oOh! Media’s CY23 Full Year results: Revenue up 7%, driven by billboard growth


oOh! Media has reported its full year results for 2023, headlined by 7% revenue growth to $633.9m and a 10% jump in its statutory net profit after tax (NPAT) to $34.6m. 

oOh! Media has reported its full year results for 2023, headlined by 7% revenue growth to $633.9m and a 10% jump in its statutory net profit after tax (NPAT) to $34.6m. 

Earnings before interest, tax, depreciation and amortisation (EBITDA), meanwhile, climbed a modest 2%, which oOh! said was a reflection of increased rent and reduced rent abatements.

oOh! attributed its revenue jump to a 14% increase in the road – billboard – division to to $218.4m, driven by a strong second-half performance, up 16% compared to H1. Every other division – street furniture and rail, fly, street furniture and youth, retail – also grew on 2022’s results.

The wider OOH market climbed 8%, after adjusting for QMS’ City of Sydney network (without that adjustment, the growth was 12%).

Its retail arm grew 2% to $145.2m year-on-year, following the addition of 380 new digital panels and the roll out of retail media business reooh, which was first announced in 2022 and specialises in retail and in-store signage.

In September 2023, reooh made senior hires in Barry McGhee joined as general manager and Brad Morris as product lead, ahead of October’s news that reooh had signed New Zealand department store The Warehouse Group as its foundation client. The retail media market is predicted to be worth $3bn locally by 2027.

oOh! won 75% of the large contracts which came up for renewal in 2023, and CEO Cathy O’Connor said the business will remain disciplined around upcoming contract negotiations.

“We delivered a solid result which highlights the financial discipline and operational improvements that are positioning oOh! to capitalise on the continued growth of Out of Home which remains the fastest growing media segment,” O’Connor said.

“The Group is developing innovative new revenue streams while remaining disciplined on our approach to renewing existing contracts or winning new contracts. This is expected to strongly position oOh! to retain market leadership and build revenue in a rapidly evolving sector.”

Three new contracts – Sydney Metro, Sydney Metro Martin Place and Woollahra Council – will bring in around $30m in annualised revenue from mid-2024.

Off the back of the results, the out-of-home business is issuing a full-year dividend of 5.25 cents per share, fully franked, which represents a 17% jump on 2022’s dividend.

The Outdoor Media Association reports that the out of home market grew 15% in media agency spend in 2023, against a backdrop of a 3% drop in total media agency spend.

O’Connor added: “Our focus remains on leveraging the structural growth opportunities in out of home to build profitable market share, while also diversifying into new adjacent revenue streams to deliver long-term sustainable earnings growth.”

The network’s street furniture and rail unit experienced a small increase of 1% to $197.7 million, thanks to 4% growth in H2. H1 declined due to QMS’ expanding its City of Sydney network in September 2022.

The continued recovery of the travel category resulted in a big revenue surge of 29% year-on-year to $43.7 million. The City and Youth arm – formerly known as Locate – remained steady at $17.7m. Again, this was thanks to a strong H2 increase of 10%; H1 proved difficult, which oOh! blamed on “the continued slow return of audiences to Central Business District office environments”

“Adjusting for the sale of the Café and Venue business, revenue on a like for like basis in the format increased by 9% on the prior year.”

Net debt dropped by 25% from 30 June 2023, while the completion of an on-market share buyback program drove net debt up around $50m year-on-year; $83.8m at the end of 2023 versus 2022’s $32.9m.

As for 2024, oOh! predicted that out-of-home will continue to take revenue share from other media sectors. It forecasted mid- to high- single digit revenue growth for the industry in 2024. 

Q2 and H2 should offer stronger performance than Q1 – traditionally the weakest quarter – it continued.

“The Company will remain disciplined on operating expenditure with a focus on reinvesting into the business to capture future revenue growth,” it said.

“Capital expenditure for CY24 is expected to be between $45 million and $55 million, subject to development approvals. Capital expenditure remains focused on revenue growth opportunities and concession renewals.”

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