oOh!media has released its financial results for the half year ended 30 June 2024 (“1H24”).
Highlights:
• Structural tailwinds continue to drive strong growth of the Out of Home (OOH) market, which captured a record 15% share of agency media spend in 1H
• oOh!media revenue down 3% to $288.3m impacted by exit and renegotiation of contracts and short-term market share loss
• Profit down 11% to $18.2m; Statutory profit down 10% to $5.8m
The board noted oOh! is taking decisive action to address revenue performance and regain share in 2H and beyond.
It pointed to a pipeline of new growth assets (anticipate $38m+ projected incremental annualised revenue from CY25 – expected contract wins), in addition to $30m from contract wins announced in CY23.
oOh! managing director & chief executive officer, Cathy O’Connor, said: “In a challenged Australian media landscape, Out of Home (OOH) continues to shine and outperform other forms of media, with the OOH market growing by 8%[2] and capturing a record 15% of advertising agency media spend in the first half[3].
“For oOh!, our 3% revenue decline was attributable to the previously announced exit of the Vicinity contract, and recontracting of a significant street furniture contract that reduced non-media revenue in return for lower fixed rent. While this impacted revenue, it protected the gross profit margin. Adjusting for these contracts, revenue grew 3% for the period.
Cathy O’Connor
“Our continued commitment to disciplined commercial contract renewal and operational cost control delivered an improved adjusted gross profit margin and stable adjusted underlying EBITDA margin, despite the revenue pressure.
“We have taken decisive action to address the loss of market share, including accelerating the digitisation across our Retail portfolio to offset the Vicinity contract exit, renewing our sales leadership team and strengthening our sales capability. We are confident in these actions and seeing some positive early signs, with solid revenue growth returning in late Q3 and momentum building as we enter the critical Q4 period for the media market.
“We have a strong revenue pipeline, and anticipate securing at least $38 million in projected incremental annualised revenue from 2025 across a number of commercial contracts, including the renewal and expansion of Victoria’s Department of Transport and Planning, Australia’s single largest street furniture contract, and Melbourne Metro Tunnel greenfield sites. These are in addition to the $30 million projected incremental annualised revenue from contracts with Woollahra Council, Sydney Metro, and Sydney Metro Martin Place announced in CY23.
“While the overall media market remains challenging, the structural growth opportunity for Out of Home remains compelling. As the market leader, our focus remains on leveraging this opportunity to build profitable market share, while diversifying into new adjacent revenue streams, such as reooh (oOh!’s turnkey retail media solution), to deliver long-term sustainable earnings growth,” O’Connor said.
See also: oOh!media locks in long term Melbourne Metro Tunnel contract