Above: oOh!media CEO Cathy O’Connor
Cactus Imaging parent company oOh!media has reported revenue growth of 7 per cent to $633.9 million in the year to December, driven by a 14 per cent increase in the road (billboard) division.
“We delivered a solid result which highlights the financial discipline and operational improvements that are positioning oOh! to capitalise on the continued growth of out of home which remains the fastest growing media segment,” said CEO, Cathy O’Connor.
“The group is developing innovative new revenue streams while remaining disciplined on our approach to renewing existing contracts or winning new contracts. This is expected to strongly position oOh! to retain market leadership and build revenue in a rapidly evolving sector,” O’Connor. said.
The group delivered a statutory net profit after tax (NPAT) of $34.6 million, up 10 per cent on CY22.
oOh! also launched its new reooh division which focuses on retail or instore signage – a market predicted to be worth $3 billion in Australia by 2027. In its first year of operation reooh secured two long term contracts, with one major Australian retailer signing on for a pilot program in Q1 CY24.
In addition, three new contracts were secured (Sydney Metro, Sydney Metro Martin Place and Woollahra Council) representing approximately $30 million in annualised revenue upside from mid-2024.
The Outdoor Media Association (OMA) reports that out of home grew 12 per cent for 2023, or 8 per cent after adjusting for the City of Sydney. Further, out of home continued to outperform other media with 15 per cent growth in agency media spend for the year compared to a 3 per cent decline for total agency media spend.
“Our focus remains on leveraging the structural growth opportunities in out of home to build profitable market share, while also diversifying into new adjacent revenue streams to deliver long-term sustainable earnings growth,” O’Connor said.
Formats
Road
The group’s road (billboard) division delivered a strong result compared to the prior year. Revenue increased by 14 per cent to $218.4 million. Momentum continued into the second half with 2H revenue up 16 per cent compared to the prior corresponding half.
Street furniture and rail
Revenue in street furniture and rail increased by 1 per cent to $197.7 million. Revenue increased in the second half, up 4 per cent on the prior corresponding half, following a decline in the first half which was impacted by the previous introduction of a competitor’s significantly expanded City of Sydney offering in September 2022.
Retail
Revenue in the retail format increased by 2 per cent to $145.2 million compared to the prior year. oOh! expanded its Retail digital footprint by adding 380 new digital panels to more than 44 new and upgraded centres.
Fly
The continued recovery in air travel reflected strong revenue growth in the fly category which increased by 29 per cent to $43.7 million on the prior year. Revenue growth in percentage terms was stronger in the first half when compared to a prior period which was impacted by the COVID Omicron variant which reduced air travel.
City & Youth (formerly Locate)
Revenue was steady on the prior year at $17.7 million. Revenue in the second half grew 10 per cent on the prior corresponding half, reflecting the continued slow return of audiences to central business district office environments. Adjusting for the sale of the café and venue business, revenue on a like for like basis in the format increased by 9 per cent on the prior year
Outlook
The group said its financial position remains strong. The completion of the on-market share buyback increased net debt at 31 December 2023 to $83.8 million compared to $32.9 million as at 31 December 2022. However, net debt has reduced by 25 per cent from 30 June 2023. The gearing ratio (net debt / Adjusted Underlying EBITDA) as at 31 December 2023 was 0.6 times. The company’s target is to maintain gearing not exceeding 1.0 times in the short term.
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