APN Outdoor digital screens now represent a third of its revenue half year results, with digital revenue up 27 per cent, while print, or static, or classic revenue remains stable.
Richard herring, outgoing CEO of the outdoor giant says, “Classic billboard revenue was resilient and performed better than expected in first half.”
In the APN Outdoor half year results revenue is up 8 per cent to $162.3m from previous year, its underlying EBITDA is up 7 per cent to $37.2m, underlying NPATA is up 4 per cent to $21.4m, while its statutory NPAT is down 19 per cent to $15.8m, after $4.1m of non-recurring items.
During the half year 16 Elite digital screens were added, bringing total to 103 at June 30. Transit initiatives implemented following an intensive marketing project, its National XTrack TV network complete late in the first half, and APN had credit approved term sheets for new $200m senior debt facility.
APN says it successfully renewed a number of contracts including its Tullamarine Freeway contract, Sydney Buses, Adelaide Metro contracts and recently agreeing on a multi-year extension to the PTA contract in Perth.
[Related: APN renews bus contract, CEO retires]
Herring says, “The first half of this year saw the company continue to grow revenue through the combination of additional digital screens and overall market growth. Underlying EBITDA grew slightly less than revenue, as the business invested further in staff to underpin longer-term growth.
“With 16 new screens added to APN Outdoor’s portfolio over the first half, the company now has 103 elite screens across Australia and New Zealand. This high-quality portfolio of large format digital screens is the most comprehensive on the market.
“Digital screen revenues continue to represent over one-third of group revenues, and will continue to grow in line with demand and the company’s focused growth strategy. Over the longer-term, we see digital sites continuing to deliver greater yields. Notwithstanding the increase in digital screens and associated revenue, classic billboard revenue was resilient and performed better than expected in first half.
“So far this year we have successfully renewed three key contracts; the Tullamarine Freeway, Sydney State Transit contract for Sydney uses and the Adelaide Metro contract. The Sydney Buses contract was renewed on improved financial terms to the company and continues to be a valuable asset in our transit portfolio.”
The APN net debt on June 30 was 1.1 times last 12 months’ EBITDA, last year it was one times. APN says this comfortable gearing level, combined with the new $200m senior debt facility, supports the company’s future expansion and product development opportunities.
The APN board is progressing a formal process to appoint a new CEO, as Herring will step down on September 30.
APN says based on the first half results, the performance of the business over the first seven weeks of the second half, and assuming current market conditions continue, the company expects 2017 underlying EBITDA to be in the range of $90m to $95m and plan to invest between $30m and $35m of capex in 2017.
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