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APN Outdoor revenue climbs, net profit down after merger fail

Company revenue was up 8% to $162.3m, with digital revenue climbing 27%

Richard Herring

APN Outdoor has reported continued first half calendar 2017 growth in revenue and underlying earnings and a strategy to continue digital investment to drive long-term growth.

In delivering his final profit report, soon-to-depart CEO Richard Herring said: “The first half of this year saw the company continue to grow revenue through the combination of additional digital screens and overall market growth. Underlying EBITDA grew slightly less than revenue, as the business invested further in staff to underpin longer-term growth.”

Company revenue was up 8% to $162.3m, with digital revenue climbing 27%.

Net profit was down 19% to $15.8m after a $4.1m cost was incurred with the unsuccessful APN Outdoor/oOh!media merger.

The company indicated trading highlights included the addition of 16 new digital screens in the first half of the year, and contract renewals for Tullamarine Freeway, Sydney buses, Adelaide metro and Perth rail and billboards.

Herring, who departs the business on September 30, added:

“With 16 new screens added to APN Outdoor’s portfolio over the first half, the company now has 103 Elite Screens across Australia and New Zealand. This high-quality portfolio of large format digital screens is the most comprehensive in the market.

“Digital screen revenues continue to represent over one-third of group revenues, and will continue to grow in line with demand and the company’s focused growth strategy. Over the longer-term, we see digital sites continuing to deliver greater yields. Notwithstanding the increase in digital screens and associated revenue, classic billboard revenue was resilient and performed better than expected in the first half.”

Regarding the outlook, Herring said: “Based on the first half results, the performance of the business over the first seven weeks of the second half, and assuming current market conditions continue, we expect 2017 underlying EBITDA to be in the range of $90m to $95m and plan to invest between $30m and $35m of capex in 2017.”

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