Digital billboards and new acquisitions have helped push oOh!media’s half-year net profit up 18 per cent to $7.1 million, proving predictions that outdoor advertising will grow while print, television, and radio stagnate.
Management reported 18 per cent growth in revenue to $173 million for the first half of 2017, up from $147 million for the same period last year. For the first time revenue from its digital bill boards and screens surpassed revenue from static screens.
Earnings for the six months before interest and tax was about $32 million.
The outlook for the full year is to spend up to $40 million on capital expenditure and reap earnings of between $88 million and $92 million. (oOh!media reports on calendar years.)
Shares last traded at $4.04.
“oOh!’s strong performance reflects both the sector’s strength and further market share gains by oOh! in its key product categories,” chief executive Brendan Cook told the market on Monday morning.
“We are executive our end-to-end digital strategy, investing to maintain our market leadership position, and continuing to deliver innovating and effective solutions for advertisers.”
“We will also continue to explore opportunities to further strength and develop our new media strategy and enhance shareholder value through organic growth and acquisitions.”
During the half digital revenue was $90.2 million, up 52 per cent from $65.3 million the previous year. In the past six months oOh! has upgraded 17 roadside billboards to digital and 23 shopping mall billboards.
It will pay a fully franked dividend of 4.5 cents per share, up from 4 cents last financial year.
During the period oOh!media spent more than $8 million purchasing three businesses: a printing company called Cactus Imaging, and two content-creating companies – Junkee Media and Executive Channel International.
It did attempt to merge with APN Outdoor, but the competition watchdog raised some concerns about the purchase May. The board decided not to proceed because it was concerned about the cost and distraction it would take to convince the regulator to approve the merger. The endeavour cost $2 million.
More to come