The oOh Media Ltd (ASX: OML) share price is shooting higher in Monday morning trading amid the release of the company's optimistic first-half results for FY22.
Shares of the outdoor advertising and media company currently trade for $1.347 each, an 9.07% gain on their previous closing price.
Let's go over the highlights from the company's report.
What did oOh! Media Report?
- Revenue up 10% year-over-year (YoY) to $276.1 million
- Underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) up 62% YoY to $51.5 million
- Adjusted net profit after tax (NPAT) of $20.4 million, up from $20.2 million in the prior period
- Gearing ratio halved to 0.4 times (from 0.8 times on December 21) and net debt reduced by 37%
- Fully franked interim dividend of 1.5 cents a share for a 44% payout ratio
oOh! Media's said its results were buoyed by increased investment in its Out of Home media format.
The end of COVID-19 lockdowns and falling case numbers also appear to have positively influenced the company's fundamentals, with its road, retail, and street furniture advertising sales above 2019 pre-COVID levels.
The fully franked dividend of 1.5 cents a share has a record date of 1 September with the anticipated payment date of 22 September.
The company also announced an on-market share buyback of 10% of its issued shares for roughly $75 million. That's expected to begin next month.
What else happened in 1H FY22?
oOh! Media expanded its digital Out of Home business, adding 378 new locations. These included 21 retail centres and 11 road digital advertising platforms.
The company says it has strengthened its balance sheet by reducing net debt, which fell to $39.8 million in June 2022 from $63.5 million on December 21.
oOh! Media also launched Poly, described as a "creative and content innovation hub". The company says this helps its advertisers expand their reach and increase the return on investment from their advertising spend.
What did management say?
oOh! Media Chief Executive Officer Cathy O'Connor said:
Our strategy remains clear and consistent. As the market leader across Australia/New Zealand, we are exceptionally well placed to capitalise on the growth of Out Of Home as advertisers increase their investment into this media format. We continue to participate in the emerging programmatic digital Out of Home marketplace with our programmatic revenue more than doubling in the second quarter of CY22 compared to the first quarter.
What's next?
For the third quarter of FY22 and beyond, the company stated its fundamentals remain "compelling" and that it is positioned to derive growth from its Out of Home revenue stream.
Revenue was said to be 37% higher than the same quarter in CY21, while capital expenditure is expected to increase significantly.
Capital expenditure will be between $25 million to $35 million, an increase from $15 million in CY21. Reasons for the increase were to accelerate revenue growth and for concession renewals.
oOh! Media share price snapshot
The oOh! Media share price is currently down 21% in 2022 so far. That's significantly below the performance of the S&P/ASX 200 Index (ASX: XJO) which has lost around 5.5% over the same period.
oOh! Media has a market capitalisation of around $802 million including today's recent price action.
