APN holds classic revenues steady

APN Outdoor has increased its revenue through digital media, while classic revenue held steady in its FY17, and is still the company’s major revenue earner.

The total revenue for the company, $342.9m, is up four per cent from the prior corresponding period (pcp). Classic (print) makes up $214.3m, falling one per cent from $216.9m last year, accounting for 62 per cent of total revenue.

To put that in context with the other major wide-format/signage players, oOh! now gets 60 per cent of its revenue from digital, while QMS is now 66 per cent digital.

Digital, which is 38 per cent of total revenue, across 125 screens, increased 13 per cent from the pcp result, now sitting at $128.6m from $114m.

Underlying EBITDA is up four per cent, to $90.3m, which CEO James Warburton notes is within the company’s guidance range, albeit on the lower end.

Starting his role on January 22, this is the first FY report delivered by Warburton, who made the move over from leading the V8 Supercars, having been an executive at Channel 10 before that.

Warburton says, “The FY17 result was a credible outcome in a challenging environment.

“Digital billboard conversion rollout continues with 20 to 25 new Elite digital screens to be commissioned in FY18. Capital expenditure for FY18 is expected to be in the range of $25m-$30m.

“Following the successful retention of a number of key contracts, APN Outdoor has low contract renewal exposure, in the single digits, in FY18 and FY19.

“APN has a clear strategy going forward, focused on the evolution of APN Outdoor as we shift to become an audience-led, sales centric media business.”

The company’s statutory NPAT is down 9 per cent, to $44m, after non-recurring items are taken into account, including a failed merger with oOh!media in 2017.

APN’s billboard segment grew by 10 per cent, from $160.8m in 2016, to $176.7m in 2017. The company attributes the result to digitisation, and the full-year impact of acquisitions. Transit grew by one per cent, reaching just above $100m, which the company says is a strong result given current lack of digitisation opportunities.

The company notes it has retained its Tullamarine Freeway, Sydney Buses, Adelaide Metro, Perth rail and billboards, and Metro Trains Melbourne contracts, leaving its contract maturity profile to single digits in 2018 and 2019.

APN acting CEO and former CFO Wayne Castle has now left, and follows Richard Herring out of the company. Herring, the former CEO, left in September.

On the changes to the company hierarchy, Warburton says “Subsequent to the year-end the business has moved to both streamline and strengthen the management team. The company now has a flatter structure with seven direct reports to the CEO, all with clear accountabilities.

“We expect to announce a new CFO shortly.

“In addition, we are conducting a search for a new and important position of Chief Innovation and Strategy Officer, enabling the company to fast track ambitions for their products and transformation into data intelligence, location based targeting and enhanced capabilities.”

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