“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,” said oOh!media CEO Cathy O’Connor. Net Loss after Tax was $9.3m compared to a loss of $28m in the prior corresponding period.
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| oOh!media’s 40 x 10 metre digital billboard at Sydney Airport |
“oOh! successfully leveraged the continuing recovery in Out of Home audiences during the period to deliver a 23% lift in revenue to $251.6 million compared to the prior corresponding period,” said a company press release.
“The strong revenue uplift translated to underlying EBITDA more than tripling to $33.3 million, additionally supported through ongoing cost discipline and negotiated fixed rent abatement with commercial partners.
“While COVID-19 and associated periodic lockdowns continue to cause near term uncertainty, oOh! remains in a unique position to leverage audiences through the scale and mix of our assets and continue revenue recovery as market conditions improve.”
Overview
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
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| "Significant turnaround in revenue": oOh!media CEO Cathy O’Connor |
“In Australia audience levels were consistent up to May 2021 before declining as a result of the Melbourne lockdown in June,” O’Connor said. “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 as audiences started to return with a solid improvement in Street Furniture (up 36%), leveraging its suburban strength, 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, continuing its solid performance from the second half of 2020. The Company continued to leverage its diversity and scale across its metropolitan and suburban network to deliver results for advertisers. 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
As anticipated, the COVID-related restrictions in air travel continued to impact revenue for Fly with revenue declining 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. oOh!’s airport assets are weighted more towards domestic travel, which can be expected to recover more quickly than international travel when COVID-19 air travel restrictions are lifted.
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 wide format business Cactus Imaging which increased by 9% to $8.3 million.
“oOh! continues to maintain a balanced and diverse lease maturity profile,” the company said. “Meanwhile the company also remains at the forefront of digital and data-led innovation in the sector with continued digitisation of assets in premium locations across its network. Digital revenue as a percentage of total revenue was 57% compared to 56% for the prior corresponding period.”
Net debt at 30 June 2021 was $94 million; a reduction of 16% from 31 December 2020.
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
"Revenue for Q3 is currently pacing 38% higher than the corresponding period in 2020 and 74% of Q3 2019," said oOh!.
"Forward visibility remains uncertain given the ongoing effects of COVID-19 lockdowns and associated movement restrictions, however we expect that when the current lockdowns end there will be a strong recovery in audiences and associated revenues as has been the case previously."
