Outdoor advertising giant oOh!media has reported a 10 per cent drop in net profit after tax to $52.4 million for 2019, with outgoing CEO Brendon Cook putting the slump down to the federal election and a flat media market across the board.
Total revenue for the year inched up one per cent to $649.6 million with the first three quarters dealing the biggest blows to the business with the fourth quarter marking a turnaround for the digital and classic signage specialist.
The Road category, which includes printed signage billboards, took the biggest hit with a five per cent decline in revenue to $146.6 million. This was made up for with five per cent rises in each of the Commute (bus shelters) and Retail divisions raising $234.8 million and $139.1 million in revenue respectively.
Cook, who is set to retire once a suitable replacement is found as part of an ongoing global search, said last year’s slump came from nowhere and was worse than the GFC in 2005.
“We always expected the election to be a downer but if you look at media markets, and not just us, in general in July and August the media market was down more than the GFC and no one could have picked that and no one saw it coming or recognised it was coming,” Cook told Sprinter after delivering the FY results on Monday.
“Even in late June and early July they weren’t certain what was going on. So we have to get back to making sure clients realise that advertising builds brands and building brands builds sales and great creativity is needed to bring sales. There is nothing better than great creative printing and great creative design on billboards or bus shelters printed or digital.”
Cactus Imaging, which handles all the wide format printing for oOh!media, had a strong year despite the external pressures, Cook said.
“From our point of view Cactus Imaging has had a great year, a very strong year for Cactus. We are starting to see clients starting to understand the difference of how they use digital and how they use the classic signs so from a printing point of view the big challenge we are always working to is speed,” Cook said.
“Clients always want to make late decisions so we have got to make sure our printing and on street execution are constantly being improved with speed as the priority.
“We hope that as the market comes back and usually it means we will see a bit more campaign planning which hopefully means a bit more production requirements for all printed products in the Classic inventory area.”
Cook said oOh!media’s Smart Reach programme which was launched in October 2019 is starting to show its worth with 80 customers now using the digital tool that helps decide the best position to place digital and printed boards based on mobile data use.
“Smart Reach starts to help us to explain to clients the mix of products and where they need to be. It then comes back to a location so it takes away a view of someone just arbitrarily saying can you give me a digital sign and the reality is they may need a mixture of both to reach their audience and it gives you a chance to explain that better,” Cook said.
“We have seen about 80 clients take up Smart Reach programmes so far since October last year and as we educate and as clients start to see the results we know they are getting a great return so we need to get more using it so they too can get that return.”
The fallout of the Coronavirus had also not yet hit oOh!media, Cook said.
“At this point it is too early for us to say if there is an impact. It can only rollout as people understand if they have got supply chain issues and that is not apparent for us as yet.”
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