OLI Details
 

Oliver’s Real Food Limited

 
Reported EBITDA of $466k in Q1FY20: Oliver’s Real Food Limited (ASX: OLI) operates in the management of Quick Service Restaurants (“QSR”) in Australia under the branding of “Oliver’s Real Food.” The company specializes in fast food alternatives for travellers on Australia’s major arterial highways. As per a recent announcement, the company updated that the 2019 AGM will be held on 29 November 2019. The stock was suspended from Official Quotation in accordance with Listing Rule 17.5, from the commencement of trading on 01 October 2019, due to the failure to lodge the relevant periodic report within the due date. In a recent announcement, the company updated that the securities will be reinstated to official quotation from 06 November 2019, following the lodgement of FY19 Annual Report.
 
FY19 Financial Highlights for the period ending 30 June 2019: OLI declared its full year financial results wherein the company reported revenue at $34.97 million as compared to $35.94 million in FY18. The company reported net loss of $15.66 million as compared to a loss of $0.64 million in previous financial year. Loss during the period was largely due to impairments and write-offs. During FY19, the company reported EBITDA loss of $7.8 million as compared to a loss of $2.7 million in prior corresponding period. During the year, the company identified and closed a number of under-performing stores. At the end of the year, the company reported 25 owned stores across Australia. The company reported total current assets of $3.396 million including trade receivables and inventories at $0.61 million and $1.64 million, respectively. OLI’s plant property and equipment at the end of 30 June 2019 stood at $10.32 million.
 
Q1FY20 Financial Update for the Period ended 30 September 2019: OLI declared its first three months cash-flow statement wherein the company reported $0.221 million used in operating activities, $0.064 million derived from investing activities. OLI reported $0.42 million as net cash from financing activities. at the end of 30 September 2019, the company had a cash balance of $1.154 million. The company also reported a positive EBITDA of $466k for the first quarter of financial year 2020.


Q1FY20 Cash Flow Statement (Source: Company Reports)

Cash Flow Forecast: During the second quarter of FY20, OLI forecasted total cash outflow of $9.43 million, which includes $4.9 million for product manufacturing and operating costs, $3.85 million in staff costs, advertisement and marketing costs amounting to $0.18 million, and administration and corporate costs of $0.5 million.

Stock Recommendation: The stock of OLI is trading at $0.043 with outstanding shares amounting to 250.73 million. The stock has given returns of -2.22% and 46.67% during the last three-months and six-months, respectively. 52-week trading range of the stock stood at $0.019 to $0.120 and currently, the stock is trading close to the lower end of its 52-week trading range. In FY19, the company reported a net loss, largely due to the impairments and write-offs. The company also updated that July 2019 proved to be a positive month that continued through to the end of Q1FY20, reporting a positive EBITDA, aided by strong trading and tight management controls by the company. In FY19, the company had a gross margin of 73.5%, which is higher than the industry median of 51.8%. Considering the aforesaid facts, business prospects and recent price movements, we recommend a "Speculative Buy" rating on the stock at current market price of $0.043, down 2.273% as on 06 November 2019.


 
OLI Daily Technical Chart (Source: Thomson Reuters)

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