Classic billboards critical for oOh! media

Outdoor advertiser oOh! media has reported a 27 per cent rise in FY2018 revenue to $482.6m with the road category, which includes classic printed billboards, accounting for $154.8m of that, up 12.9 per cent on the prior year.

Digital revenues increased by 27 per cent to $288.1m while new acquisition Adshel – now known as Commute – generated $65.9m in fourth quarter revenues with total organic revenue growing by 10 per cent.

Net profit after tax (NPAT) was down four per cent on 2017 to $31.6m due to the Adshel acquisition costs.

oOh! media chief executive officer Brendon Cook said 2018 was a transformational year for the company as it embedded Adshel and its complementary offering of street furniture and rail assets.

He said classic billboards account for 21,000 of oOh!’s inventory across Australia and New Zealand, with digital ad spaces hitting between 10,500 to 11,000 and remaining a critical part of the business.

“Classic inventory is the biggest part of the road assets and classic from our point of view is still a critical component of our business in fact the road classic revenues went up in 2018,” Cook told ProPrint.

When asked if the amount of roadside, street furniture and railway classic billboard space would change, Cook said it wouldn’t change dramatically.

“We see classic as a critical and important component of advertisers building brands,” he said.

“It’s a critical component for local businesses in terms of what they can do and we own Cactus Imaging for two very good reasons. Our ability to influence speed and secondly the ability to invest in green and envionrmentally friendly products for our major advertisers and we’ve got both of those now.”

Highlighting this point road was a key breadwinner for oOh! generating $154.8m in sales revenues up 12.9 per cent, with Retail $132.9m down two per cent, Fly $67.8m up 23.3 per cent and Locate $42.8m up 25.3 per cent.

Revenues generated by wide format printer Cactus Imaging and Junkee Media were classified together bringing in $18.5m, an increase of one per cent for the business.

The company reported gross profit of $225.7m, up 29 per cent on 2017. Operational expenditure increased by 32 per cent on CY17 including Commute’s operating costs and a continued investment in talent and skills in core areas of data science, content, cyber security and client partnerships.

Total underlying EBITDA increased by 25 per cent to $112.m with organic underlying EBITDA growth (excluding Commute) increasing by five per cent to $94.2m.

“The business delivered a number of operational accomplishments this year. Firstly we have continued to grow our road large format revenue base and pleasingly both across both digital and classic formats,” Cook said during the results briefing.

“Second we delivered significant growth in fly and locate as we had said we would when delivering softer than expected results last year in these two formats.

“Third we have extended a number of key contracts during the year with Brisbane City Council for the Commute format and the recently announced Brisbane Airport as the standouts.

“Sixty per cent of our media revenue base is contracted on sites which have leasehold maturities extending beyond the end of 2021 therefore more than three years out.

“Finally we have made significant steps in our integration of Commute.”

The results showed retail declined by two per cent with an overall three per cent decline in Australia being partially offset by double digit growth in New Zealand. It also said the three per cent decline in Australia was an improvement on the five per cent decline in the first half.

http://www.proprint.com.au/News/392626,ooh-media-lights-up-classic-billboards.aspx

Cook says oOh! media is continuing to invest in its operating system.

“We continue our investment in our all-of-business operating system. This is built on advanced machine learning with enhanced technological infrastructure and will enable our clients to leverage our digital sign network and engage with audiences more effectively and efficiently.

“We expect this investment will deliver significant operating efficiencies to oHh!, including optimised property retention, higher sales and margin, and improvements in our staff to revenue ratio.”

oOh! is offering a fully franked final dividend of 7.5 cents per share bringing the full year dividend to 11 cents per share fully franked.

 

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