New revenue may be streaming in at outdoor advertiser oOh!media but the prospect of a negative state and federal election campaign could drive big brands – especially the banks – into hibernation over the coming months.
The company’s revenue for the 12 months to December 31 lifted 27 per cent to $482.6 million, with the fourth quarter particularly strong following the $570 million acquisition of street furniture and rail specialist Adshel in September.
But on Monday oOh! chief executive Brendon Cook warned an election season on two fronts could see a slowdown in major advertiser spending as brands seek to escape the negative noise.
Mr Cook said the company was slightly exposed until the polls closed as most of of oOh!’s infrastructure was on government-owned and private property.
‘The thing is, out-of-home (advertising) doesn’t necessarily benefit during an election,’ he said.
‘We don’t have the makeups to offset a slowdown’.
He said specific industries may even be political targets and therefore content to keep a low profile.
‘You’d have to ask the advertisers… but clearly with the royal commission, the banks and financial services will be thinking about things,’ he said.
Mr Cook told investors on Monday that big advertisers would likely ramp up their efforts when clear of the election.
Ooh’s underlying earnings are forecast to jump from $112.5 million in 2018 to between $152 million and $162 million in 2019, excluding about $7 million in accounting changes.
Operating expenditure is expected to increase by between five to seven per cent.
The company’s full-year profit slipped 4.3 per cent to $31.6 million, with the acquisition of ‘Commute’ helping push operating costs up by nearly a third to $113.2 million.
Commute added $65.9 million revenue to the coffers from September
The contribution from other assets, including Junkee Media, was flat at $18.4 million though Mr Cook said youth media platform remained an important part of the company’s future.
‘(Junkee) was not going to set the world on fire in terms of revenue growth, but we’re very happy,’ he said.
‘It represents a tremendous opportunity for us.’
oOh! will pay a final dividend of 7.5 cents, fully franked, down 2.5 cents from a year ago, which it said reflected a 71.7 million increase in the number of shares issued under July’s entitlement offer.
Shares in the company were 8.09 per cent, or 33 cents, lower at $3.75 at 1515 AEDT.
COMMUTE LIFTS OOH!MEDIA REVENUE
* Net profit down 4.3pct to $31.6m
* Revenue up 27pct to $482.6m
* Final dividend 7.5 cents, fully franked, down 2.5 cents from a year ago