oOh!media has announced its financial results for the half year ended 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.
oOh!media provided an overview of the results:
• Revenue up 23% to $251.6m – Strong revenue recovery across key formats in Australia (Road, Retail and Street Furniture) and New Zealand. Road and New Zealand revenues performed ahead of 1H19 (pre COVID-19)
• oOh! has the #1 market position in both the Australian and New Zealand markets
• Gross margin of 42.5%, (up 8.8 points) demonstrating strong recovery towards pre-COVID levels
• Underlying EBITDA up 209% to $33.3m with margin expansion leveraging revenue uplift
• Continued negotiations with property partners delivers net rent abatements of $19m in 1H21
• Underlying NPATA of $2.4m compared to loss of $16.9m in prior corresponding period
• Financial position strengthened further – gearing ratio down to 1.1 times (from 1.8 times) and net debt reduced by 16% compared to 31 December 2020
• Reported Net Loss after Tax of $9.3m (post AASB16) compared to a loss of $28.0m in the prior corresponding period
Chief Executive Officer, Cathy O’Connor said:
“We have seen strong audience growth post lockdowns which has led to a significant turnaround in revenue for the half, particularly in our key formats of Road, Retail and Street Furniture in Australia and New Zealand.
“That has also been a function of our strong suburban and regional network where we continue to provide unrivalled reach and frequency for advertisers.
“In Australia audience levels were consistent up to May 2021 before declining as a result of the Melbourne lockdown in June. Overall revenue has held consistently at 80% of 2019 levels with revenue in Road performing particularly strongly at 116% of the first half of 2019. New Zealand also performed at or slightly above 2019 levels.
“As conditions have become more fluid during the pandemic, we are seeing advertisers capitalising on the flexibility of digital out of home (DOOH). With the largest quality digital network across the region, oOh! is well positioned to respond.”
Products
Commute
Revenue in Commute, which includes the Company’s rail assets, increased by 26% to $91.9 million. There was an improvement in Street Furniture (up 36%), partially offset by Rail revenue (down 18%) which was impacted by passenger declines in key stations in the Sydney and Melbourne rail networks. The rail networks include inbuilt rent abatement or rent structure mechanisms in relation to audience declines.
Road
The Group’s Road (billboard) division was the strongest performer in the portfolio. Revenue increased by 44% to $78.6 million. This performance also represented a significant improvement on the pre-COVID period with revenue up 16% compared to 1H19.
Retail
Retail revenue increased significantly as audiences returned to the segment, continuing the trend from the end of 2020. Revenue increased by 40% to $57.3 million.
Fly
Fly declined by 56% to $8.0 million. The key airport leases include inbuilt rent abatement or rent structure mechanisms in relation to audience declines, resulting in further rent savings in 1H21. Locate
Locate revenue continues to be affected by the actual or perceived closure of office buildings and employees working from home. Revenue declined by 33% to $7.5 million, noting that Locate predominantly has a variable rent profile.
Other revenue represents the contribution from Junkee Media and Cactus Imaging which increased by 9% to $8.3 million.
oOh!media’s Financial Position
Net debt on 30 June 2021 was $94 million; a reduction of 16% from 31 December 2020. The Company’s gearing ratio (Net Debt / Underlying EBITDA) as of 30 June 2021 was 1.1 times, compared 1.8 times at 31 December 2020.
oOh!media Dividend
As announced at the time of the equity raising in March 2020, the Board has temporarily suspended dividends. As a result, no dividends were payable for 1H21.
FY21 Outlook for oOh!media
Revenue for Q3 is projected to be 38% higher than the corresponding period in 2020 and 74% of Q3 2019.
Capital expenditure for the full year will be at or under $25m and as oOh!media remains focussed on revenue growth opportunities and concession renewals.