Brendon Cook not going anywhere as oOh!media restructures

“Forecasting of full year revenue in the current environment is difficult”

oOh!media has announced a number of proactive initiatives to improve the company’s financial flexibility and liquidity in light of recent global macroeconomic conditions. These initiatives include:

• The launch of a $167m fully underwritten equity raising, with proceeds to be applied to repay debt and fund transaction costs
• Material cost control measures with identified savings of $20m – $30m in Operating Expenditure and Fixed Rent expense reduction to be realised over financial year 2020 (FY20) depending upon how market conditions evolve
• Reduction of Capital Expenditure program by $25m – $35m below the previous guidance range of $60 – $70m
• Amendment of the Company’s debt arrangements (Debt facility) to increase the gearing covenant to 4.0x Net Debt / EBITDA for calendar year 2020 (CY20 and Covenant Extension), reflecting strong support from the Company’s banking syndicate

The combination of the announced initiatives strengthens oOh!media’s balance sheet and provides the company with improved financial flexibility and liquidity, with pro forma gearing reducing from 2.6×4 to 1.4x net debt / FY19 EBITDA. The company believes it is prudent to pursue measures that improve balance sheet flexibility given the uncertain economic outlook.

With the full support of the board, Brendon Cook has committed to remain chief executive officer until at least the end of CY20.

FY20 year to date (YTD) revenue remains in line with the prior corresponding period. As noted in the company announcement provided on 16 March 2020, the company’s performance in the first quarter was consistent with delivering the original FY20 EBITDA guidance of $140m to $155m provided on 24 February 2020.

However, as the company has over 9 months remaining in FY20 and due to the evolving macroeconomic conditions and the resulting market uncertainty caused by COVID-19, forecasting of full year revenue in the current environment is difficult. In accordance with oOh!media’s continuous disclosure obligations, the company decided to withdraw its FY20 earnings guidance on 16 March 2020.

Cost control measures include:

• Savings across a range of readily actionable categories: marketing, travel, entertainment and replacement hires
• Rent abatements built into some of the company’s leases and targeted non-renewal of specific sites

oOh!media is pleased to announce that it has received significant support for the Entitlement Offer and Placement from its largest shareholder, HMI Capital LLC (HMI). HMI is an investment management firm and long-time supporter of oOh!media, having first joined the register in March 2017.

oOh!media will appoint Mick Hellman, founder and managing partner of HMI, to the oOh! board of directors following completion of the institutional component of the Entitlement Offer. Mick Hellman will join the board as a non-executive director and will join the board’s nomination and remuneration committee.

oOh!media’s chief executive officer Brendon Cook commented: “Despite a challenging macroeconomic backdrop, trading for CY20 to date remains flat compared to the previous corresponding period in FY19 which was in line with expectations.

“With the impact of the economic outlook remaining uncertain at this time, we see risk around trading for FY20 and as such have taken the prudent and cautious measure of raising equity to repay debt, and implementing cost control measures and CAPEX reductions. Despite this challenging market environment, management believes the fundamentals for the out of home industry remain positive. The initiatives we announced provide the company with significant liquidity to trade through uncertain times ahead, and will position oOh!media to continue leading the out of home industry which we believe is a long-term structural growth sector.”

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