Credit: Joseph Barrientos via Unsplash
oOh!media has delivered more than $10 million in annualised savings since CEO James Taylor joined the company eight months ago, and more is expected.
Combined with the exit of retail media business Rio, which delivered $2 million in savings, and the reset of the New Zealand cost base following the Auckland Transport loss, the company has unlocked $12 million.
Taylor said the changes, which include a new sales incentive program effective from July 1 and cross-network planning capability across major formats, had shortened the time and cost of getting assets in the ground.
"They make us faster to respond to client briefs," he told analysts when briefing on the first half results.
"They allow us to better deploy revenue across our asset base, and they align sales activity to desirable commercial outcomes."
Analysts expect oOh! under the new ownership of private equity group I Squared Capita will mean more cost savings.
“We expect fixed-cost operating leverage to kick in in the second half and vindicate I Squared Capital's decision to buy the group,” said Brian Han, director at Morningstar.
“While we chuckle at its characterisation of oOh!media's assets as ‘infrastructure’ the long-term structural appeal of outdoor advertising is real.
“We expect the usual private equity playbook of ‘cost optimisation’ to be deployed at oOh!media after the deal is completed in late 2026.
“This is likely to be above and beyond the current cost-cutting program.”
oOh! reported revenue up 1.4% to $340.87 million in the half year to June and the company posted a loss of $1.232 million.
The company described the revenue growth as "below expectations" in a softer than expected billboard market plus headwinds from the loss of the Auckland Transport contract.
“We expect a materially stronger second half and momentum is accelerating, with third quarter revenue pacing up double-digits, and more than 100% of last year’s closing Australian Q3 revenue already booked,” Taylor said.
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