Oliver's Real Food swung to a statutory profit of $598k in FY2026, reversing a $2.91 million loss a year earlier, driven by store closures and cost discipline. Despite an 8% revenue drop, EBITDAI surged 36.8%, and the company kicked off FY27 with encouraging sales and earnings growth.
- Statutory profit of $598k, reversing prior $2.91m loss
- EBITDAI increased 36.8% to $2.9m on reduced revenue
- Same-store sales rose 4%, operating expenses down 14%
- Closure of unprofitable stores improved cash flow and margins
- FY27 started strong with July EBITDAI up 11%, sales up 3.5%
Turnaround Achieved Through Store Closures and Cost Control
Oliver's Real Food Limited (ASX:OLI) has posted a statutory profit of $598,000 for the 2026 financial year, a remarkable turnaround from a $2.91 million loss in FY2025. This improvement was underpinned by a 36.8% increase in EBITDAI to $2.9 million, despite an 8% decline in revenue to $22.845 million. The company attributes this progress to decisive closures of unprofitable stores, including Pheasants Nest Northbound and both Officer locations, alongside rigorous cost management across its highway network.
Operational Metrics Signal Stabilisation and Efficiency Gains
Same-store sales climbed 4%, illustrating underlying customer demand resilience despite a challenging retail environment. Gross margins held steady at 63.85%, while operating expenses fell by 14.45%, reflecting the leaner cost structure. The closure of loss-making outlets has notably improved cash flow and profitability, with a one-off $114,000 charge related to the Pheasants Nest South store closure in July 2026.
Management highlights that EBITDAI remains the key operational performance indicator, showing sustained improvement driven by focused margin management and cost discipline. This operational pivot has set a foundation for more stable earnings and financial certainty compared to prior years.
Digital Innovation and Marketing Initiatives Drive Growth Prospects
Oliver's continues to invest in technology and customer experience enhancements. The company’s AI-powered ordering platform, 'Ollie', has reduced order times significantly while improving accuracy and upsell rates. This innovation complements an expanded nutrition transparency ecosystem and new product launches such as the Kids Feel Good Meal range, which have bolstered the brand’s healthy fast-food positioning.
Marketing efforts include strategic partnerships with NRMA and the Newcastle Jets, leveraging sports sponsorship and loyalty programs to increase brand reach and customer engagement. These initiatives aim to sustain same-store sales growth and enhance average transaction values without materially increasing labour costs.
Encouraging Start to FY27 Amid Cost Pressures and Lender Support
The new financial year has commenced on a positive note, with July EBITDAI up 11% to $232,465 and same-store sales rising 3.5%. August same-store sales reportedly increased 5%, signalling continued momentum. The company is actively addressing rising labour costs and is rolling out an in-store equipment upgrade program designed to reduce expenses and improve service speed.
Oliver's maintains the backing of its key lenders, including related-party shareholders Michael and Suzanne Gregg and Gelba Pty Limited. These lenders have extended loan maturities and repayment schedules by 12 months, providing critical support amid a net liability balance sheet position. The directors acknowledge a material uncertainty regarding going concern but express confidence in meeting financial obligations given the current cash flow forecasts and lender arrangements.
Strategic Focus on Sustainable Growth and Network Expansion
Having stabilised its core operations, Oliver's is shifting focus from turnaround to disciplined growth. The board emphasises leveraging its profitable highway store network, targeted marketing, sustained cost discipline, and selective new store openings aligned with financial returns. The company is also exploring capital-light partnerships to expand brand presence without significant balance sheet risk.
While the business remains cautious about economic headwinds and consumer sentiment, the combination of operational improvements, digital innovation, and marketing initiatives positions Oliver's for potential sustained profitability and shareholder value creation.
Bottom Line?
Oliver's Real Food has turned the corner operationally and financially, but its ability to sustain growth and resolve going concern uncertainty will hinge on executing cost controls, expanding its core network, and maintaining lender support.
Questions in the middle?
- Can Oliver's maintain same-store sales momentum amid economic uncertainty?
- How will rising labour costs impact margins despite equipment upgrades?
- What are the prospects and timelines for new store openings or partnerships?