oOh! recovery underway as losses fall
The biggest outdoor media company in Australia and New Zealand oOh! Media saw its recovery from the devastation of Covid begin in the first half year, with a 23 per cent lift in revenue January to June.
Digital revenue as a percentage of total revenue was 57 per cent, compared to 56 per cent for the prior corresponding period, with print down by the one per cent to 44 per cent.
Sales were up to $251.6m, with underlying EBITDA more than tripling to $33.3m. The company reported a net loss after tax of $9.3m (post AASB16), compared to a loss of $28m in the first half of last year, and said it had brought its underlying NPATA back into the black at $2.4m, compared to loss of $16.9m in prior corresponding period.
Its Billboard segment is now above the pre-Covid 2019 result, while Fly continues in the opposite direction, due to lack of air passengers, plummeting to just $8m in this half. Revenue for Q3 is currently pacing 38 per cent higher than the corresponding period in 2020, and at three quarters of the Q3 2019 figure.
oOh! says it is continuing to implement its strategy, with a clear focus on its core out of home assets, continued digitisation of core sites and audience-focused selling.
It says that while Covid-19 and associated periodic lockdowns continue to cause near term uncertainty, oOh! remains in a position to leverage audiences, through the scale and mix of assets and continue revenue recovery as market conditions improve.
Chief executive officer, Cathy O’Connor said oOh! delivered a strong first half result, which demonstrated the scale and diversity of the Company’s assets and leverage to audience recovery across its key formats.
“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 per cent of 2019 levels with revenue in Road performing particularly strongly at 116 per cent of the first half of 2019. New Zealand also performed at or slightly above 2019 levels.
Revenue in Commute, which includes the company’s rail assets, increased by 26 per cent to $91.9m as audiences started to return, with a solid improvement in Street Furniture (up 36 per cent), leveraging its suburban strength, partially offset by Rail revenue (down 18 per cent) which was impacted by passenger declines in key stations in the Sydney and Melbourne rail networks.
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 per cent to $78.6m. This performance also represented a significant improvement on the pre-Covid period with revenue up 16 per cent compared to 1H19.
Retail revenue increased significantly as audiences returned to the segment, continuing the trend from the end of 2020. Revenue increased by 40 per cent to $57.3m.
The Covid-related restrictions in air travel continued to impact revenue for Fly, with revenue declining by 56 per cent to $8m. 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.