnaround strategy. The company achieved a materially lower cost base through reduced labour and occupancy expenses, alongside ongoing overhead efficiencies. These efforts translated into a 64% increase in EBITDA to $1.73 million, highlighting the operating leverage gained from a streamlined business model.
Financial Position and Going Concern Considerations
Despite the improved profitability, Oliver’s balance sheet continues to reflect net liabilities, with current liabilities exceeding current assets by over $5 million. The company’s auditors have flagged a material uncertainty regarding going concern, primarily due to this liquidity position. However, the board remains confident in ongoing lender support, including from major shareholders Michael and Suzanne Gregg and Gelba Pty. Limited, who have extended credit facilities and committed to not demanding repayments within the next 12 months.
Cash flow generation has strengthened, supported by tighter working capital management and improved trading conditions, which provides a buffer against the challenging economic environment marked by rising interest rates and constrained consumer spending.
Outlook: Cautious Optimism and Growth Opportunities
Looking ahead, Oliver’s management expresses cautious optimism for the second half of FY26. Early trading data shows continued same-store sales growth of 4.75%, reinforcing the momentum gained in the first half. The company’s strategic focus remains on profitability and cash generation, with an eye toward growth opportunities through commercial partnerships that align with its healthy food brand ethos.
While macroeconomic headwinds persist, Oliver’s more resilient and profitable store network, combined with improved operating leverage and lender backing, positions the company to navigate ongoing challenges and potentially expand its footprint in a disciplined manner.
Bottom Line?
Oliver’s Real Food’s leaner, more focused model has delivered a profit turnaround, but sustaining momentum amid economic pressures will be key to its next chapter.
Questions in the middle?
- Can Oliver’s maintain same-store sales growth as economic pressures intensify?
- What impact will rising interest rates have on consumer spending at Oliver’s stores?
- Will the company pursue new commercial partnerships to drive growth beyond its current footprint?
