oOh!media (ASX:OML) has reported a strong performance in the first half of 2025, but faces challenges as it moves into the latter part of the year. The company registered a revenue increase of 9% year-on-year, totaling $691 million. This growth was primarily driven by a robust first half, where revenue surged by 17%. However, the company anticipates a softer second half due to pressures on advertising budgets and the loss of its Auckland Transport contract.
Newly appointed CEO and managing director James Taylor, who took the helm in December, expressed optimism about the opportunities within the Out-of-Home (OOH) advertising sector. He highlighted the necessity for improved execution speed and the potential to leverage the company’s national network. Taylor emphasized the appeal of OOH, citing its transparency, brand safety, and the unique capability to customize messaging according to time, location, and context. He noted that OOH has achieved a record 16.5% share of agency media spending, reinforcing its status as a growing segment within physical media.
Strategic Initiatives and Technology Enhancements
To address current market challenges, Taylor outlined strategic priorities aimed at enhancing the company’s performance. He indicated plans to unlock additional value from the network through smarter pricing strategies and improved performance metrics. Furthermore, Taylor advocates for accelerated technology initiatives, which include system integration and increased automation. He stated that while the existing technology program is “fully costed,” he aims to expedite its implementation to provide clients with utility sooner.
A significant upcoming milestone is the relaunch of the MOVE 2.0 audience measurement system on March 9, 2025. Taylor described this initiative as a transformative step in audience measurement, promising greater granularity and insights into how location and time of day impact advertising effectiveness. He anticipates that this upgraded framework will benefit the retail sector, which has been grappling with fierce competition, particularly in the fast-moving consumer goods (FMCG) market. Taylor acknowledged that the full potential of the retail network is not yet visible to advertisers until the MOVE 2.0 system is operational.
Financial Performance and Market Outlook
Chief Financial Officer Chris provided further insights into the company’s financial performance, revealing that the second half of the year witnessed a more subdued growth rate of 2%. This decline is attributed to external factors such as reduced consumer spending and the non-renewal of the Auckland Transport contract. He noted that total agency media revenues in Australia fell by 5% during the latter half of the year, according to the Standard Media Index.
The financial results also reflect impairment charges related to the New Zealand business, totaling $13 million, following the loss of the Auckland Transport contract. Operating cash flow improved to $82 million, a rise of $35 million, and free cash flow reached $28 million, an increase of $20 million.
The company reported mixed performance across its advertising formats. Billboards experienced a 10% increase, driven by demand for large-format inventory, while street and rail revenue grew by 11%, largely attributed to strong outputs from Sydney Metro and various council rollouts. Conversely, retail revenue declined by 6%, reflecting intense market competition. The overall share of the OOH market in Australia and New Zealand stood at 35% in 2025, a slight decrease from 36% in 2024.
Looking ahead, management indicated that Australian first-quarter media revenue is currently pacing at +7%, while the overall group is pacing at +2%. Taylor expressed confidence in the first quarter but cautioned against making predictions for the second quarter, emphasizing its historically high benchmarks. The company expects to see an incremental contribution of $27 million from new contracts in 2026.
In closing, Taylor addressed competitive dynamics within the sector, noting that QMS represents a significant competitor. He reiterated oOh!media’s belief in the value of independence and specialization within the OOH industry. A more comprehensive strategy update is scheduled for the company’s Annual General Meeting in May, along with plans for an Investor Day later this year.
About oOh!media: oOh!media Limited operates predominantly in the Out-of-Home media sector within Australia and New Zealand. Its portfolio includes various advertising formats such as digital and classic roadside screens, signs in retail precincts, and advertising in public transport environments.
