A decision by Vicinity shopping centres, the owners of Chadstone, Australia’s largest shopping mall, to dump oOh media as their billboard provider has resulted in a $37M hit on the Company’s bottom line.
In the first six months of 2024, oOh! media reported revenue of $288.3 million, down 3% profits were $18.2 million, down 11%.
Mumbrella described the result as “lacklustre” for the half, with its revenue, net profits, and overall market share down.
They pointed out that the out-of-home market capturing a record 15% market share of agency spend during the first half of 2024.
CEO Cathy O’ Connor claims that the result was “was attributable to the previously announced exit of the Vicinity contract, and re-contracting of a significant street furniture contract that reduced non-media revenue in return for lower fixed rent”.
O’Connor said, “while this impacted revenue, it protected the gross profit margin”, and adjusted for these contracts, revenue actually grew 3% for the half.
Partially due to the exit of the Vicinity contract, revenue in the billboard division declined by 3% to $100.8 million, revenue in street furniture and rail declined by 3% to $91.0 million, while revenue in the retail space dropped by 10% to $58.3 million.
Vicinity Centres signed a new contract with Cartology, a media company owned by supermarket giant Woolworths, in late 2023.
Chief executive Cathy O’Connor said she expected high single-digit revenue growth for the industry in the rest of 2024, with oOh! media expecting to add $38 million from new contract wins. oOh! media declared an interim dividend of 1.75c a share.
