oOh!media
oOh!media has announced its financial results for the half year ending 30 June 2021 which included a 23% lift in revenue to $251.6 million compared to the prior corresponding period.
This translated to underlying EBITDA more than tripling to $33.3 million, which was additionally supported through ongoing cost discipline and negotiated fixed rent abatement with commercial partners.
Mediaweek caught up with oOh!media’s chief executive officer Cathy O’Connor to discuss the results, her time at the company, and the future of oOh!media.
O’Connor is seven months into the role after a long stint at the helm at Nova, and said that she is enjoying life in her new role.
“I am very upbeat about the prospects of future growth for out of home. The longer I’ve been in the chair, I can see the things that are going to drive that growth for the industry, which is really encouraging. oOh!media is a great business. So I’ve really enjoyed the change. I think it’s a fantastic sector with a big future.”
With the company able to increase its revenue while cutting its debt, O’Connor said that she was encouraged by the half year results.
“Considering the external environment we are very encouraged that the business is now back on the path to recovery. And what we do know is that when audiences recover, the revenue recovers quite sharply, and that demonstrates the underlying belief and support of the out of home sector by advertisers. None of that has changed, despite the fact that pandemic has put pressure on a lot of businesses, audiences behave differently.
“We’re encouraged by the fact that we’ve held our revenue share in a very competitive sector, and held on to the gains that we made last year in the pandemic. And so one of the reasons for that is just the scale of oOh!media, notwithstanding our exposure to some of the audience impact, at airports and things. We’ve got such a strong suburban coverage with road and street furniture and retail and really being able to take that audience conversation to advertisers, and that’s delivering some of the growth you’ve seen in the results.”
O’Connor acknowledged that the pandemic had played a part in the companies financial results, but she remains optimistic that the company can recover to pre-pandemic levels.
“Up until this current round of lockdowns, the pace of recovery was accelerating. And that’s a really good thing. I have a very high level of confidence that when we move to the other side of the pandemic, in a new version of normal, that out of home, will see recovery through to 2019 levels.
“And then I think beyond that, a lot of advances in the sector are going to mean that it grows well beyond that. And that’s supported in things like the PwC Outlook Report, which shows, beyond 2020 to 23, into 25, out of home is the only established medium that’s going to continue to grow its share of the total advertising pie.”
In July, oOh!media announced that it will increasingly focus on the out of home aspect of the business. O’Connor said that this is due to the potential in the out of home sector.
“Within oOh!media and beyond, in the broader sector, there’s a lot of work going on with the advertising agencies and the Media Federation of Australia to make out of home easier to buy, and more accountable and able to be traded, more digitally, and to advance its measurement through the changes to the measurements that are coming through.
“There’s a whole body of work that is really exciting and provides a step-change for out of home, and then the emergence of things like programmatic trading in digital out of home, all of those things are going to provide new usage cases for out of home, and are going to allow out of home to compete on a like for like basis with things like digital advertising, through trading desks, and so forth.
“There’s a range of really exciting improvements to the sector that are all not coming, they’re actually in play now. And as a matter of fact, most of that work is close to being completed. So we are going to sort of see this evolution of out of home, the likes of which we’ve not seen before. And it’s one of the reasons why we can see our growth story within the sector. We don’t feel we need to look beyond it.
“On top of all of that, growth is about audiences, and what just what you see with a lot out of home is growing audiences that aren’t being disrupted or fragmented, or skipped, or blocked. And our formats and environments exist in a very unique place in a fragmenting media marketplace. So, just that mass reach in a world where many audiences are being chopped up and carved up, at its core that is a very basic advantage that we have. Advertisers will still want to be able to achieve mass reach, and that’s something out of home provides in spades.”
Junkee Media
Part of the focus on the out of home sector meant the transition away from online digital publishing and appointed Jacanda Capital to divest Junkee Media, its youth-orientated digital publishing business, which it expects to sell in the second half of this calendar year.
“We expect through September to be through our management presentations. There’s been a lot of interest from a broad range of potential acquirers. And we think sometime in Q4, hopefully, toward the end of last October we might be progressing to an outcome, but it is too early to guess what that looks like.
oOh!media’s future
O’Connor said that the future of oOh!Media lies in two areas consolidation and digital.
“It’s all about consolidation for us. oOh!media is the largest scale player in the sector and is really well positioned and it is great that we got to that place when the industry was consolidating three or four years ago.
“It’s about leveraging our scale for me and running a very disciplined business and continuing to digitise, so, those are the three pillars. As we know, the world is moving digital, so it’s important that we’re adapting both our technology and ways of selling to be able to capitalise on the opportunities in the digital marketplace and we will continue to evolve our assets and fully digitise those hard peer environments like road and retail street furniture and ensure that we are best placed to give quality assets to capitalise on the demand as we go forward.