What fuelled oOh!media’s (ASX:OML) market-leading position in 2020?  

  • February 22, 2021 05:55 PM AEDT
  • Team Kalkine
    Team Kalkine
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What fuelled oOh!media’s (ASX:OML) market-leading position in 2020?  

Source: Shutterstock 

Summary

  • oOh!media maintained its market-leading position in 2020.
  • The company experienced revenue recovery and boosted its market share in ANZ. 
  • It is well positioned to capitalise on Out Of Home recovery, backed by improving audience and market conditions.

Shares of oOh!media Limited (ASX:OML) soared 14.478%  to AUD 1.700 on 22 February 2021 following the release of annual report for the 12-month period ended 31 December 2020.

Amid the challenging pandemic-stricken period, especially for the Out of Home segment, the company boosted its market share in Australia and New Zealand, thus maintain its market-leading position. The company is well-positioned to capitalise on the strong audience and revenue recovery witnessed in Q4 2020 and early 2021, according to CEO Cathy O’Connor.

In order to address the pandemic-related challenges, oOh!media implemented various measures, enabling the company to boost its financial position and lower its cost and capital expenditure base by more than AUD 120 million.

Source: OML ASX Update, dated 22 Feb 2021

Must read: Cathy O'Connor joins oOh!media (ASX:OML) as CEO; Sees robust growth opportunities

The 2020 Financial Performance

Backed by robust audience and revenue recovery in Q4, oOh!media registered revenues at 70% of the prior comparative period vs 57% in Q3. In Q4, the company reported significant revenue recovery across retail, road, street furniture and NZ. The strong recovery in revenue across key formats has continued into the current year, owing to easing people movement restrictions.

Here are the highlights of CY20 financial performance:

  • In the calendar year 2020, oOh!media reported a revenue decline of 34% to AUD 426.5 million. 
  • Underlying EBITDA stood at AUD 63.2 million as against AUD 139.0 million in the previous calendar year.
  • Underlying NPATA loss was AUD 8.0 million compared with AUD 52.4 million profit reported in the previous year.
  • The reported net loss after tax stood at AUD 35.7 million.

Strengthened Balance Sheet

The balance sheet was further strengthened with more than AUD 120 million cash savings in CY20.

  • Capital expenditure reduction of AUD 49 million vs February 2020 guidance
  • Net fixed rent temporary expense savings of AUD 63 million
  • Operational expenditure savings of AUD 16 million excluding JobKeeper 
  • The gearing ratio stood at 1.8 times vs 2.6 times on 31 December 2019
  • Net debt was AUD 111 million, down from AUD 346 million.

FY21 Outlook

The uncertainty continues due to the ongoing COVID-19 impact and movement restrictions, especially in the rail, fly, and office environments. Revenue has bounced back strongly in crucial formats, and for the first month of 2021, it is currently pacing at 80% of the PCP level.

OML is promoting its regional, suburban, and metropolitan audience strength as the market leader. Moreover, the company continues to manage liquidity and costs to ensure the business' resilience and capitalise well on improved market conditions.

Capital expenditure in the calendar year 2021 is anticipated to be less than the previous year due to the timely decisions on concession renewals and revenue growth opportunities.

Also read: Entertainment Stocks Affected by Extended Lockdown, When Is the Happy Hour Coming Back? VRL, OML

 

 


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