- The Board of Directors at Oliver’s Real Food (OLI) has signed off on a restructure of the struggling food business
- The restructure will differentiate between the company’s Oliver’s Real Food and Oliver’s Food to Go businesses
- Changes will include a centralised food preparation location, outsourced product warehousing and delivery, and third-party product manufacture and distribution
- The company expects the majority of the restructure to be implemented by June 2021
- Oliver’s Real Food has been suspended from trading by the ASX, and last traded at 5.9 cents per share
The Board of Directors at Oliver’s Real Food (OLI) has signed off on a restructure of the struggling food business.
The company has attributed many of its struggles to the combined impacts of the Australian bushfires and the COVID-19 pandemic, which posed a serious challenge to the resilience of its current operating model.
The proposed restructure of the business is intended to simplify and streamline the business model, with a view to returning to profitability.
The restructure will differentiate between the company’s two major business aspects — Oliver’s Real Food and Oliver’s Food to Go. Oliver’s Real Food represents the company’s stores and franchises, while Oliver’s Food to Go represents its retail convenience offering.
Changes to the Oliver’s Real Food business will include cost-saving measures, which will be achieved by centralising food preparation into a single kitchen facility based in Brisbane.
Additionally, Oliver’s Real Food will outsource its product warehousing and delivery to a third-party logistics company. The logistics company will have a national footprint, allowing it to reach all Oliver’s Real Food outlets.
Changes to the Oliver’s Food to Go business will aim to improve financial outcomes, by moving from a fixed to a variable cost operating model. The business will transition the manufacturing and distribution of its product range to a third party, under a royalty payment model.
The changes to Oliver’s Food to Go business should become effective by the end of April 2021.
The CEO of Oliver’s Real Food, Tammie Phillips, expects that the company’s financial performance will improve after the restructure plan is implemented.
“Now having spent some months analysing the business model with my team and considering various options, I am confident this restructure plan – which seeks to simplify the business model – is the best way forward for the company,” she said.
“Our budget projections currently show that the company can be profitable in FY2022. Further, the new simplified operating model will allow us to turn our attention to revenue growth and execute our customer-oriented growth strategy plan,” she added.
The company expects the majority of the restructure to be implemented by June 2021.
Oliver’s Real Food is currently suspended from trading by the ASX and last traded at 5.9 cents per share. However, the company and its auditors are currently working with the ASX to resolve the matter.