Oliver's Real Food (ASX: OLI) appears to have everything back in place following the return of its founder to the role of CEO in March.
The company was in dire straits before the return of founder Jason Gunn (pictured). Shares were nosediving, profits were slashed, and the company was bleeding out cash.
But it looks as if the group is in a stronger position today, and a profit in 2020 is now on the cards for the healthy fast food chain.
According to a statement released to the ASX, Oliver's has taken stock of its position and performed a "remarkable turnaround", basically eliminating its cash burn.
While things are looking bright for Oliver's, the group will still post a $5.3 million loss at the end of FY18. All of the loss was incurred prior to the actions and initiatives of the current board and the new senior management team, spearheaded by founder Gunn and former Video Ezy franchisor Nicholas Dower.
"The board is confident we have addressed the major issues, and while we continue to drive the business forward, returning to the original culture and focus, seeking improved sales margins and efficiencies, we have a sound platform now from which to work, with positive cash flows expected for the balance of this year," says Oliver's.
Shareholders are ecstatic about today's announcement, with shares spiking by nearly 60 per cent at 1.26pm.
Speaking to Business News Australia, founder and CEO Jason Gunn says the "remarkable turnaround" came from a renewed focus on what made Oliver's a successful company in the first place.
"What's been behind the remarkable turnaround is a real focus on delivering a great experience for our customers," says Gunn,
"The way the previous board had been conducting the business was just reckless spending, it was completely unbridled, and we've rained that in."
"It seems that the previous management saw themselves as a publicly listed company with loads of cash and there was a certain mode of operation, they thought they should have which was everyone on big salaries, new cars, corporate Amex cards, crazy stuff. Those things are being eliminated."
While he modestly refused to take all the credit for the company's turnaround, Gunn says his focus on what made Oliver's a successful company in the first place definitely assisted in returning the group to its strong position.
"My feeling is that you can't run a business like this successfully unless you truly believe in it," says Gunn.
"As founder and the creator of Oliver's I truly believe in this business."
Gunn says a renewed focus on everything from culture to products will realign the company with its main goals something the previous board lost sight of.
"I think at some point the previous management lost their way. They didn't understand that we cater to a particular type of customer," says Gunn.
"If we try and compete with McDonald's, Subway and KFC on price we are never going to win. But if we compete on quality then we can win hands down every day."
A goal to hit profit in 2020 is now at the forefront for Gunn, a goal he is determined to hit.
"We are going to continue to run the business as a relatively small business. We're going to run a tight team of really dedicated people who are completely focused on delivering a great experience for our customers. We want to return to seeing our same store sales growing year on year. In the last 12 months it is the first time in our history that we have ever seen store sales growth go backwards. That is recovering now and recovering quickly."
Shares in Oliver's are up 59.09 per cent to $0.04 per share at 1.24pm AEST.
Business News Australia
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