oOh!media has announced continued double-digit revenue growth (up 11%) with improved gross margin and underlying earnings for the half-year ended June 30, 2018 (1H18).
Underlying EBITDA increased by 11% to $37.9 million with underlying NPATA lifting by 2% to $14.9 million.
Commenting on the proposed acquisition of Adshel, oOh!media said completion of the acquisition is expected in 2018 and is subject to ACCC approval.
CEO Brendon Cook said oOh! continued to benefit from above-market revenue growth in Road with ongoing significant improvements in its Fly and Locate businesses from the second half of last year.
He added oOh! leads the industry in driving digital transformation across its portfolio with digital revenue as a percentage of total sales climbing to 64% for the period.
Financial highlights included:
• Revenue of $192.0m, up 11% from the half year ended 30 June 2017 (1H17)
• Gross profit of $87.6m, up 16% on 1H17
• Gross profit margin of 46% compared to 44% in 1H17
• Operational expenditure increased by 20%, reflecting increased employee expenses associated with technology, creative and sales teams and related commissions to drive revenue growth
Operational highlights included:
• Out-of-home industry position maintained with 8,000 digital panels across Australia/New Zealand, 12,000 classic panels and 8 online platforms
• Extending its Fly offering beyond Qantas Domestic terminals, clubs and business lounges to also include International and Domestic Inflight Entertainment to help advertisers engage more than 28 million travellers annually
oOh!media’s Brendon Cook, said: “oOh! has delivered another strong result with solid revenue growth demonstrating the value proposition of our product offering across the most diversified portfolio in the industry.
“That diversity provides exposure to the broadest range of out-of-home segments and underlying lease contracts enabling us to deliver sustainable revenue growth while also mitigating periodic fluctuations in advertiser spend in specific categories and products.
“We are also successfully driving gross margin improvement in both percentage and absolute dollar terms.
“At the same time, we are implementing our strategy to invest for future growth. As we have said consistently, this year marks a transformation in our business as we build our platform to the next level.
“We are leading the industry in creating a new media business that is driven by data, content and innovation, connecting advertisers to more audiences with the right message, at the right moment and in the right location.
“We are supporting this with an Organisational Transformation Platform that harnesses the power of machine learning to enable clients to engage with audiences through our extensive network of signs more easily, effectively and efficiently.”
Road delivered strong double-digit sales growth (up 16%) through its portfolio of high-quality digital and classic assets. While oOh! continued to digitise assets in premium locations, classic metro sites also delivered a strong increase in revenue for the period.
Retail revenue was impacted (down 5%) by reduced spend across the category from some major advertisers. The business is confident in the future performance of the Retail business with oOh!’s national presence of full motion Shopalive and Evoke network.
Fly continued the strong momentum from the last quarter of FY17 with strong bookings leading to an 18% increase in revenue.
Locate increased revenue significantly (up 31%) from the successful integration of the ECN business and initiatives last year to restructure the sales team and re-position the go-to-market proposition.
New Zealand posted a strong turnaround in revenue from the prior corresponding period (up 19%) despite the NZ market being nearly flat in the first half.
Junkee Media and Cactus Imaging revenue continued to grow, demonstrating their value to the group.