The stockmarket’s “dining out” sector has been chewed up and spat out in recent times.

Investors can be forgiven for steering clear of the theme after the trouble Oliver’s Real Food (ASX:OLI) and Retail Food Group have been through recently.

But the sector could be worth another look based on recent data.

The Australian restaurant scene, which IBISWorld pins as a $20.1 billion industry this year, is actually one of the few retail sectors seeing seasonally adjusted sales growth.

In April restaurant, cafe and takeaway food spending was up 1.3 per cent while other sectors like clothing fell, Bureau of Statistics data shows.

The average Australian household is spending $2,160 on fast food each year, more than $700 on cafes and $1,400 a year in restaurants, according to a 2017 sector overview by Intermedia.

Then there’s the food delivery market, which Morgan Stanley estimates will soon grow to $2.5 billion in Australia alone.

The ASX offers a range of stocks related to restaurants or their supply.

Here are ten stocks that could benefit from a growing market for dining out:

ASX code Company Six-month price change Price Jun 13 Market Cap
GRB GAGE ROADS BREWING 0.206896551724 0.105 91.4M
DMP DOMINO'S PIZZA 0.119016536118 51.43 4.4B
CKF COLLINS FOODS 0.0203327171904 5.52 651.1M
MCA MURRAY COD AUSTRALIA -0.0857142857143 0.064 25.9M
CSS CLEAN SEAS SEAFOOD -0.174603174603 0.052 88.4M
OGA OCEAN GROWN ABALONE *(listed Nov 2017) -0.179487179487 0.16 28.7M
AS1 ANGEL SEAFOOD *(listed Feb 2018) -0.2 0.16 20.1M
OLI OLIVER'S REAL FOOD *(listed Jun 2017) -0.305555555556 0.125 27.7M
BEE BROO -0.510204081633 0.12 73.0M
RFG RETAIL FOOD GROUP -0.766260162602 0.575 99.6M

 

Retail Food Group (ASX:RFG) has been in the news for all the wrong reasons this year as franchisees brought stories of distress to the public. The Gloria Jeans and Michels Patisserie operator’s share price has slumped from $5.07 one year ago to 56c this week — a drop of 88 per cent.

Olivers Real Food (ASX: OLI) launched on the ASX with a quest to turn fast food healthy, but a couple of profit downgrades over the past year have caused it hassles. In the March quarter it booked $10.1 million in sales, a decrease of $400,000.

The gorilla of the sector Domino’s Pizza (ASX:DMP) has also had a rocky time after a stellar share price run two years ago. It has, however, been able to show investors it increased network sales in the first half of this year, up more than 7 per cent to $1.25 billion. The pizza maker’s share price is up 14 per cent over the past six months, now sitting at $51.30.

KFC operator Collins Foods Limited (ASX:CFK) has also shown revenue growth, up 14 per cent in the first half of the year to $322.1 million, having also launched KFC stores into the Netherlands and Germany in the past year.

Thirsty diners have an interest in craft beer, and Fremantle business Gage Roads Brewing (ASX:GRB) is up 185 per cent over the past year, from 3.5c to 10c. Its products are in thousands of retailers and restaurants. The business generated $2.1 million in cash after selling $15.3 million worth of beer in the March quarter.

Mildura-based Broo Ltd (ASX:BEE) has seen less share price love over the past 12 months, dropping from 27c to 12c over the past year. It sold $954,000 worth of product in the March quarter and in a shareholder update last month confirmed it has commenced distribution into China. Sales of Broo products through the Mildura Brewery  Pub and Sorrento Brewhouse have been a bright spot, the company said.

Oyster grower Angel Seafood (ASX:AS1) listed in February after an $8 million IPO with shares at 20c and the stock is sitting at 16c this week. It is a sustainable oyster farming play and the company says makes it one of two operators in this category worldwide. In the March quarter, it received $225,000 from customers, a number which is lower than expectations for other quarters given this is the time of year oysters spawn.

At the end of April Kingfish producer Clean Seas (ASX:CCS) unveiled a high-tech, super-sized rapid freezer to snap-freezes fish for export in just 22 minutes. It also outlined sales had increased by 23% in year-to-date Q3 FY18 terms. Clean Seas was at 4.2c a year ago, this week it’s sitting at 5.2c.

Ocean Grown Abalone’s (ASX:OGA) year-to-date sales were up 231% at the Q3 mark of FY2018, selling 30.8 tonnes of the stuff. In Q3 the company netted $313,00 in customer receipts, with $9 million in cash on hand.

Murray Cod Australia (ASX:MCA) says it sold 247% more product in Q3 of this year than the same time in 2017, receiving $926,000 from selling pond-grown cod. The business is focused on maintaining its position as a producer of a “high quality, luxury food product” – and reported it has exported small quantities of the fish to Asian nations this year.

BONUS STOCK

Dragontail Systems (ASX:DTS) is focused on bringing machine-learning to restaurant processes with its Algo software, which integrates with a pizza quality-control camera that lets you watch your meal as it cooks. 

A year ago, it was sitting at 30c — this week it’s at 14c.