oOh!media reported a 3% fall in revenue to $288.3 million for the half year to June, mainly due a short-term market share loss and changes in contracts.
The outdoor media specialist said it is tightly managing costs and taking decisive action to address revenue performance and regain market share.
Underlying net profit after tax was down 11% to $18.2 million. Statutory profit was down 10% to $5.8 million.
In its outlook report, oOh! Said September quarter media revenue was pacing up 2% but impacted by a weak July.
Momentum continued to improve through the quarter, with September pacing growing solidly, particularly in the road segment.
The company said December quarter growth was expected to be significantly stronger than the preceding quarters of the year.
The outdoor media market grew by 8% and captured a record 15% of advertising agency media spend in the six months to June.
“For oOh!, our 3% revenue decline was attributable to the previously announced exit of the Vicinity contract, and recontracting of a significant street furniture contract that reduced non-media revenue in return for lower fixed rent,” said CEO Cathy O’Connor.
“While this impacted revenue, it protected the gross profit margin. Adjusting for these contracts, revenue grew 3%.
“We have taken decisive action to address the loss of market share, including accelerating the digitisation across our retail portfolio to offset the Vicinity contract exit, renewing our sales leadership team and strengthening our sales capability.
“We are confident in these actions and seeing some positive early signs, with solid revenue growth returning in late Q3 and momentum building as we enter the critical Q4 period for the media market.
“We have a strong revenue pipeline, and anticipate securing at least $38 million in projected incremental annualised revenue from 2025 across a number of commercial contracts, including the renewal and expansion of Victoria’s Department of Transport and Planning, Australia’s single largest street furniture contract, and Melbourne Metro Tunnel greenfield sites.
“These are in addition to the $30 million projected incremental annualised revenue from contracts with Woollahra Council, Sydney Metro, and Sydney Metro Martin Place announced in CY23.
“While the overall media market remains challenging, the structural growth opportunity for out-of-home remains compelling.
“As the market leader, our focus remains on leveraging this opportunity to build profitable market share, while diversifying into new adjacent revenue streams, such as reooh (oOh!’s turnkey retail media solution), to deliver long-term sustainable earnings growth.”
The company declared a full franked interim dividend of 1.75 cents a share.
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