On 25 February 2019, oOh! Media Ltd (ASX: OML), an Out of home advertising company from the Media & Entertainment industry group, announced its FY2018 full-year results for the period ended 31 December 2018.
During the period, the company reported an increase in the revenue by 27% to $482.6 million. The company made a gross profit of $225.7 million, up by 29% as compared to the previous corresponding period. The gross profit margin during the period was 46.8%. However, the period reported a continuous investment in the talent and skills in core areas of data science, content, cybersecurity and client partnerships which increased in the operational cost. The Underlying EBITDA during the period was $112.5 million which resulted in the EBITDA margin of 23.3% which was 23.7% in CY2017. The underlying NPATA increased by 18% to $51.1 million as compared to CY2017. However, there was a fall in the NPAT by 4% to $31.6 million on CY2017 as a result of acquisition cost. 70% of the EBITDA during the period was driven by an increase in the operating cash flows by 41%. The capital expenditure increased by 20% to $40.8 million on CY2017. The Like-for-like capital expenditure increased by 2% to $34.6m. The Like-for-like capital expenditure excluded the commute expenses, however, included investment in the Companyâs operating platform. The company declared a final full-year dividend of 11 cents per share fully franked which will be paid on 26 March 2019. The company has also announced an option for Dividend Reinvestment Plan where the last date for receipt of the election notice for participation in the DRP is 6 March 2019, i.e. after the record date on 5 March 2019.
The full year result was driven by the successful integration of street furniture and rail, which are Commuteâs highly complementary segments. In the fourth quarter, the company reported a strong revenue generation through its commute segment.
The Road segment, the company reported an increase in the revenue by 13% driven by strong double-digit sales growth through its portfolio of high quality digital and classic assets in key locations.
Â The revenue in its retail segment declined by 2%. The fly segment reported an increase in revenue by 23%. The significant contribution in the revenue was through QANTAS In-Flight, whose results were beyond expectations.
The Locate segment reported double-digit growth in the revenue by 25%.
The other sources of revenue were Junkee Media and Cactus Imaging. During the period, the Junkee Media was continuously progressing which highlighted the oOH!âs potential to target millennial audiences with a combination of platforms.
During the period, the company arranged $450 million in new debt facilities for refinancing existing debt as well as to fund the acquisition of the Commute business partly. By February 2019, the facility increased by $70 million and it reached $520 million. As of 31 December 2018, the company had withdrawn $410 million from the facility. It resulted in the net debt/pro forma4 Underlying EBITDA ratio to reach 2.6 times as of 31 December 2018. At the same point in time, the business also generated a strong cash flow where the operating cash flow increased by 41%.
For FY2019, the company is confident about the continuous growth in the Out Of Home sector in 2019. For the FY2019, the company expects its Underlying EBITDA to be in a range of $152 million-162 million which excludes the integration costs of circa $7 million as well as the impact from the change in accounting standards. The guidance also includes an increase in the operating expenditure between 5% to 7% on the
pro-forma along with the operating cost base.
In the last six months, the stock has generated a negative return of 13.56%. At present, the stock is trading at A$3.760 (AEST: 3:08 pm, 25 February 2019), down by 7.843% as compared to its previous trading dayâs closing price. The stock has a market capitalization of A$965.49 million and a PE ratio of 18.95x.
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