OOh! expects election hit

Revenue jumps but poll season tipped to weigh

OUTDOOR advertiser oOh! Media says revenue is booming following the $570 million acquisition of street furniture and rail specialist Adshel, but the prospect of negative state and federal election campaigns could drive big brands – especially the banks – into hibernation in 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 a standout following the September purchase and rebranding of Adshel to Commute.

But chief executive Brendon Close Change Cook (pictured) yesterday 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 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 might 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 yesterday that big advertisers would probably ramp up their efforts after 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 5 per cent and 7 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 in revenue to the coffers from September. The contribution from other assets, including Junkee Media, was flat at $18.4 million, although Mr Cook said the 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.

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.