Transcription of Finance News Network Interview with oOh!Media Group Pty Limited (ASX:OML) CEO, Brendon CookLelde Smits: Hello I’m Lelde Smits for the Finance News Network and joining me today from oOh!Media Group Pty Limited
(ASX:OML) is its CEO, Brendon Cook. Brendon congratulations on having just returned to the Australian Securities Exchange.
Brendon Cook: It’s a pleasure to be here.
Lelde Smits: oOh!Media is an outdoor media organisation which has just listed again on the ASX. Could you explain to us how the Company makes money?
Brendon Cook: We have outdoor advertising assets on roads, airports, retail environments, universities, cafes, pubs and social sporting environments. And effectively, we provide a platform for engaging consumers when they’re away from home. We do that through a variety of traditional type products, right through to new age digital signs that in fact, allow us to integrate and engage consumers and their mobile phones in a unique way.
Lelde Smits: The Company was taken private in 2012. Can you explain to us why did you choose to return to public life?
Brendon Cook: I think the shareholders determined that it was in a prime opportunity with the growth profile that the out-of-home market has, to realistic end. It provided us the chance to recapitalise our debt and position the Company strongly to reinvest into digital assets, which are providing this unique opportunity to engage customers.
So we’re in the formative stages of that re-change of the out-of-home sector to a very new medium, a very new age medium. One that totally takes advantage of the mobility of society and the engagement they have via mobile online. And so the chance was now to re-establish the business into its new position and take the growth forward from here.
Lelde Smits: If we can look closer at your IPO, your issue price was $1.93. What market cap does that now put on the Company, now that you have listed and what PE (Price To Earnings) ratio does that represent?
Brendon Cook: We have a market capitalisation of just over $289 million, which puts an enterprise value of over $365 million and a PE ratio of 13 times.
Lelde Smits: Your initial public offering was aiming to raise about $170 million. How much did you raise and where do you plan to deploy the funds?
Brendon Cook: We raised what we set out to raise, which is exactly $167.3 million. And it allowed us to pay down debt, pay out our deferred payment for the acquisition of iCore from Channel 10, as well as the adviser fees.
Lelde Smits: CHAMP Private Equity has indicated that they won’t sell a stake in the Company. Who sold stock into the IPO and what kind of interest will CHAMP retain?
Brendon Cook: None of the existing shareholders sold any stock. The capital raising was only about primary, which is therefore about the debt which existed within the business. CHAMP have retained approximately 32 per cent of the organisation, WPP PLC (LON:WPP) around eight per cent and management around 1.4 per cent. The rest has been raised on the market.
Lelde Smits: One of the Company’s rivals, APN Outdoor Group Limited
(ASX:APO) listed recently. How does oOh!Media see itself positioned in the outdoor media industry?
Brendon Cook: We’re the market leader with about 34 per cent of the revenue in the industry. We also have the most diverse range of products. As I mentioned previously, across road, retail, airports, cafes, universities, social sporting environments. We also are reality, a new out-of-home media company.
We have the largest array of digital signage; over 1,700 units delivering the biggest audience reach in Australia. And we’ve also developed proprietary programs that deliver content and an interaction capability, across multiple screens. Not just digital screens, but mobile screens as well. So we really see ourselves as taking location based advertising, connecting it with consumer and being the facilitation with mobile online in the way society’s really being, and always on society.
Lelde Smits: What is the Company’s reach currently, and where are you targeting for future growth?
Brendon Cook: We see ourselves as investing in our existing product range. We currently have over about 40 per cent of the revenue in the road environment, about 70 per cent in the retail environment and about 70 per cent in the airport environment. And by investing in new digital signage and the way we can engage and interact with customers, we see strong growth moving forward; as we continue to take share from the $13.4 billion worth of advertising market that exist, from both other traditional media and pc online.
Lelde Smits: What are your financial forecasts for the year ahead?
Brendon Cook: Between 2013 and 2015 which is the forecast year, we’ll have CAGR (Compound Annual Growth Rate) revenue growth of about 4.6 per cent. However, that will flow through to EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) CAGR growth of over 21 per cent, effectively heading towards $48-$50 million range in EBITDA.
This growth is driven by the fact that we’ve been able to consolidate, reinvest in our digital strategies and growth strategies via digitalisation and consumer engagement.
Lelde Smits: Final question Brendon, how are you aiming to position oOh!Media in its first year of trade back again on the ASX?
Brendon Cook: We’ll continue to invest in our leading portfolio of signs in the various environments, with our digital strategy. This digital strategy is designed to take us from 25 per cent of our revenue coming from digital, to over 50 per cent.
Importantly, it leverages our capability to engage consumers as they’re away from home, as we deliver on our strategy of being more than just an out-of-home company, being a new out-of-home company that delivers both mobile and social online engagement, as well as the ability to deliver traditional advertising values for our clients.
Lelde Smits: Brendon Cook, congratulations again on having just returned oOh!Media to the ASX.
Brendon Cook: We’re very excited about the future.
Ends
