Oliver’s Real Food Ltd (ASX:OLI) has appointed a new chief executive officer while also reaffirming fiscal 2018 underlying earnings guidance.
The news has been well received by investors with the company’s shares hitting a high of 26 cents, representing an increase of nearly 20%.
On the management front, Gregory Madigan will take over as chief executive officer from founder Jason Gunn.
Madigan has excellent credentials with over 25 years’ experience in the quick service restaurant (QSR) industry.
Madigan brings global knowledge
He was most recently UK country director for Subway, the largest fast-food operator in the world.
Subway UK is the largest market globally outside North America.
During his tenure with Subway UK, Madigan expanded the network of restaurants by 608 stores to 2,350 stores.
Understands the local market
Prior to that, he was general manager NSW/ACT for Subway, overseeing significant growth of both store count and same-store sales.
Earlier in his career, Madigan was a senior executive of Black Stump Char‐grill restaurants, a business similar in size to Oliver’s today.
This added experience of understanding how to grow a business from the ground up should prove beneficial in his role at Oliver’s.
The company took the opportunity today to reaffirm prior fiscal 2018 earnings before interest, tax, depreciation and amortisation (EBITDA) guidance of $4.76 million.
First half provides strong start to 2018
Oliver’s generated revenues of $17.6 million in the six months to December 31, 2017, up 93.3% on the previous corresponding period.
Another strong performance indicator in relation to the underlying strength of a retail business is same-store sales growth as this monitors growth in established stores.
It is important to be generating growth from the existing businesses as growth by store rollout generally tapers as market saturation increases.
Oliver’s performed well on this front in the first half, delivering same-store sales growth of 5.7%.
During the period the company opened six new company-owned stores and still managed to finish the half with cash of $2.3 million.
There was also a healthy increase in margins from 65.7% to 75.6%.