Oliver's Real Food Ltd (ASX:OLI) has signed an agreement to acquire Jax Café, which is strategically located on Hume Highway in Euroa, Victoria for a total cost of A$1.6mln.
Oliver’s business strategy is to accelerate the roll out of new stores along the arterial highways of Australia’s eastern and southern seaboard.
A key benefit of this roll out strategy is economies of scale.
The new store location has been selected for its traffic flows, ease of access, location of other quick service restaurant outlets and the location of Oliver’s kitchens and service routes.
Importantly, Jax Café is expected to generate an annual revenue of circa A$1.7mln and an EBITDA of A$0.35mln in its first full year.
Oliver’s plans to own and operate circa 33 stores by the end of FY2018 and over 60 stores within the next few years.
The company listed on the ASX on 21 June 2017 after raising A$15mln by way of an initial public offering, at A$0.20 per share.
The company already has two mln customers each year, and is forecasting a revenue of circa A$42mln in FY18, and a net profit of A$2.4mln.
The growth of the fast food market, investment in highway infrastructure and the growing awareness of healthy food choices are expected to provide a bright future for Oliver’s.