The oOh!Media Ltd (ASX: OML) share price was crushed 27.5% today after a painful earnings downgrade.
oOh!Media is an outdoor advertising and media business, it was founded in 1989 and has become one of Australia’s largest advertising businesses. Across Australia and New Zealand, Ooh! Media has more than 30,000 advertising billboard locations.
What Happened At oOh!Media?
In 10 days the company will be releasing its half year report, in which it expects to report revenue of $304.8 million for the June 2019 half year, an increase of 5% on a pro forma basis. It also expects to report underlying EBITDA (click here to learn what EBITDA means) of $56 million – down 2%.
However, whilst the first half was in line with guidance, the second half has revealed a significant decline in overall media advertising spend. The advertising bookings for the third quarter have experienced a “sharp decline” compared to the bookings on-hand at the same time last year. The second half, particularly the last quarter, are meant to be the best times of the year.
The company said the fourth quarter improvement won’t be enough to offset the decline, therefore guidance for FY19 underlying EBITDA is now $125 million to $135 million from $152 million to $162 million previously.
But, oOh!Media management did say that it’s on track for Commute cost synergies of $16 million with more in 2020.
Rask Media writer Max Wagner was right to question if oOh!Media was worth holding a couple of months ago. I think it would be better to own the shares in the free report below instead.
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