oOh!media Limited (ASX:OML) has provided a trading update for FY24, reporting revenue growth of 2% in Q3 compared to the prior corresponding period.
In Q4, revenue growth is expected to increase by 3% to 6%. It is, however, lower than originally predicted due to a slowdown in short-term bookings.
For FY24, group revenues are expected to range between $633 million and $638 million.
In response to challenging media market conditions, oOh!media has announced a restructuring plan set to roll out in early 2025.
oOh! Chief Executive Officer, Cathy O’Connor, said: “In a challenging period for the wider media and advertising market, oOh!media is taking decisive action to ensure that we can operate sustainably through the cycle.
“Today we are announcing initiatives to drive revenue growth and right size our cost base. These initiatives will position us to protect our #1 market share and grow revenues and earnings as market conditions improve.
“We remain highly confident in the long-term attractiveness of the Out Of Home (OOH) category, which continues to outperform the wider media market, with its market share growing to 15.1%1 at the end of October 2024. As the market leader in Australia and New Zealand, oOh! Is strongly positioned.”
This restructure aims to simplify operations and drive stronger performance, with cost reductions focused on operating and non-rent costs of goods lines.
The company expects to achieve an operating cost base of approximately $150 million to $155 million in FY25, offsetting inflation and additional business investments.
oOh!media remains a dominant player in Australia's out-of-home (OOH) advertising landscape, holding a market share of 15.1% as of October 2024.
The company's focus on digital out-of-home (DOOH) advertising and programmatic capabilities positions it well in the industry.
The out-of-home advertising market faces several challenges, including increased competition from digital platforms and fluctuating consumer engagement patterns.
Economic uncertainties and evolving consumer preferences have forced advertisers to reconsider their strategies and budgets.
These factors necessitate innovation and adaptability for companies like oOh!media to maintain their competitive edge.
Despite the current challenges, oOh!media is confident in the long-term attractiveness of the OOH category and its ability to outperform the wider media market.
One potential growth opportunity in the OOH market is the expansion into emerging technologies such as augmented reality (AR) and interactive displays, which can enhance consumer engagement and create more immersive experiences.
The integration of data analytics and audience targeting can enable more personalised and effective advertising campaigns, driving value for advertisers.
Furthermore, partnerships with smart city initiatives and infrastructure projects could open new avenues for OOH media placements, increasing reach and visibility.
The trading update reflects a cautious yet optimistic outlook, with strategic initiatives aimed at driving revenue growth and maintaining market share. The company's strong presence in the OOH advertising sector and ongoing investments in digital capabilities highlight its commitment to staying competitive in a dynamic market.
At the time of publication, the oOh!media Ltd (ASX: OML) stock price was $1.13. The market cap was approximately $606.24 million.