QMS Media Ltd (ASX: QMS) released its H1 FY 18 results on Friday. Here are the highlights:
- Revenue was up 25% to $99 million
- Underlying EBITDA was up 27% to $22.7 million and net profit was up 11% to $8.3 million
- Digital media revenue was 66% of total group revenue compared to 43% H1 FY 17
- 70% cash conversion
- 24 landmark digital sites were switched on in H1 FY 18 and management expect over 112 landmark digital sites by 30 June 2018
- Management provided a full year FY 18 guidance of $44 million – $46 million
QMS Media's strategy of leveraging off sport and digital media certainly appears to be paying off.
The continued investment in data analytics capabilities is exciting as it provides QMS Media Ltd with valuable insights for their clients which would allow them to charge more for their services.
It's worth pointing out however that the digital media and data driven strategy is one that most players in the market are implementing. oOh!Media Ltd (ASX: OML) for example, released its results today showing that its digital strategy had delivered double digit profit growth for the full year 2017.
QMS Media's point of differentiation from its competitors might be in sports where it is now the largest on-field sport media network. The successful renewal of the Football Federation Australia (FFA) signage services agreement complements QMS media's existing rights in Rugby Union, Netball, AFL and V8 Supercars.
I think it is the right strategy for management to continue extending their presence in sport given their strength in this area.
It is also encouraging to see QMS Media investing in their leadership team. They recently appointed John O'Neill as CEO who has more than over 20 years' outdoor media experience in the industry having worked for Ooh!Media Ltd before. Group CEO Barclay Nettlefold will oversee the company's strategic direction and potential overseas expansion opportunities.
It will be interesting to see how the APN Outdoor Group Ltd (ASX: APO) results, which are due to be released tomorrow, compare to Ooh!Media and QMS Media.
