APN Outdoor grows profit by 13% as take-over by JC Decaux is approved
On the same day that the competition watchdog has approved the mergers between Australia’s out-of-home media companies, APN Outdoor has announced an increase in its net profit after tax (NPAT) of 13% – up to $17.8m – for the first half of 2018.
Rival Ooh Media announced its first-half NPAT earlier this week, which was up 3% from $8.92m to $9.23m.
APN Outdoor looks set to be acquired by JC Decaux
APN Outdoor’s revenue for the first half of calendar year 2018 was up 4%, from $162.3m for the first half of 2017 to $168.4m.
Ooh Media for the same period grew its revenue 11% from $172.99m to $192.03m.
APN Outdoor’s revenue growth can be attributed largely to growth in digital, which climbed 18% to $71.0m. Its classic billboards declined 5% to $97.4m. Digital revenue now accounts for 42% of APN Outdoor’s total revenue, up from 37% in the first half of 2017.
The company grew its revenue in all sectors, bar transit, which declined 6% to $44.5m. In October last year, APN Outdoor and Yarra Trams ended their agreement.
APN Outdoor’s first-half financial performance
Rail grew 1% to $11.7m, airport increased 2% to $19.3m and roadside billboards was up 10% to $92.9m.
In the first half of 2018, the company spent $2.532m on restructuring, up from $1.779m for the same period last year.
Sales and marketing costs for go-to market initiatives climbed 13%, up from $17.6m to $19.9m, while direct marketing costs climbed 31% to $2.1m.
Staff costs were also up 6% to $15m.
APN Outdoor’s performance across its different formats
CEO James Warburton, who joined the business in January, said the company had acted quickly to turn around its fortunes and there is now clear momentum across all parts of the business.
“Today was have reported strong earnings growth, underpinned by solid revenue growth and a prudent cost management program,” he said. “We have achieved a 100% strike rate in terms of contract renewals and we have also secured several significant new contracts. At the same time, we have invested in our people and in leading innovations such as Dn’A.
“The turnaround has culminated in the proposed JC Decaux transaction, which is a major success for all APN Outdoor shareholders.
“The team remains focused and will continue to drive results for the coming half.”
APN outdoor reaffirmed its guidance for underlying EBITDA for the 12 months to 31 December 2018 is expected to be $92m to $96m.
Its previous guidance on capital expenditure was $25m to $30m, but this has now grown to $30m to $35m, reflecting growth capex requirements of new tender wins.
The company said it had low contract renewal exposure this year and next.
Mumbrella believes Warburton will remain with APN Outdoor until JC Decaux has taken over.
