Watch this space
1H23 RESULT
Need To Know
- Recovering from COVID, but ad market could slow down in 2023
- Adjusted EBITDA +64% on the prior year
- Final dividend 3cps fully franked (full year 4.5cps), payment 23 March
oOh!media is recovering steadily from the ravages of the pandemic when outdoor advertising dried up. Financially, the company is in good shape. Operationally it continues to improve. But it lacks a real catalyst for growth.
Result. FY22 EBITDA +64% to $127.1m on revenue growth of 18% to $592.6m. This was in-line with market expectations. The ‘Fly’ segment improved rapidly as air travel rebounded in 2022 with momentum heading into the new year. Street Furniture and Rail lost the Sydney Trains contract, but on a like-for-like basis it increased 14%. Billboards, (Road) also enjoyed a solid recovery adding 31 more digital locations (total now 200 large format sites) giving advertisers a sophisticated solution to reach people on the move. Retail format revenue increased modestly.
Buyback. The 10% share buyback announced last August is 3% complete and remains active.
Investment View
On its own, OML’s revenue improvement was OK, but was well below what the Outdoor Media Association data suggested it should have achieved. OMA data showed out-of-home advertising revenue grew 30.2% in the December quarter with total industry revenue ahead of pre-COVID levels. In 2022, out-of-home revenue grew 27.6% which was well ahead of OML’s outcome, even allowing for the Sydney Trains contract loss.
OML said 1Q23 revenue is tracking at +8% compared to last year as could be expected given the absence of COVID restriction impacts in the current environment. OML added that February and March were also shaping up better than January so there is certainly some early momentum for FY23f.
The tailwind of exiting pandemic impacts is going to be met by the headwinds of a softening economy. Advertisers will no doubt be cautious if consumers tuck their heads into their shells.
In aggregate, we think our Hold recommendation fairly recognises the recovery balanced against a potentially weaker economy this year.
Stock Overview
Share Price
Company Overview
oOh!media is an out-of-home advertising company.
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