OOh!media posts a strong 2023 with net profits up 10%
Out of home (OOH) player oOh!media has released its results for the year ended 31 December 2023, reporting a 7% bump in revenue off the back of growth across all OOH formats.
Revenue was reported at $633.9 million, with net profit after tax at $34.6 million, up 10% year on year (YoY).
The growth in revenue was driven by a 14% increase in the road (billboard) division, which accounted for $218.4 million in revenue. The continued recovery of the travel industry saw a 29% YoY jump in fly (airport) revenue to $43.7 million, whilst the return of audiences to the city offices saw a 10% lift in city and youth formats to $17.7 million.
Other formats reported modest, but positive, growth. Revenue for street furniture and rail formats was up 1% YoY to $197.7 million in revenue. While there was a decline in the first half due to QMS’ expanded City of Sydney offering in late 2022, this was corrected by a 4% lift in the second half, compared to the same period in 2022.
Retail reported a 2% YoY in revenue to $145.2 million. OOh! significantly expanded its retail foot print in 2023, adding 380 new digital panels to more than 44 new and upgraded centres.
The group also launched its new reooh division which focuses on retail or instore signage, a market predicted to be worth $3 billion in Australia by 2027 according to Morgan Stanley.
In its first year of operation reooh secured two long term contracts, with one major Australian retailer signing on for a pilot program in Q1 CY24.
Elsewhere, the business managed to retain 75% of the large contracts expiring in the 2023 calendar year, also adding new contracts for Sydney Metro, Sydney Metro Martin Place and Woollahra Council, worth a collective $30 million in annualised revenue from mid 2024.
“We delivered a solid result which highlights the financial discipline and operational improvements that are positioning oOh! to capitalise on the continued growth of Out of Home which remains the fastest growing media segment,” said chief executive officer, Cathy O’Connor.
“The Group is developing innovative new revenue streams while remaining disciplined on our approach to renewing existing contracts or winning new contracts. This is expected to strongly position oOh! to retain market leadership and build revenue in a rapidly evolving sector.
“Our focus remains on leveraging the structural growth opportunities in Out of Home to build profitable market share, while also diversifying into new adjacent revenue streams to deliver long-term sustainable earnings growth.”
The results come after what has been a strong year for the out of home sector more broadly, with the Outdoor Media Alliance (OMA) reporting that Out of Home grew 12% for 2023, or 8% after adjusting for City of Sydney.
The latest Standard Media Index (SMI) figures also put outdoor as the fastest growing channel in Australia, in terms of advertising spend, up 15.1% year on year.
“Outdoor media’s recovery from the COVID era has been quite extraordinary with growth continuing to accelerate each year since the pandemic with this year’s revenues now 70% higher than the COVID-hit year of CY2020 but also 43.3% above the CY2021 total even though the media had already reported a strong recovery that year,’’ Guideline SMI APAC managing director Jane Ractcliffe noted in January.
Looking to 2024, oOh!media said it expected that OOH will continue its structural growth, taking revenue share from other media sectors.
The company sits at a market capitalisation of $859.47 million and a share price of $1.60 and as of February 16.
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