Transcription of Finance News Network Interview with oOh!MediaLimited (ASX:OML) CEO, Brendon CookCarolyn Herbert: Hello I’m Carolyn Herbert from the Finance News Network and joining me from oOh!Media Limited
(ASX:OML), to discuss its first half 2016 results is CEO, Brendon Cook. Brendon, welcome back.
Brendon Cook: Thanks Carolyn.
Carolyn Herbert: You’ve just reported your half-year results for FY16. What were the highlights?
Brendon Cook: Very pleasing result, our revenues were up just over 18 per cent. Our EBITDA was up towards 33 per cent, our NPAT around 35 per cent. And importantly for our shareholders, we are paying an interim dividend of four cents, which is up over 42 per cent on last year.
Carolyn Herbert: Now to performance, you’ve continued to substantially grow your digital presence and revenue. So how have you managed to achieve this?
Brendon Cook: Again that’s very pleasing for us. When we went to listing in December 2014, we said we hoped to be between 45 to 55 per cent of our revenue,coming from digital assets by 2018. And clearly at the half-year, we’re just under 45 per cent in 2016 and so we’re well on track to beat that position considerably. And expect to be there by early in the New Year.
We’ve done it a number of ways. We’ve purchased a business called Inlink Group Pty Limited, which provided us office tower and media, which was pleasing to expand our network. We’ve increased our digital assets across all our other products. And in particular, what is pleasing for us is we presumed the difficult area of digital, which is the road regulatoryarea, that we would get to 50 signs by 2018. And we’re now on track to have those 50 all built by the end of this year, 2016. So again, the culmination of the asset creation, adding some new infrastructure and organic growth, has been a key driver in achieving our digital growth.
Carolyn Herbert: What about increased inventory and contract extensions?
Brendon Cook: Again one of the great strengths of out-of-home for us, as a business is the diversity of our products. It means we also have a diversity of landlords and that’s important from a risk negation area. And we have been able to secure and renew most of our key contracts. We’ve managed to win some new contracts, including Brisbane Virgin Terminal, extend Melbourne T4 Terminal. And they are all very pleasing in the way that we approach the structure of the business, in terms of the long-term capability.
Carolyn Herbert: Looking at mobile integration with out-of-home advertising. How has this performed and what sort of trends are you observing here?
Brendon Cook: I think the great thing is that the unmissability of out-of-home match with mobile, is very important. We’re seeing a lot of studies worldwide that are confirming this, and for uswe’re seeing it ourselves. And we always as a business have seen ourselves as a location business first, and we’ve developed our first out-of-home company in the world to employ editors. We’ve developed our own online products and we recently acquired Junkee Media to add to that capability as well.
But in terms of the core product of mobile and social, it is really the emerging area that out-of-home’s strength will be. As mobile grows, as the use of mobility in usingonline connections outside grows, so will mobile. And that’s why we see the Google’s, the Facebook’s, the Apples, the Samsung’s, the media itself, players like Iconic in the online space, use the medium because it’s a great connector of social, mobile and online connectivity.
Carolyn Herbert: As you said Brendon, oOh!Media’s recently entered into an agreement to acquire Junkee Media. So how does this fit with the company strategy?
Brendon Cook: One of our core criteria’s for acquiring a business is -does it extend our audience and does it extend our capability? And Junkee obviously extends audience in terms of the products they have had, and their success within a millennialmarket. Most importantly for us, is the capability around creativity and being a mobile first company and a video first company. And what we’ll see over the coming years is that more and more of the ads that you see online, will be made in about five seconds in length. They will be full motion, they will be soundless first, captioning second and with sound, third.
And so that obviously links very strongly into our full motion networks, in what we call our walk by and stand by environments. Shopping centres, airports, office buildings etc. And so that combination of how we develop content and develop content messages that work with contextuallyrelevant advertising, becomes a key driver in how we see the future of out-of-home.
Carolyn Herbert: Finally Brendon. What’s your outlook for the second half and what’s your focus for the next 12 months?
Brendon Cook: We’re very pleased to be able to reaffirm our guidance of $68 million to $72 million EBITDA, that’s pleasing. And we certainly see out-of-home and it is happening globally, not just here in Australia, will continue to grow as advertisers start to understand the quality of how we’ve changed the medium. How we’ve changed the network and what we can actually deliver with both the digital and classic out-of-home products. And in reality, this is a trend that’s happening globally and we see Australia as being a key driver, as we have some of the best product already if not the best in the world, in terms of that expansion of the product across the industry.
Carolyn Herbert: Brendon Cook, thanks very much for the update.
Brendon Cook: Pleasure Carolyn.
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