Outdoor media, emerging from the dark hole of the pandemic, has resumed its growth trajectory.
At ASX-listed oOh!media, the relatively new CEO Cathy O’Connor has a plan to capture this lift in the sector.
“As business and ways of living return to normal, we are seeing a return to structural growth for the OOH sector,” she told the company’s AGM.
“We can be very confident that OOH will continue to gain share of the overall media pie.”
The company gave a trading update for the March quarter which analysts at Macquarie described as being above expectations, positioning the company as an attractive player in the media sector.
The analysts: "Good trading update and commentary on structural outlook for the business. OML continues to present itself as an attractive risk/reward proposition and valuation is attractive compared to the small industrials / media sector."
oOh!media says revenue grew 15% in the March quarter. April paced slightly stronger at +18%. However, May will be impacted by the federal poll because OOH generally does not benefit from elections versus other media due to landlord restrictions on political advertising.
At the company's AGM, O'Connor firmly placed digital as the opportunity.
“As we know, an increasing share of the advertising market is migrating to digital, where OOH is incredibly well placed.
“The digitisation of OOH presents a far greater opportunity than just the conversion of a static image to a digital image.”
She used this slide to illustrate the breadth of opportunity to engage advertisers in new ways using digital OOH:
“Digital brings the opportunity for superior targeting, real time messaging, the delivery of content beyond advertisements, interactivity through technology and a range of other benefits, making DOOH a high impact experience for consumers and therefore, advertisers,” she says.
“This profound evolution of OOH is happening globally and is one of the reasons why OOH is well placed to increase its share of the overall media sector. oOh!media has led the industry with innovations around data led audience selling and this remains a key part of our operating strategies.
“So in summary - our strategy is focused on oOh! being a more digital and digitised OOH business generating enhanced leverage from our portfolio of existing assets and disciplined investments in building our assets and capability to deliver further growth.”
The company also has an opportunity for margin expansion. As revenue grows, fixed costs (such as rental for billboards) shrink as a proportion of total revenue.
And O'Connor says 75% of fixed rent base of $160 million is not directly linked to inflation.
oOh!media's revenue for 2021 was up 18.1% to $503.73 million compared to 2020, impacted by the pandemic. Underlying NPATA (net profit after tax plus amortisation) of $12.7 million compared to loss of $8.5 million in prior year.
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