oOh!media Limited has reported strong profit growth and margin expansion in its financial results for the 12 months ended 31 December 2015.
Below are the details from its statement to the ASX this week.
Financial highlights included:
• Pro forma revenue of $279.8m, up 7.3% on the previous year, exceeding the Prospectus forecast by 5.0%
• Pro forma EBITDA of $57.7m, up 37.1% on the previous year, exceeding the Prospectus forecast by 18.8% and at the top end of guidance
• Pro forma EBITDA margin of 20.6%, up from 16.1% the previous year
• Pro forma Adjusted Net Profit After Tax of $28.5m, up 56.8% exceeding the Prospectus forecast by 28.5%
• Digital revenue up 47.6% on the previous year, exceeding the Prospectus forecast by 17.7% and representing a market leading 31.9% of total Group revenue
• Final dividend of 6.7 cents per share, amounting to a fully franked full year dividend of 9.5 cents per share, exceeding the Prospectus forecast by 28.0%
• Agreement to extend bank facilities by $50m to $190m, providing headroom for growth.
Operational highlights included:
• Installed more than 900 new digital retail screens across Australia and New Zealand
• Increased the number of large digital roadside billboards from 8 to 25
• Increased the number of large format digital billboards in Retail from 7 to 20
• Designed and deployed EXCITE, the next generation of interactive retail digital screens across Australia and in New Zealand
• Launched ShortPress, oOh!media’s fourth content platform integrating digital screens with online
• Acquired the Inlink Group with its premium network of more than 2,800 digital screens in high dwell-time CBD locations.
oOh!media’s chief executive officer Brendon Cook said the company had delivered significant profit growth and margin expansion while achieving major operational milestones in 2015.
“Our performance reflected the execution of a business strategy for sustainable growth and initiatives that delivered advertisers increasing engagement with the most diverse, location-based audience,” Cook said.
“oOh!media achieved significant inventory growth in 2015 through contract wins and extensions and strategic acquisitions. We secured 145 new contracts and tenders including the sought after NSW Roads and Maritime Services contract for 13 large format billboards across Sydney’s road network.
“In growing our metropolitan and regional product offering, we now have almost three times as many digital screens as we had in 2014.
“The Out Of Home industry is benefiting from the disruption in the advertising sector and oOh!media is driving a strategy to enable us to be at the forefront of Out Of Home’s development.
“We are pleased that digital revenue reached 31.9% of total Group revenues, up from 23.2% in 2014. In Q4, this represented 38.3% of total Group revenue, and we are targeting to deliver digital revenue between 45-50% of total Group revenue by the end of 2018.”
Cook added: “oOh!media’s strategy of increasing our digital capabilities is about much more than investing in digital screens. That’s one phase of our end-to-end digital growth strategy. It’s also about the integration of engaging digital screen content with online, social and mobile channels as well as providing advertisers with more sophisticated audience insights and analytics.”
Cook said all of oOh!media’s Australian divisions contributed strongly to the company’s performance:
• Road revenue of $110.9m, up 8.4% – with the delivery of Australia’s largest full motion billboard at Melbourne’s Bourke Street Mall.
• Retail revenue of $99.0m, up 11.2% – 53 new centres secured and major contracts extended, including contracts with Vicinity and QIC.
• Fly revenue of $54.5m, up 7.1% – including the extension of the Melbourne Airport contract for exclusive signage and media rights.
• Place revenue of $9.8m, up 11.4% – including growth of oOh!media’s Wi-Fi hotspot offering to more than 900 products in café and sport venues.
oOh!media’s strong investment in New Zealand was evident through the increased footprint and digitisation of key shopping centres. Digital revenue grew 19% in 2015.
A key highlight was the strategic acquisition of the Inlink Group, a market leader in premium CBD signage. This added more than 2,800 digital screens in office towers, cafes and fitness centres.
Based on plans for 2016 and current economic conditions, the board provides guidance for the full year 2016 EBITDA of between $68-$72m, representing 17-25% growth, and capex of between $20-$25m. oOh!media expects capital expenditure to include conversion of 10-15 large format roadside billboards to digital, 300-500 retail digital screens, and further investment in its Wi-Fi network and content management systems.
The board has declared a fully franked final dividend of 6.7 cents per share, bringing the full dividend for the period to 31 December 2015 to 9.5 cents per share. The final dividend will be paid on 22 March 2016.