How Oliver’s Real Food Achieved a 192% EBIT Turnaround in Tough Times
Oliver’s Real Food Limited reports a strong September quarter with a 192% EBIT improvement and a positive operating cash flow turnaround, driven by cost efficiencies and strategic store closures.
- EBIT rises 192% to $185k from prior year loss
- Operating cash flow swings positive by $1.145m to $769k
- Revenue declines 4.8% due to store closures and lower royalty income
- Same-store sales increase 3.1%, with 8% growth during school holidays
- Expenses cut by 13.15%, including 9% reduction in employment costs
Strong Profit Turnaround
Oliver’s Real Food Limited has delivered a notable financial turnaround in the September 2025 quarter, reporting earnings before interest and tax (EBIT) of $185,000. This marks a 192% improvement compared to a loss of $201,000 in the same period last year. The company’s EBITDA also rose by 57% to $702,000, underscoring improved operational efficiency.
Revenue Impacted by Strategic Store Closures
Despite the positive earnings, total revenue declined by 4.82% to $5.782 million. This drop was primarily due to the closure of three underperforming stores in Lithgow, Coffs Harbour, and Pheasant Nest North, which collectively reduced sales by $408,000. Additionally, a $58,000 decrease in royalty income further weighed on top-line results. However, when adjusting for these factors, same-store sales actually grew by 3.1%, signaling underlying strength in the core business.
Cash Flow and Cost Management Drive Positive Momentum
The company’s cash flow from operating activities swung dramatically from a negative $376,000 in the prior year quarter to a positive $769,000 this quarter, a $1.145 million turnaround. This improvement reflects the success of cost reduction initiatives, including a 13.15% cut in expenses and a 9% reduction in employment costs, despite one-off redundancy expenses related to store closures. These measures have enhanced financial resilience amid a challenging retail environment.
Customer Engagement and Seasonal Strength
Oliver’s Real Food highlighted that its focus on improving the in-store experience is resonating with customers, as evidenced by an 8% increase in same-store sales during the recent three-week school holiday period, accompanied by a 3% rise in transactions. This seasonal uplift bodes well as the company heads into the busier summer trading months.
Outlook and Financial Position
The board remains cautiously optimistic, emphasizing that the strategy of concentrating on profitable stores while closing unprofitable locations is delivering tangible benefits. The company ended the quarter with $555,000 in cash and cash equivalents and has $13.76 million in financing facilities, with $13.51 million drawn. No interest was paid to related parties this quarter, and directors’ fees amounted to $14,000.
Bottom Line?
Oliver’s Real Food’s disciplined approach is paying off, but sustaining growth amid store closures will be key to watch.
Questions in the middle?
- Can Oliver’s Real Food sustain same-store sales growth as it enters the summer season?
- What are the company’s plans for managing debt repayments starting late 2026?
- Will further store closures or expansions be part of the strategy going forward?
