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Oliver’s warns of profit downgrade

Oliver's-Real-FoodHealthy fast food chain, Oliver’s Real Food, has warned investors it will miss the fiscal 2017 targets last confirmed on its prospectus forecast.

The ASX newcomer said revenue would be $20.4 million, a decrease from the forecast $21.1 million while earnings before interest, tax, depreciation and amortisation would be negative $2.55 million compared to a forecast loss of $1.94 million in June.

Net profit after tax is expected to be a loss of approximately $3.18 million rather than the forecast loss of $2.385 million, on revenue of $20.44 million compared to the forecast $21.09 million.

The company’s shares have taken a hit after the forecast.

After a healthy June debut on the ASX, Oliver on Monday back-pedalled on its prospectus forecast.

The world’s first fully organic’ fast food chain has reported lower net sales, delayed store openings, inventory adjustments and unexpected one-off costs will impact its full-year results.

Oliver’s, whose 20 outlets along NSW and Victorian highways offer salads, cups of green beans, rice nuggets and freshly squeezed juices, has claimed a three per cent share of the $1 billion east coast highway dining market that is led by McDonald’s, KFC and Hungry Jacks.

The gluten-free and organic fast food chain, which estimates two million customers visit its outlets each year, previously forecast revenue of around $42 billion in the 2017/18 financial year, and a net profit of $2.4 million.

On Monday, it said its 2017/18 guidance remained unchanged, with plans to add 40 outlets on highways in South Australia, Victoria, NSW and Queensland over the next four years,.

Shares in Oliver’s at 1356 AEST on Monday were down 14.4 per cent at 28.25 cents – down from a peak above 43 cents in mid-July but above their 20 cent issue price.

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