‘We have taken decisive action to address the loss of market share’: Revenue, profits down at oOh!media
Despite the out-of-home market capturing a record 15% market share of agency spend during the first half of 2024, oOh!media has delivered lucklustre results for the half, with its revenue, net profits, and overall market share down.
OOh!media delivered revenue of $288.3 million for the half-year, down 3% from the same period in 2023, which CEO Cathy O’ Connor says “was attributable to the previously announced exit of the Vicinity contract, and re-contracting of a significant street furniture contract that reduced non-media revenue in return for lower fixed rent”.
O’Connor said “while this impacted revenue, it protected the gross profit margin”, and adjusted for these contracts, revenue actually grew 3% for the half.
Partially due to the exit of the Vicinity contract, revenue in the billboard division declined by 3% to $100.8 million, revenue in street furniture and rail declined by 3% to $91.0 million, while revenue in the retail space dropped by 10% to $58.3 million.
The adjusted underlying net profit after tax is down 11% to $18.2 million, with statutory NPAT down 10% to $5.8 million.
Net debt was $125 million at the end of June, compared to $84 million in December 2023, “reflecting increased capital expenditure and working capital for new and renewed contracts”.
“Our continued commitment to disciplined commercial contract renewal and operational cost control delivered an improved adjusted gross profit margin and stable adjusted underlying EBITDA margin, despite the revenue pressure,” O’Connor said.
“We have taken decisive action to address the loss of market share, including accelerating the digitisation across our Retail portfolio to offset the Vicinity contract exit, renewing our sales leadership team and strengthening our sales capability.
“We are confident in these actions and seeing some positive early signs, with solid revenue growth returning in late Q3 and momentum building as we enter the critical Q4 period for the media market.”
Looking forward, oOh! said growth during the December quarter “is expected to be significantly stronger than the preceding quarters of the year, with management actively addressing revenue performance gaps to the broader OOH market”.
O’Connor added: “We have a strong revenue pipeline, and anticipate securing at least $38 million in projected incremental annualised revenue from 2025 across a number of commercial contracts, including the renewal and expansion of Victoria’s Department of Transport and Planning, Australia’s single largest street furniture contract, and Melbourne Metro Tunnel greenfield sites.
“These are in addition to the $30 million projected incremental annualised revenue from contracts with Woollahra Council, Sydney Metro, and Sydney Metro Martin Place announced in CY23.
“While the overall media market remains challenging, the structural growth opportunity for Out of Home remains compelling. As the market leader, our focus remains on leveraging this opportunity to build profitable market share, while diversifying into new adjacent revenue streams, such as reooh (oOh!’s turnkey retail media solution), to deliver long-term sustainable earnings growth.”
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Nathan Jolly is the Features Editor at Mumbrella. He joined the team in July, 2023.
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Shareholders have had no progress in 3 years. Lots of talk, lots of half baked ideas. Still getting beaten on the ground. This is not a leading business in our of home, it’s the third player in most categories especially in service and innovation.
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Lengthy response to brief times, inability to trade, poor pops/campaign reporting, poor internal processes. Doing business with oOh! remains hard. They are focussed on getting ‘share’ before they respond to brief, but ultimately it sees them loose out on revenue and these results show. Over cooked rate cards, hiding behind discount levels that mean nothing. oOh needs a complete overhaul on how they do business, back to the basics required!
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Truth is their competitors are out servicing them. Having to wait 2-4wks for a PoP is silly.
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How bloody good are QMS?!
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