Outdoor media company oOh!media has reported a 3% dip in revenue to $288.3 million in the half year ended 30 June 2024, pointing to a 'short-term market share loss' following the exit and renegotiation of several contracts.

Managing Director and CEO Cathy O'Connor pointed to the continued strengths of the out of home (OOH) sector on the background of a challenged Australian media landscape. SMI figures have shown OOH continues to outperform other traditional channels by growth, lifting 14.2% in the month of July, and accounting for 15% of all ad bookings in the 2024 financial year.

“For oOh!, our 3% revenue decline was attributable to the previously announced exit of the Vicinity contract, and recontracting of a significant street furniture contract that reduced non-media revenue in return for lower fixed rent. While this impacted revenue, it protected the gross profit margin. Adjusting for these contracts, revenue grew 3% for the period," said O'Connor. The Vicinity shopping centre contract was lost to Woolworth's retail media unit Cartology at the end of 2023.

Despite the revenue decline, the company's underlying gross margin expanded by 1.8 percentage points due to disciplined contract renewal. The underlying EBITDA margin remained stable due to tight expense management, while the underlying NPAT was down 11% to $18.2m and statutory NPAT was down 10% to $5.8m.

"We have taken decisive action to address the loss of market share, including accelerating the digitisation across our Retail portfolio to offset the Vicinity contract exit, renewing our sales leadership team and strengthening our sales capability. We are confident in these actions and seeing some positive early signs, with solid revenue growth returning in late Q3 and momentum building as we enter the critical Q4 period for the media market," said O'Connor.

Looking ahead, oOh! anticipates $38m+ in incremental annualised revenue from CY25 from new growth assets, in addition to $30m from contract wins announced in CY23. The company is also accelerating its digitisation efforts across its Retail portfolio, renewing its sales leadership team, and strengthening its sales capability to regain market share.

Looking to formats, and revenues for the group's Road (billboard) division declined by 3% to $100.8 million, while Street Furniture and Rail also fell 3% to $91.0 million and Retail was down 10% to $58.3 million. Adjusting for the non-renewal of the Vicinity contract, Retail was up 8% in the second half.

The declines were somewhat offset by upticks elsewhere with Fly up 6% for the half, and City & Youth growing 16% as audiences continue to return to the Central Business District office environments.

"While the overall media market remains challenging, the structural growth opportunity for Out of Home remains compelling. As the market leader, our focus remains on leveraging this opportunity to build profitable market share, while diversifying into new adjacent revenue streams, such as reooh (oOh!’s turnkey retail media solution), to deliver long-term sustainable earnings growth," said O’Connor.