Outdoor company Ooh!Media, which is set to merge with APN Outdoor this year, announced its financial results for the year ended 31 December 2016 (CY16) which included more than 20 per cent year on year revenue and profit growth, earnings margin expansion and an increased dividend payment.
oOh!media’s CEO, Brendon Cook, said: “We are extremely pleased with business performance for 2016. We delivered an increase across key financial metrics including revenue growth across each product. The strong results reflect the ability of the oOh!media team to execute our strategy in developing a network which offers advertisers the ability to deeply engage with audiences.
“Our physical assets, combined with engaging content and the ability to provide growing connections through online, mobile and social media, is why advertisers are increasingly finding our offering compelling compared to other advertising mediums. As we further our data and analytics capabilities, the solutions we develop will drive further value for our clients through research and reporting of measurable outcomes.
“We maintain a disciplined approach to digitisation of our assets, with an inventory of high quality assets and a planned development pipeline.”
Financial highlights included:
- Revenue of $336.1m, up 20.1 per cent from CY15 including growth across all products
- Gross profit of $144.9m, an increase of 30.3 per cent from CY15, driven by strong performances in Road and Locate by oOh!
- Gross profit margin of 43.1 per cent, up from 39.7 per cent in CY15
- Underlying EBITDA of $73.5m, up 27.4 per cent on CY15 (EBITDA of $70.3m, up 24.2 per cent on CY15)
- Underlying1 EBITDA margin of 21.9 per cent, up from 20.6 per cent in CY15
- Underlying1 NPATA of $35.6m, an increase of 24.8 per cent from CY15 (NPATA of $32.9m, an increase of 18.8 per cent from CY15)
- NPAT of $21.5m, an increase of 16.8 per cent from CY15
- Delivered at top-end of earnings guidance provided in December 2016
- Fully franked final dividend of 10.0 cents per share, resulting in a fully franked full year dividend for CY16 of 14.0 cents per share (CY15: 9.5 cps fully franked full year)
Operational highlights included:
- Digital revenue as a percentage of total revenue of 45.6 per cent (CY15: 31.9 per cent), representing early achievement of a stated goal of greater than 45.0 per cent by end of 2018, as outlined in the 2015 Annual Report.
- More than doubled our large format digital screens in premium locations to 190 (CY15: 90), including 54 large format Road billboards, exceeding the prospectus target of 50 by 2018
- 8,000+ digital screens and 14,000+ classic panels across Australia and New Zealand with eight online content and publishing platforms
- Strong maturity profile with only 16.2 per cent of contracts representing CY16 revenue due for renewal in CY17 and no more than 21.0 per cent due for renewal in any one year to the end of 2020
- Acquisition and integration of Executive Channel Network (ECN) to expand CBD audience; Junkee Media to expand publishing and content capabilities; and Cactus Imaging to strengthen core printing, production and supply chain efficiencies for classic billboards
- Announcement of proposed merger with APN Outdoor Group to create a leading media group by market capitalisation
All products achieved positive revenue growth during the year:
- Road revenue of $124.6m, up 12.3 per cent on CY16, driven by momentum of new assets installed in late 2015 and 2016 including the introduction of 29 large format screens in premium locations during CY16
- Retail revenue of $109.2m, up 10.2 per cent on CY16, attributable to the additional 39 large format digital EVOKE screens and an additional 200+ ShopaLive screens during CY16
- Fly revenue of $56.0m, up 2.8 per cent on CY16, replacing revenue lost by T2 Sydney tender loss, attributable to part year developments in securing wins and asset rollouts at T4 Melbourne and Brisbane Virgin Australia Domestic Terminal, with the extension and rights expansion of the Cairns Airport mandate
- Locate by oOh! revenue of $28.9m, up 196.4 per cent on CY16 driven by the successful integration of the CY15 Inlink acquisition, strong organic growth and the acquisition of ECN in late 2016
- New Zealand revenue of $9.8m, up 75.2 per cent on CY16, driven by a number of significant long term contract renewals and wins, and a dedicated program of digital conversion to lift the quality of digital assets to international retail standards
“Our performance highlights the benefits of our diversified portfolio of assets, and we firmly believe this positions the company for continuing growth. Importantly, the products are increasingly benefitting from greater coordination of campaigns and the network effect across multiple media environments and channels,” Cook said.
Financial Position & guidance
Net debt / Underlying EBITDA of 1.6x at 31 December 2016 remains similar to the prior year of 1.5x at 31 December 2015. Importantly, the net debt / Underlying EBITDA position strengthened in the second half of CY16 despite three acquisitions – fully or partially funded by debt – and the increase in capital expenditure to accelerate opportunities for digital conversion as outlined in August 2016.
The Board is pleased to declare a final and fully franked dividend of 10.0 cents per share, an increase of 49.3 per cent on the final dividend for CY15. This is equal to the capped amount as announced to the market during December 2016. The final dividend will be paid on 28 March 2017.
Due to the status of the proposed Scheme of Arrangement with APN Outdoor, oOh!media is not in a position to provide specific CY17 earnings guidance.
We are confident of continued growth in the Out Of Home sector over CY17; further execution and investment in oOh!media’s end to end digital strategy; and realising the full run-rate and synergies of acquisitions completed during CY16.