QMS half year revenue climbs to $99m on strong digital performance
Revenue from QMS’ expanding digital inventory has been a major contributor to the company’s half year FY18 results, with digital out of home contributing 66% of QMS’ $99m total revenue and 76% of domestic media revenue.
The results, posted on the ASX this morning, also showed earnings before interest, tax, depreciation and amortisation (EBITDA) climbed to $22.481m from $17.316m in the previous corresponding period.
QMS’ half year results show strong EBITDA, NPAT and revenue growth
Costs associated with acquisitions were slightly up year on year to $156m but restructuring costs were significantly reduced, down from $394m in the 2016 half year, to $65m for the first half of FY18.
Site leases cost the company $86.6m and operating expenses were $33.2m compared to $26.9m in the year prior.
Of that $99m, 66% came from digital revenue.
The last six months saw QMS expand its sporting rights commitments with the renewal of a three year contract with Football Federation Australia. It also has exclusive sales media rights for the National Rugby League.
In November last year, the company acquired a 60% shareholding in both Digital Commons Limited and Digital Commons Australia, a third party digital representation group.
QMS has said it is well placed to deliver revenue and earnings growth, with FY18 EBITDA guidance of $44m-$46m.
Barclay Nettlefold, QMS group chief executive officer, told Mumbrella today’s results were “really pleasing”, noting they were driven by digital out of home rollout, especially in sport.
Nettlefold said the company will continue to expand its digital footprint
“We’ve had five years of great growth in the outdoor industry as you are well aware and all the growth has been through digital development and we are capitalising on,” he said.
Beyond that focus, Nettlefold said he will assess “all tenders in market”. It comes after the company won Canberra Airport last year, creating a national footprint for QMS. One of the biggest out of home tenders in Australia, the City of Sydney outdoor advertising contract, is currently under review.
“There’s a lot of tenders out at the moment, we will certainly look at all tenders on a commercial basis and how it fits our business strategically,” he said.
Several weeks ago, it was reported in the Australian the $320m company was believed to be on the radar of two separate parties.
When asked about industry consolidation this morning, Nettlefold refused to make comments in reference to his business. But he said: “I do see consolidation is possible. It wouldn’t be a negative to the industry and I think clients alike would say that. As for when, if it ever occurred, I don’t know.”
On the company’s increasing investment in sport, Nettlefold said it has helped increase the company’s content footprint.
He added: “We are dealing with Sports Bet, Harvey Norman, Chemist Warehouse as major clients in sport, as also major clients in out of home. So we are now able to talk to them on a pure digital platform across sport and our digital offerings in media.”
But while QMS sport and digital expansion are a priority for the back end of the year, transparency on digital platforms is also top of mind.
“We recognise that once the industry is working well together now to come up with a digital measurement system that will further support the value of digital and the importance of it in our sector. Once that becomes currency, you’ll see another growth spurt in the industry.
“The outdoor sector in Australia is just under 6%. I would say that with getting the right metrics around out of home for digital as a currency, the sector will grow towards 8% in the next couple of years.”
