Cathy O’Connor, CEO of oOh!media, has told B&T that she was “disappointed” in the business’ top-line growth figure in its half-year 2024 financial results but it was going to have a “strong end to the year”.
oOh! reported a three per cent drop in revenue to $288.3 million by exit and renegotiation of contracts compared to the previous half-year. However, its gross profit margin had a small 1.3 per cent gain.
O’Connor said, however, that the best was yet to come this year from oOh!, given its bumper new contracts and continued structural change making OOH more enticing than other digital formats.
“We’ve been pretty upfront that we were disappointed in the top line with 3.3 per cent underlying growth versus a market of eight per cent. I think importantly, we’ve moved through it. But the positives of the results are the new assets that we’ve brought into the network which will again boost our revenue later into the year and beyond,” she said.
“We continue to run a very efficient business. We had margin expansion and gross margin expansion in an environment where we are renewing contracts. So that is an incredibly good achievement and that sets us up for really strong profits moving ahead… I’m feeling confident and importantly we’ve turned a corner. It’s going to be a strong end to the year.”
oOh! attributed much of its revenue decline to the exit of the Vicinity Retail Group contract. However, it reported 16 per cent growth in its City & Youth (formerly Locate) sector and six per cent in its Fly sector.
Road dropped three per cent “partially due to the exit of the Vicinty contract,” Street Furniture and Retail dropped three per cent, “Partially attributed to the decline in classic Street Furniture revenue offsetting strong digital growth. Revenue was also partly impacted by the decline in non-media revenue associated with recontracting of one significant street furniture contract in return for lower rent”.
Retail dropped 10 per cent, again because of the Vicinity Group exit.
However, O’Connor said she was “delighted” to get Sydney Metro up and running after its “false start” a couple of weeks ago.
“We’ve got such pent-up demand for these really wonderful new Sydney CBD assets. It’s nice to be able to bring it all to life and we saw some of those advertisers up in lights, as they say, on brand new digital panels in Martin Place this morning,” she said.
O’Connor said that the new Metro line was incomparable to Sydney’s existing train network and that “advertisers are queuing up” to buy space.
“It is a step up both in the technology of the trains, the speed at which the trains move about the city, it’s just a wonderful improvement of the accessibility to the CBD. I don’t think the two assets are comparable. One of the beauties of Metro trains is that they’ve been purpose-built. So the way that the assets are integrated into the stations is fantastic. They haven’t been stuck up in odd places.”
Sydney Metro, along with the renewal and expansion of Victoria’s Department of Transport and Planning contract, provided confidence for the business.
However, while these new deals were exciting, O’Connor said that broader structural change was also playing to oOh!’s benefit — seeing the sector grow despite cost-of-living pressures squashing growth across other media.
“We have a structural shift towards OOH that is really withstanding the malaise in the broader consumer outlook. We have significant amounts of revenue moving towards OOH from channels such as FTA TV, driven by audience and the relative cost-efficiency in digital OOH and the way that it is a very efficient channel to get to a big audience very quickly,” she said.
However, she did caution that oOh! was “not bulletproof” but that its “pipeline” and the “breadth” of its category growth made her “pretty confident” that it would withstand any shocks in consumer sentiment.
