oOh!media has gone into a trading halt.
The outdoor advertising specialist told the ASX it is considering a capital raising and called for a trading halt pending an announcement.
oOh!media insiders say the trading halt reflects discussions with major shareholders given the slide in the share price.
The company wants to manage short term volatility and ensure the business is well placed to leverage opportunity when the advertising market stablises and recovers.
The shares last traded at $0.84, indicating a market capitalisation of around $200 million. Net debt was $354.5 million at the end of December 2019 and the company's loans have an expiry date of September 2021.
Analysts have marked down oOh!media’s revenue prospects this year in an already weak advertising market but still see strong long term growth for the out-of-home sector and the benefits to oOh!media.
Out-of-home (OOH) is around 6% of the advertising pie in Australia and OOH audience growth has outpaced population growth since 2011, according to analysis by Macquarie.
So far, oOh!media's revenue for the year to date has been in line with the same period last year with the first quarter in line with previous earnings guidance.
However, the company, like many ASX-listed entities facing fallout from the coronavirus, has withdrawn its previous full year earnings guidance of $140 million to $155 million and is looking at pulling back on capital spending and cutting costs.
oOh!media this week: "Deteriorating macroeconomic conditions and resultant market uncertainty caused by COVID-19 has made forecasting full year revenue in the current environment difficult. This is particularly relevant for oOh! given the Company has nine months remaining in its financial year to December 2020.
"The company is taking decisive action to proactively manage the business through this period and ensure it remains well positioned for when conditions stabilise, and continues to make every effort to achieve the prior earnings guidance."
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