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oOh!media Limited, strong audience and revenue recovery

Team Veye | 27 Feb 2021 ASX - OML
oOh!media Limited, strong audience and revenue recovery

oOh!media Limited (ASX: OML)

oOh!media Limited (ASX: OML) on 22 February 2021 announced its financial results for the year ended 31 December 2020

oOh! reinforced its market leading position by increasing its market share in Australia and New Zealand for the Out of Home segment due to the COVID-19 pandemic. It also implemented a series of measures to strengthen its financial position and reduce its cost and capital expenditure base by over $120 million.

(Chart Source: Trading View)

The Company experienced a strong recovery in revenue across key formats in the final quarter of 2020 which has continued into 2021 as people movement restrictions have eased. Overall Q4 paced at 70% of Q4 2019 versus 57% in Q3.

Financial Highlights

  • Q4CY20 revenue in Retail and NZ was over 90% of the prior corresponding quarter (Q4CY19). The recovery has continued into 2021 with total revenue for January 2021 pacing at 80% of January 2019 levels.
  • Road, Retail, Street Furniture and NZ revenue levels for January 2021 were at close to 100% of January 2019 revenue levels
  • Fly and Locate continue to be impacted by significantly reduced passenger numbers and CBD audiences.
  • Overall Commute revenue declined by 37% on the prior year to $148 million
  • Retail revenue declined by 24% to $106 million
  • Revenue for Fly declined by 65% to $23 million.
  • Locate revenue declined by 68% to $14 million.
  • Underlying EBITDA of $63.2m in CY20 compared to $139.0m in CY19
  •  Underlying NPATA loss of $8.0m compared to $52.4m profit in CY19
  •  Reported Net Loss after Tax of $35.7m for CY20 (post AASB16)
  • As on 31 December 2020, Net debt was $111 million; a reduction of $243 million from 31 December 2019.
  • As on 31 December 2020, the Company’s gearing ratio (Net Debt / Underlying EBITDA) was 1.8 times, compared to the bank covenant level of 4.0 times (reducing to 3.25 times by September 2021).
  • Net fixed rent temporary expense savings of $63m in CY20
  •  Capital expenditure reduction of $49m vs. February 2020 guidance
  • Operational expenditure savings of $16m (excluding JobKeeper)
  • In December 2020, oOh! extended its bank facilities with existing bank syndicate members with a total three-year $350 million facility maturing in December 2023.
  • No dividends were payable for CY20.
  • CY21 guidance: Capital expenditure for CY21 is expected to be lower than CY19 ($56m) (Data Source – Company Reports)

 

Veye’s Take

OML remains focused on capitalising on the key structural drivers of growth in Out of Home and leveraging its diverse product portfolio, backed by data, to deliver results for advertisers. OML continues to manage costs and liquidity to ensure the resilience of the business and leverage improved market conditions. The stock remained in negative territory from December 2020. It has just come above its support area. A strong bullish candle on the charts forming ”Bullish engulfing” indicates its upside potential. This is further supported by RSI. Veye maintains a “Buy” on “oOh!media Limited” at the current price of $1.810

Disclaimer

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