Ooh Media sees slight profit increase ahead of anticipated Adshel acquisition

Australia’s largest out-of-home media player, Ooh Media, has increased its net profit after tax (NPAT) from $8.92m in the first half of 2017 to $9.23m for the first six months of 2018.

Revenue for the company climbed from $172.99m to $192.03m for the half – after growth in all segments except retail – while costs associated with mergers and acquisitions fell from $2.14m to $1.59m.

Ooh Media’s revenue from ‘road’ increased 16.4%

Last year, Ooh Media attempted to merge with its closest competitor, and the second-largest player in the out-of-home media space, APN Outdoor.

Despite confidence from CEO Brendon Cook the merger would proceed, the competition watchdog raised concerns about market concentration and the deal was ultimately scrapped.

This year, Ooh Media has instead announced its intentions to acquire street furniture business Adshel for $570m, after a bidding war with APN Outdoor.

The deal is expected to be completed by the end of the calendar year.

In its financial results released to the ASX this morning, the company focused on its underlying results which exclude impairment and acquisition-related expenses, saying they provide a better representation of financial performance in the ordinary course of business.

Ooh Media’s H1 2018 results (Click to enlarge)

Underlying EBITDA (earnings before interest, tax, depreciation and amortisation) increased 11% to $37.9m for the half, while underlying NPATA (net profit after tax before acquired amortisation and non-cash items such as impairments) was up 2% to $14.9m.

The company’s operational expenditure increased by 20% (up from $41.3m to $49.7m), a result, it said, of increased employee expenses associated with technology, creative and sales teams to drive revenue growth.

Over 60% of Ooh Media’s sales revenue now comes from digital, rather than static, billboards.

Revenue from road increased 16.4% to $74.4m for the first half of 2018, compared to the same period in 2017. Fly climbed 18.4% to $29.3m, while locate was up 30.8% to $20.8m. Revenue from New Zealand was $4.8m (up 19.3% from $4m in the first half of 2017).

How each segment performed in H1 2018

Retail declined by 5.2% for the half, down to $53.6m from $56.6m.

Cook said Ooh Media had delivered another strong result, but focused more on the future of the business.

“We are implementing our strategy to invest for future growth,” he said. “As we have said consistently, this year marks a transformation in our business as we build our platform to the next level.

“We are leading the industry in creating a new media business that is driven by data, content and innovation, connecting advertisers to more audiences with the right message, at the right moment and in the right location.”

He added: “The investments we are making in our people, our systems and our network ensure that Ooh is at the forefront of the out-of-home sector in creating a unique platform that delivers the next phase of revenue growth and sustainable value creation for shareholders through delivering results to our clients.”

Ooh Media reports its financial results based on the calendar, rather than the financial, year. Its full-year results for 2018 will thus be revealed early next year.


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