oOh!media reverses early gains after announcing cost cuts
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More news: Shares in oOh!media slumped on the ASX after rising earlier in the session, after the outdoor advertising company announced cost cuts of at least $15 million in response to tough market conditions.
oOh!media shares were down 1.9% to $1.15 by 2:20pm AEDT, having initially gained more than 4% in early trading.
oOh!media flags $15m in cost cuts amid challenging market
The news: Outdoor advertising firm oOh!media has outlined a restructure and cost cuts in response to challenging media market conditions.
The numbers: The country’s largest outdoor advertising firm said it would cut costs by at least $15 million to offset the impacts of inflation and additional business investment, which will result in a cost base of $150 million to $155 million in 2025.
Underlying earnings for the 2024 calendar year are expected to be between $125 million and $128 million, before one-off restructuring charges of $3 million to $5 million.
oOh!media shares are up 4.3% to $1.23 in early trading on the ASX and over the past 12 months has plunged 16.1%.
The context: The company said revenue increased 2% in the third quarter of the year, but fell short of expectations in the fourth quarter, improving between 3% and 6% as short-term booking activity slowed.
Full-year revenue is expected to be between $633 million and $638 million, barely changed from last year’s $634 million.
In August, the company announced it had suffered a 3% revenue slide in the June half following the loss of a major contract with Vicinity shopping centres.
E&P Capital’s analyst Entcho Raykovski said the calendar year figures should be taken as a positive by the market as it is in line with consensus estimates, especially given the company's recent share price weakness.
What they said: “In a challenging period for the wider media and advertising market, oOh!media is taking decisive action to ensure we can operate sustainably through the cycle,” oOh!media CEO Cathy O’Connor told investors.
The source: ASX announcement
