Out-of-home giant oOh!media (oOh!) has grown its FY revenue, EBITDA, and operating margins, as it progressively digitises its assets, shrinking its print component.
The split between digital and classic revenue has grown rapidly over the past three FY results, from 35 per cent digital in 2015, 45 per cent in 2016, with digital now sitting at 60 per cent of total revenue in the company’s most recent results, summarising its FY ending December 31.
The number of print panels is also falling as the company converts sites to digital, last year the company reported some 14,000 classic panels, this year the figure is 12,000. Revenue for oOh! Is up 13.1 per cent from the prior corresponding period, reaching $380.3m for the 2017 FY, which the company attributes to organic growth, digitisation, and acquisitions made in the previous year, Junkee Media and Cactus Imaging.
Brendon Cook, CEO, oOh! says, “Cactus Imaging is performing to our expectations in providing us with supply chain efficiencies in the delivery of classic print outdoor advertising across our network.”
Underlying EBITDA increased to A$90.1m, with a margin expansion to 23.7 per cent from 21.9 per cent, which Cook notes is the highest reported by the company since its public listing. Gross profit increased 21.1 per cent from the pcp, reaching A$175.5m, with a gross profit margin of 46.2 per cent, up from 42.1 per cent in the pcp.
The Road, Retail, and Locate segments of the business all realised double digit growth, 10, 15.7 and 17.4 per cent respectively. Road and Retail delivered 70 per cent of total revenues, which the company accounts to the the increasing digitisation of panels.
The failed merger with APN Outdoor, knocked backed in Australia, represented a loss of A$2m in associated costs, though Cook notes he still believes the out-of-home industry needs further consolidation. He says, “We were the first to digitise, and create interactive panels on scale. Our digital strategy goes beyond screens, it is about integrating networks to deliver a true audience and advertiser led medium.
“We are completing ground breaking campaigns, gaining access to difficult to reach millennial audiences. We are now generating 60 per cent of our revenue from digital, well ahead of the industry average of 47 per cent.
“While the Out of Home sector has performed strongly, we are growing our business faster than the market by continuing to lead the market in delivering innovative solutions for clients to integrate data and content as part of our audience-led strategy across our network.”