Failed merger cost APN Outdoor $3.38m, but revenue climbs
The failed merger between two of Australia’s largest outdoor companies may have cost Ooh Media $2m, but in its half-yearly financial results, APN Outdoor has revealed it lost even more – with the almost-deal costing the company $3.38m.
Revenue up, profits down for APN Outdoor in 1H17
Net profit after tax fell 19.3% to $15.759m, with merger transaction costs and impairment of assets – investment in Catch technology trials – affecting the results.
However, the first half of FY17 saw total revenues climb, up 8% to $162.3m.
EBITDA (earnings before interest, tax, depreciation and amortisation) also increased, up 7% to $37.2m.
The biggest area of growth was the billboard category, which grew 20% year on year, to $84.6m.
Other categories fell, with rail suffering the biggest revenue loss, down 10% to $11.6m.
Transit was down 2% to $47.1m and airports were down 1% to $19m.
Digital revenue grew by 27%, from $47.5m in 1H16, to $60.1m in 1H17.
APN Outdoor revenue by category
Depreciation and amortisation climbed from $5.4m last year, to $7.33m this year.
Spend in sales and marketing also increased, up $18.67m from $16.66m this time last year.
APN reported staff costs of $14.2m, up from $12.9m last year, attributing the increase to 17 new roles which were added to the out-of-home company in the past 18 months.
Out-going chief executive, Richard Herring, said of the results: “The first half of this year saw the company continue to grow revenue through the combination of additional digital screens and overall market growth.
“Underlying EBITDA grew slightly less than revenue, as the business invested further in staff to underpin longer-term growth,” Herring said.
Richard Herring announced his retirement earlier this month
“Digital screen revenues continue to represent over one-third of Group revenues, and will continue to grow in line with demand and the company’s focused growth strategy.
“Over the longer-term we see digital sites continuing to deliver greater yields. Notwithstanding the increase in digital screens and associated revenue, classic billboard revenue was resilient and performed better than expected in the first half.”
In August, the company received credit approved signed commitment letters from all members for a new $200m syndicated debt facility agreement.
It includes a three-year $125m facility and a five-year $75m facility. APN also welcomed Bank of China as member of the banking group, in addition to long-term partners Commonwealth Bank and Westpac.
Earlier this month, Herring announced his retirement and departure from APN, after 22 years. His replacement is yet to be announced.
Over the past six months, the company has renewed its Adelaide metro contract, Sydney buses contract, and Tullamarine Freeway contract.
The contracts for Yarra Trams and Metro Trains Melbourne are currently being processed for renewal.
The company expects underlying EBITDA to be in the range of $90m and $95m before the end of the company’s financial year.
APN Outdoor’s market capitalisation as of last Friday was $753.10m.
