APN Outdoor revenue is up four per cent for FY17, to $342.9m from $330.9m the year before.
Like other outdoor advertising companies, APN saw a rise in its digital revenue, up 13 per cent while revenue from classic (print) adverts has stabilised. Classic revenue was at $214.3m for FY17, down 1 per cent from $216m the year before. For now, print remains the source for the majority of income for APN at 62 per cent, with digital supplying 38 per cent of total revenue, from 125 screens.
Rival outdoor media businesses oOh! and QMS revealed that digital media had overtaken print for the first time in their results released yesterday.
APN Outdoor had an underlying earnings before interest and tax depreciation, and amortization (EBITDA) of $90.3m up 4 per cent from $86.69 the year before, and underlying NPATA of $53m up 2 per cent from $51.94m. Statutory NPAT was down 9 per cent to $44m from $40.04m after $6m of non-recurring items post tax.
The company says it renewed many of its significant contracts in the past year, such as the Sydney Buses tender on improved financial terms, the Tullamarine Freeway contract in Victoria, the Adelaide Metro contract with around 5,000 panels, an extension of the PTA contract (Perth rail and billboards) and the Metro Trains Melbourne (MTM) with over 200 cross track and roadside billboards.
[Related: APN appoints new CEO]
APN says it is looking at a number of opportunities to digitise in the Tullamarine Freeway and the MTM projects in particular. There are further plans for a digital billboard conversion rollout with 20 to 25 new digital screens to be commissioned this year. However, transit panels, such as signs on the sides of buses, was stabilised, up 1 per cent from $99.5m to $100.2m, which the company says it a strong result given the lack of digitisation opportunities. APN says classic and digital inventory both have their place in the market, with 47 per cent of the Australian outdoor scene now being digital.
James Warburton, CEO of APN Outdoor was appointed in the role at the end of January.
He says, “The FY17 result was a credible outcome in a challenging environment. Underlying EBITDA of $90.3m was within our guidance range provided in August, albeit at the lower end of the range. At only circa 6 per cent of the overall advertising industry the Out-of-Home industry has untapped potential. In addition, our contract renewal exposure for 2018 and 2019 has reduced to single digits given the recent renewals won including Sydney Trains just last week. APN Outdoor has a clear strategy going forward, focused on the evolution of APN Outdoor as we shift to become an audience-led, sales centric media business.”
The company has also listed among its expenses, a point of sale business being restructured at its printing facility. Its production company, GSP, is a Sydney based printer. Other non-recurring costs include transactions relating to the terminated merger with oOh! Media last year and costs relating former CEO retiring.
Other factors APN attributes its success to is its investment in research, looking at neuroscience in transit and a digital campaign post analysis for its customers, along with the finalisation of a $200m senior debt facility to support future growth investment.
APN will be investing around $2m during the year in new systems to support an audience and customer led go to market strategy. Overhead growth for FY18 is expected to be 6-8 per cent reflecting a one off cost base reset to support grow. APN says its capital expenditure for FY18 is expected to be in the range of $25m-$30m.
Comment below to have your say on this story.
If you have a news story or tip-off, get in touch at editorial@sprinter.com.au.
Sign up to the Sprinter newsletter