QMS sticks by profit estimates on the strength of digital out-of-home

Out-of-home operator QMS has stuck by its profit estimates for this financial year, joining competitor Ooh Media in bucking the general declining spend in the Australia market.

At the company’s Annual General Meeting this morning, CEO Barclay Nettlefold told investors the shift to digital out-of-home advertising and the QMS’s investments in New Zealand and the sports advertising space will see the business meet revenue and profit estimates laid out in its annual report last month.

QMS CEO Barclay Nettlefold flagged greater digital revenues, New Zealand growth and the sports stadium business as drivers of the group’s profitable outlook

Nettlefold’s statements echo those of Ooh Media CEO Brendon Cook who told his company’s AGM last week that he expected the company to meet its profit guidance from earlier the year.

Cook did warn that SMI results would continue to be weak with double digit decline for Australian ad revenues expected in April, however said the out-of-home sector is performing better than the broader industry.

Nettefold told the QMS meeting: “We have demonstrated an ability to grow in a very dynamic and shifting environment, with media revenue up 12% for the period, compared to the industry at 10%. And our roadside billboard revenue grew double digits at 13%. Our industry leading digital media revenue continues to significantly outperform industry metrics, with digital revenue comprising 79% of our Australian media revenue, compared to the industry average of 52%.

“Digital will continue to drive opportunities for growth and long-term value creation for QMS Australia. We continue to grow our quality digital footprint, adding an additional 18 sites during the period, with a solid pipeline for strategic future development, bringing us to 110 quality landmark digital billboards across Australia as of today.”

Nettlefold also told investors the company’s merger of NZ operations with New Zealand’s Mediaworks remains on track, saying: “Reconfirming the terms of the deal, QMS will hold a 40% shareholding in the expanded MediaWorks business. MediaWorks yesterday released its results for FY18 and reported growth in Group revenue of approximately $5 million to $305 million and an increase in Group EBITDA of 14.8% to $24.8 million, up $3.2 million on FY17.

“Their targeted strategy to attract the desirable 25-54 year old audience is working with Channel 3 is now the number one TV channel for this audience across peak viewing, overtaking TVNZ1 and TVNZ2; and radio represents the top 6 music stations by share for 25-54 year olds.

“This is a positive result in a challenged and disrupted media landscape. Our focus now remains on successfully completing the merger and realising the full growth and potential that the combined capabilities will deliver for the Group.”

QMS shares closed yesterday at $0.705, down from $0.850 at the start of the year.


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