I don't think it matters which way you do it, but wages need to...

I don't think it matters which way you do it, but wages need to land between 25%-35% of sales. I remember baulking at OLI, even though I really liked the idea and thought the food was pretty good, because the food was quite expensive and the wages bill up around 45%. Even allowing for some head office overhead in that employee expense it was difficult to see how they would ever make money – they needed to drop food prices, but there was nowhere for them to absorb that on the cost side.

The last "clean" HY report (ie no bushfires, no covid, no floods) is from HY19. Food+Labour as a % of revenue in that half was 27%+55%=84%. To me it seemed if they couldn't get their labour costs down, and as I said their restaurants had the organisation of a Bunnings sausage sizzle, then they just didn't have any slack on the food side to absorb a price increase. Fast forward to the last HY and we see 38%+34.5%=72.5%. Still on the high side, but these costs have been cut at a time that anyone selling food has been dealing with some pretty savage food inflation, so credit where credit's due, imo. They've obviously tried to cushion some of the food increases with the wage savings.

I'd like to see a bit more of this progress before I'd consider buying, but it seems as though at long last there is some hope for these guys. Early days. You guys who have held on deserve some good news. You've certainly earnt it!