Ooh Media revenue down 34% in CY20 but Q4 showing recovery

Ooh Media Limited (Ooh Media) has reported a decline in revenue for a heavily COVID-impacted year ending 31 December 2020 (CY20). The leading Out-Of-Home (OOH) provider increased its market share in ANZ, maintaining its #1 position, but saw revenue decline by 34% to $426.5 million.

In its ASX announcement today, Ooh Media admitted that 2020 had been a “challenging year”, but pointed to the company implementing a series of measures to strengthen its financial position and reduce its cost and capital expenditure base by over $120 million.

Ooh reported underlying EBITDA of $63.2 million in CY20 compared to $139.0m in CY19, and an underlying NPATA4 loss of $8 million compared to $52.4 million in the prior corresponding period. Net loss after tax was $35.7 million for the year.

Net debt at 31 December 2020 was $111 million; a reduction of $243 million from 31 December 2019.

Ooh Media CEO Cathy O’Connor

In terms of Ooh’s products, commute declined by 37%, road was down 19%, and retail fell 24%. Fly was severely impacted, declining 65%, while Locate was also badly affected by movement restrictions and working from home, down 68%.

Ooh Media CEO Cathy O’Connor said the company has managing the challenging conditions well, despite being part of a sector that was impacted worse than most.

“The unprecedented restrictions on people movement and resulting audience decline impacted Out of Home more severely than other media segments. In response, Ooh acted quickly and decisively to maintain and strengthen our competitive position.

“That included a $167 million equity raising, refinancing of debt facilities, negotiation with property partners to deliver $63 million in net fixed rent savings, capital expenditure reduction of $49 million and operational cost savings of $16 million (excluding JobKeeper).”

O’Connor explained that during 2020, Ooh “adapted and refined our offer to advertisers, leveraging the strength of our suburban and regional network. The Company also continued to invest in our network assets, including key digital sites such as Military Road in Mosman.

“The company remains focused on margin growth through the recovery cycle by achieving rent reductions beyond 2020, delivering structural cost savings approaching $10 million annual run rate achieved at the end of CY20 and remaining disciplined on capital expenditure.

“As a result, Ooh has strengthened its capacity to manage in the current environment while remaining well positioned to leverage the audience and revenue recovery already evident across our key formats.”

Ooh’s premium large format site on the Gold Coast

Ooh Media showed significant signs of rebound in Q4 across key formats as restrictions upon movement began to easy, with revenues at 70% compared to the same period in 2019. That was up from the previous quarter, where revenues were at just 57% year on year.

The areas of the business leading this recovery have been road, retail, street furniture and New Zealand, with revenue in Retail and NZ already over 90% compared to the prior corresponding quarter.

Early signs for 2021 have been positive too, with Ooh reporting that total revenue for January 2021 pacing at 80% of January 2019, with Road, Retail, Street Furniture and NZ revenue levels close to 100% of the prior year.

O’Connor said: “Out-of-home is a highly effective medium to deliver impactful national broadcast reach in all markets during this period and beyond.

“The company saw this through the COVID-19 pandemic with our network playing a pivotal role in public messaging for government agencies and regulatory authorities. Equally, the company continued to deliver ground-breaking and award-winning campaigns for advertisers, leveraging the diversity and scale of our market leading inventory across formats and geographies.

“Our strategy remains focused on capitalising on the key structural drivers of growth in out-of-home and leveraging our diverse product portfolio, backed by data, to deliver results for advertisers.

“We are uniquely positioned to help drive the out-of-home industry’s share of overall media spend to around 10% in the next few years.”

Having announced at the time of the equity raising on 26 March 2020 that the board would temporarily suspend future dividends, no dividends were payable for CY20.

Ooh Media says its board will revisit this decision in future periods based depending on market conditions, and with consent of the lenders.


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