The oOh!Media Ltd (ASX: OML) share price could come under renewed pressure following the removal of 18 of its premium billboard faces between Sydney Airport Holdings Pty Ltd's (ASX: SYD) domestic and international airports and the WestConnex freeway.
The company's revenues from its outdoor billboards tumbled in the wake of the coronavirus pandemic, as many Australians found themselves forced to stay at home. Even those who could freely leave their properties were unlikely to go anywhere near the airports where oOh!Media has some of its strongest presence.
This lack of traffic and wider virus-fuelled investor angst saw the share price tumble more than 81% until rebounding on 30 March.
Up 119% from the 30 March lows, the oOh!Media share price is down 3.6% in early afternoon trading and remains down 58% since 2 January. By comparison the All Ordinaries Index (ASX: XAO) is down 10% year-to-date.
What does oOh!Media do?
Brendon Cook founded oOh!Media in 1989 under the name Outdoor Network Australia. It's since become one of the largest operators of outdoor advertising in Australia.
Among other outlets, the company operates digital billboards in South Australia, New South Wales and the Northern Territory. It counts both Qantas Airways Limited (ASX: QAN) and Sydney Airport as major customers.
What's the longer term impact on the oOhmedia share price?
According to the Australian Financial Review, the 18 billboards represent about 20% of oOh!Media's coverage in the Sydney Airport vicinity.
Asked about the removal, an oOh!media representative stated:
The billboards in question are no longer available to advertisers as a result of a New South Wales government land acquisition for the Sydney Gateway project. The company still retains a strong local presence, with 69 advertising faces in the airport precinct.
The company may still be compensated for the expected loss of revenues. But shareholders will need to be patient as that is still being assessed.
According to a representative of Transport for NSW:
In preparation for work to start, Transport for NSW has been working closely with all affected landowners and tenants, including oOh!media, to negotiate land access and agree on compensation. This matter is currently before the independent Valuer-General and Transport for NSW cannot make further comment until the process is complete.
Compensation may be coming. And traffic will eventually return to Sydney Airport. But in the meantime, the oOh!Media share price is unlikely to recover its pre-pandemic levels.
