Outdoor companies APN Outdoor (ASX: APO) and Ooh! Media (ASX: OML) have both posted strong financial results in their half-yearly results with the two main players in the space both posting double digit earnings growth.
APN Outdoor revenues lifted 20% to $300.8m while Ooh! Media’s revenues were up 7.3% to $279.8m while in earnings APN lifted its earnings on last year, 62% to $73.3m, while Ooh! was up 37.1% to $57.7m.
Both companies were buoyed by strong rises in digital revenues with APN’s digital rising 115% to $69.4m and Ooh! seeing a 47.6% increase in digital spending, to $89.2m but also signalled that they were still open to key strategic aquisitions.
“It’s always nice to smash expectations in the prospectus and now it’s onwards and upwards and we have bigger results to achieve this year”, Brendan Cook CEO of Ooh! Media told Mumbrella.
Cook: It’s always nice to smash expectations
“I think digital is part of the driver of the growth,” he said. There is no doubt about that, but it is just another lever in the way we interact with people and the way clients can use the medium.”
Richard Herring CEO of APN Outdoor told Mumbrella they were pleased with the growth in the sector and believed it would continue for sometime.
“The digitalisation of billboards etc has been fundamental to the growth but we have also been receiving support from the advertisers around what these new offerings give them”, said Herring.
“Being able to offer them something different through the digital screen is really the icing on the cake.”
The APN boss noted that APN was also seeing solid growth in static boards as well as digital and that they would continue to roll out on new sites.
Source: APN half year report.
“We want to continue our leadership role on the digital billboards,” he said. “We had a couple go up on Epping Road and we have nine more to go up. which now have approval.”
Both outdoor CEOs insisted that they still believed outdoor would continue to chip away at the revenue share of its rivals.
“In this market we are about 6% overseas the average in comparable countries is 7.5% of the media pie so we have some natural growth to get into,” said Cook.
Herring: we will be very strategic about what we buy
Herring also backed this argument: “The share of the total pie has increased consistently. That has always been the aim of the industry to increase our share of the pie and there is no reason why those characteristics won’t continue.”
Both APN Outdoor and its rival Ooh! Media also flagged interest in further acquisitions.
“We have a huge pipeline of organic development going on but we as a business have also been acquisitive,” said Cook. “Over 12 months we have made three acquisitions and will continue to make acquisitions as they arise and it suits to make acquisitions.”
APN Outdoor’s Herring said new acquisitions would be taken only with a clear strategic focus in mind. “I think (acquisition) has been a characteristic of the outdoor industry,” he said.
“When there are opportunities that meet our strategies (we take them up.).
“We are very strategic about what we buy but there are those opportunities out there and we will continue to look at them.”
The share prices of both outdoor companies rose on the news with APN opening up 7.5% while Ooh was up 6.14% before sliding back amid trading.