Mediaweek

Advertising

QMS boss Barclay Nettlefold talks outdoor acquisitions

“There are a lot of exciting things in the pipeline”

QMS has been one of the fastest-growing businesses in one of the fastest-growing media sectors in Australia. The outdoor company was formed in 2010 as a joint venture with Qatar Media Services which led the acquisition of around seven related companies in the outdoor sector Australia, Vietnam and Indonesia. Chief executive Barclay Nettlefold told Mediaweek that there was a subsequent decision by the Qatar investors Qatar Development Bank to focus on other areas. “We agreed that I would buy them out and become a listed company. At the time of the IPO we also bought a few more companies.” The company listed on the ASX on June 29, 2015.

Some readers will be familiar with the Nettlefold name on outdoor sites and Barclay Nettlefold entered the family business in 1982 after finishing an accounting degree, working with his father in what was then his father’s second outdoor company. “I have been in outdoor all my working life since then,” said Nettlefold.

Barclay Nettlefold

Barclay Nettlefold

Also previously working in the family business was Barclay’s brother Michael, but he is no longer in outdoor. Michael was formerly CEO of St Kilda Football Club.

Although the Nettlefold outdoor business originally started in Tasmania, QMS doesn’t operate in that state. “I do think about it,” admitted Barclay Nettfold, “but it is a small market and the return metrics don’t really stack up.”

The previous family businesses were always privately owned. Nettlefold noted that both forms of business structure need good governance and the right management team.

“All major outdoor companies have enough inventory to organically grow. Our real focus has been a combination of that with acquisitions”

QMS quickly realised the value of digital signage with its first large-format digital going up in 2011. “We instantly recognised the power of it and what we could do with the site. We then invested more capital to grow that platform and the whole strategy we needed to move quickly and aggregate our assets sooner rather than later.”

The Crown

Nettlefold noted QMS certainly wasn’t the first to realise the power of digital with people like GOA and Octopus also early into the space. Something that QMS worked hard to do early was to create a national footprint.

The company’s growth has not always been linked to acquisition. “All major outdoor companies have enough inventory to organically grow. Our real focus has been a combination of that with acquisitions.”

Nettlefold agreed that Victorian and Queensland regulatory environments were the best for outdoor players to work with.

“We are strong in large format in quality locations and in New Zealand we are dominant across all platforms”

As to industry consolidation, Nettlefold noted there might still be some more ahead. “There are some strategic positions we are still looking at. In the capital city markets there are five major players – QMS, oOh!, APN Outdoor, Adshel and JCDecaux – and they all have the desire to grow. Demand is certainly strong enough because of the digital revolution.”

In terms of size, Nettlefold noted it is hard to compare because all the players have different footprints and platforms. “We are strong in large format in quality locations and in New Zealand we are dominant across all platforms.”

“We might see a digital client change their creative 30 times a day”

As to holding contracts that need to be re-pitched for, Nettlefold said: “Because we are a younger company our acquisitions were not focused around companies that had concessions. We are more about site-specific acquisitions. Our Gold Coast street furniture acquisition runs until 2030. We have a longer average tenure across our portfolio than any other outdoor company.”

The Gabba

QMS is working its way through its digital conversion plan for existing sites. Nettlefold noted the cost is offset by the return. “The real issue, and what I think we underestimated, is the additional load on the operations teams because we are seeing clients using the media so much more aggressively in the type of copy they use and the frequency of the changes. There is a lot more involved. We might see a digital client change their creative 30 times a day.”

“There are a lot of exciting things in the pipeline that I can’t really disclose. I can say the future is very bright and our growth looks promising”

Sixty per cent of media revenue at QMS is now linked to digital site sales.

Although digital is driving the dollar growth, Nettlefold is one of the major players who certainly sees a place for older static displays. “We have seen a resurgence of that in the UK in terms of pricing and demand. Good quality static sites always sell. We are just conscious not to overload ourselves with what we would call second tier static sites.”

Although Nettlefold has been very hands on over the past 12 months, he told Mediaweek he is now relying more on the management team to run their departments.

When asked if QMS still had an appetite for acquisitions and access to funds if the right deal came along, Nettlefold replied, “Absolutely.”

Nettlefold and his major investor hold 26% of the company shares. The next biggest shareholders are fund managers, including Ellerston Capital and Greencape Capital.

When asked about his to-do list, the QMS boss wasn’t giving us much. “Watch this space.” [Laughs]

“There are a lot of exciting things in the pipeline that I can’t really disclose. I can say the future is very bright and our growth looks promising.”

To Top