Outdoor giant oOh! Media’s revenue and gross profit have both soared with double digit growth in the year ending Dec 2016.
The company’s revenue jumped by 20.1 per cent to $336.1m, up from $279.8m in the previous year, its gross profit rose to $144.9m, an increase of 30.3 per cent.
Brendan Cook, CEO, oOh! media says, “Our performance highlights the benefits of our diversified portfolio of assets, we firmly believe this positions the company for continuing growth. Importantly, the products are increasing benefiting from greater coordination of campaigns and the network effect across multiple media environments and channels.”
[Related: oOh! to merge with APN outdoor]
Digital media drove the skyrocketing growth, however Cook believes classic print panels are still key to the business with print bringing in $143.8m in revenue for the half year making up 42 per cent of the total revenue.
“Like for like classic inventory was relatively flat which is an improvement on the year prior where it was down by mid-single digit figures,” Cook says.
“Classic inventory will continue to rebound as it did in 2016 as advertisers understand how to mix classic and digital campaigns and also as revenue continues to grow in the sector. As we see campaigns become shorter and more flexible and more creative unmissable ideas, we are seeing strong print sales.
“During the year, oOh! Media acquired leading printing and production company Cactus Imaging. The acquisition strengthens our core business and will allow oOh! Media to recognise several supply chain efficiencies in the classic print outdoor market,” he adds.
oOh! Media’s capital expenditure increased to $39m, from $28m during the second half of 2016, and it is expected that the increased spend in digitising assets and developing its systems will continue to have a positive impact on revenue and earnings going forward.
Nearly half of the total revenue was made up through the digital market. This year digital revenue came in at 45.6 per cent, last year 31.9 per cent. The company now has more than 8,000 digital and 14,000 classic panels across Australia.
Cook says, “Our physical assets, combined with engaging content and the ability to provide growing connections through online, mobile and social media, is why advertisers are increasingly finding our offering compelling compared to other advertising mediums. As we further our data and analytics capabilities, the solutions we develop will drive further value for our clients through research and reporting of measurable outcomes.”
[Related: oOh! deal to target outdoor consumers]
The underlying EBITDA of $73.5m is up 27.4 per cent, with the underlying EBIDTA margin of 21.9 per cent up from 20.6 per cent.
The acquisition and integration of Executive Channel Network (ECN) to expand CBD audience, Junkee Media to expand publishing and content capabilities and Cactus Imaging to strengthen core printing, production and supply chain efficiencies for classic billboards
Road revenue is $124.6m, up 12.3 per cent, this is due to a momentum of new assets installed in late 2015 and 2016 including 29 large format screens installed in premium locations. The retail revenue of $109.2m is up 10.2 per cent, this is attributed to 39 large format digital Evoke screens and 200 plus ShopaLive screens. The fly revenue of $56m is up 2.8 per cent, replacing revenue loss by T3 Sydney tender loss. These figures are due to a part year development in securing wins and asset rollouts at T4 Melbourne and Brisbane virgin Australia domestic terminal.
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