Outdoor company oOh!media - owner of wide format business Cactus Imaging - says the continuing recovery in Out of Home audiences delivered an 18% lift in revenue to $504 million for the year ended 31 December 2021, with earnings before tax up 24% to $77.6m (compared to the prior year). Reported loss after tax was $10.3m, compared to loss of $36.2m in the prior year.
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| oOh! billboard above Taylor Square, Sydney NSW |
“The diversity of the Company’s assets across a range of Out of Home formats ensured oOh! was able to deliver this revenue uplift despite substantial lockdowns in Q3 CY21 and early Q4 and some formats (Fly, Office, Rail) continuing to be impacted by the pandemic,” oOh! told the ASX.
“oOh! maintains significant operating leverage to grow earnings faster than revenue which resulted in a 24% increase in Underlying EBITDA (pre AASB16) despite lower rent abatements and no Government wage subsidies in CY21 compared to CY20.
“As a result of oOh!’s strong financial position, the Company will recommence dividends to shareholders for CY21.”
Overview
Revenue up 18% to $503.7m - strong revenue recovery across key formats. Revenue in Road for November and December 2021 at record monthly levels
Gross margin of 44.1%, (up 1.8 points) - strong recovery towards pre-COVID levels
Underlying EBITDA up 24% to $77.6m with margin expansion leveraging revenue growth
Underlying NPATA of $12.7m compared to loss of $8.5m in prior year
Financial position strengthened further - gearing ratio down to 0.8 times (from 1.8 times CY20) and net debt reduced by 43% compared to 31 December 2020
Net profit after tax (pre AASB16) of $0.8m compared to a loss of $24.3m in the prior year
Reported loss after tax (post AASB16) of $10.3m compared to loss of $36.2m in prior year.
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| "More digital and digitised": oOh! CEO Cathy O’Connor |
“The strong result is a testament to our strategy,” said oOh! CEO Cathy O’Connor. “As the market leader across Australia/New Zealand, we are uniquely positioned to capitalise on the audience recovery in Out of Home. Our scale and diversity across a number of formats means we are also able to deliver this growth despite some formats such as Fly, Office and Rail continuing to be impacted by the pandemic.
“We are also generating further momentum into FY22 with a solid start to the year. First quarter revenue is pacing 15% ahead of the prior corresponding quarter and at 93% of the first quarter 2019.
“For the medium term, the fundamentals for Out of Home as a growth advertising medium remain compelling. This will only be enhanced by further significant digital investment opportunities across key formats.
“Our strategy is focused on oOh! being a more digital and digitised Out Of Home business generating enhanced leverage from our portfolio of existing assets and disciplined investments in building our assets and capability to deliver further growth.
“During CY21, we added over 30 digital locations to our metropolitan and regional roadside billboard portfolio which means we now have over 200 large format digital signs across Australia.
“In support of our Digital Out of Home strategy we have continued the digital transformation of our planning and buying systems. As part of this program, we are implementing initiatives to simplify the planning and buying process. We are also participating in the emerging programmatic digital Out of Home marketplace and further developing systems for improved yield management."
Street Furniture and Rail
Revenue in Street Furniture and Rail (formerly Commute) increased by 23% to $182 million as audiences continued to return, notwithstanding lockdowns in NSW and Victoria in the third quarter. Street Furniture revenue for the month of December 2021 was nearly flat with December 2019 (pre COVID). Revenue in Rail continued to be impacted by passenger declines in key stations in Sydney and Melbourne.
Road
The Group’s Road (billboard) division continued to be the standout performer in the portfolio continuing its strong result from the first half. Revenue increased by 34% to $158 million. Following a soft third quarter, which included the New South Wales and Victorian lockdowns, revenue rebounded very strongly in November and December which were both record revenue months for Road.
Retail
Revenue in the Retail segmented rebounded significantly from the prior year with an increase of 18% compared to CY20 to $125 million. December 2021 was a record revenue month for oOh! as it successfully leveraged audience growth in this segment.
Fly
COVID-related restrictions in air travel continued to impact revenue in the Fly segment beyond what was experienced in the key Street Furniture, Road and Retail formats. However the re- opening of state borders resulted in a stronger performance towards the end of the year with revenue approaching 40% of 2019 levels in December. Full year revenues declined by 46% to $12m.
Locate
Revenue in the Locate format continued to be affected by employees working from home during lockdowns and the pandemic more broadly. Revenue was $12 million, noting that Locate predominantly has a variable rent profile.
Other revenue represents the contribution from Junkee Media and Cactus Imaging which was $14 million. As part of the Company’s clear strategic focus on Out Of Home, Junkee Media’s digital publishing business was divested to the RACAT Group in December 2021. oOh! retained the branded content and production arm.
Strengthened Final Position
The Company’s financial position continued to strengthen during the year with net debt at 31 December 2021 of $64 million; a reduction of 32% from 30 June 2021.
Dividend
The Board resumed the dividend policy and declared a final dividend of 1 cent per share, fully franked, representing a total payout of $6m.
