oOh!media, facing a “challenging” advertising market, announced a restructrure to simplify operations and save up to $15 million in costs.
The outdoor media group, which has been tracking behind the industry sector's growth of 8%, is taking action to protect market share and operating margins.
“In a challenging period for the wider media and advertising market, oOh!media is taking decisive action to ensure that we can operate sustainably through the cycle,” said oOh! Chief Executive Officer, Cathy O’Connor.
“Today we are announcing initiatives to drive revenue growth and right size our cost base. These initiatives will position us to protect our #1 market share and grow revenues and earnings as market conditions improve.”
In a trading update to the ASX, oOh! said the September quarter delivered revenue growth of 2%.
The December quarter is expected to improve to between 3% and 6%, which is lower than originally anticipated, with reasonably strong forward pacing not converting to better results as short-term booking activity slowed.
Group revenue calendar year 2024 is expected to be between $633m and $638m.
Forward bookings for the March quarter indicate an improvement.
oOh! will be restructuring in early 2025 to simplify its operations and drive stronger performance.
Cost reductions focused on operating and non-rent cost of goods lines, more than offsetting the impact of inflation and additional business investment aimed at driving revenue growth.
As a result, oOh! expects to have an operating cost base of $150m to $155m in the 2025 calendar year.
The company expects to report adjusted underlying EBITDA (earnings before interest, taxes, depreciation, and amortisation) of between $125m and $128m, before accounting for a one-off restructuring charge of between $3m and $5m and the previously announced $4m in one-off consulting costs.
After accounting for these one-off charges, calendar year 2024 adjusted EBITDA is expected to be between $116 million and $121 million.
The leading Australian player in outdoor media reported a 3% fall in revenue to $288.3 million for the half year to June. Underlying net profit after tax slipped 11% to $18.2 million. Statutory profit was down 10% to $5.8 million.
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