Ocean Outdoor swings to earnings as market recovers

Digital billboard operator Ocean Outdoor reported a 44.3% improvement in revenue in a full-year trading update on Wednesday, to £124.4m.

The London-listed company said it swung to positive unaudited adjusted EBITDA for 2021, of £18.6m, from EBITDA losses of £0.4m in the prior year.

Operationally, Ocean said it experienced a “strong” bounce back in demand during 2021.

It said the “year of recovery” for the ‘Digital Out-of-home’ (DOOH) sector began during the second quarter, with client activity and sequential demand tracking the vaccine rollout and phased lifting of restrictions.

The company said it also experienced a renewed confidence among high-spending advertising categories, with the ‘power brands’ committing a greater proportion of their budgets to DOOH, as well as an increasing number of new adopters.

With nearly all of Ocean’s portfolio of digital screens located at prime retail and urban roadside locations, the group said it was able to fully capitalise on the recovery.

Footfall across prime retail destinations, including Westfield shopping centres and major city centres, had returned “strongly”, while roadside traffic across most of its territories was back to pre-pandemic levels by the end of the year.

In terms of recovery trends across its territories since the half-year, bookings and demand in the Netherlands and the Nordics had continued to improve.

Ocean said all territories recorded a strong fourth quarter – its key trading period – with revenues up 67.5% compared to the last three months of 2020, and 7.2% compared to the pre-pandemic comparator in 2019.

As well as the return of established users of DOOH, Ocean said it was seeing an “increasing number” of new adopters, driven by changing consumer behaviour as well as its new ‘Deepscreen’ 3D screen product.

Since launching in the summer on the Piccadilly Lights, Ocean had rolled out Deepscreen across its large-format full-motion screens in all of its territories.

In terms of organic growth, the group said it signed a series of new contracts across all territories during 2021

The board said some of the most high-profile included being appointed outdoor media partner for the St James Quarter in Edinburgh – a 10-year DOOH contract with a lifetime value of £25m.

It also became the exclusive outdoor media partner for the Canary Wharf Group, with a long-term contract value of £30m, and was appointed strategic media partner for Fisketorvet – a shopping, dining and leisure destination in Copenhagen – which would carry a lifetime value of £7m.

“The medium went from strength to strength during 2021 as Covid restrictions were lifted and vaccination programmes rolled out,” said chief executive officer Tim Bleakley.

“As populations were liberated the advertisers targeted out of home, with audiences coming back fast and strong in the environments where Ocean is focussed.

“Ocean was at the forefront of driving the recovery, with DOOH playing the most significant role by providing a high impact and dynamic means to target highly valuable audiences efficiently and cost effectively.”

Bleakley said the company had also combined the “fast audience recovery environments” of prime retail and urban roadside locations with “unique innovations”, such as its 3D Deepscreen proposition.

“All this, though, has been underpinned by the incredible efforts of Ocean’s people, who have been amongst some of the most passionate and committed work forces in any sector to return to working out of home.”

At 0812 GMT, shares in Ocean Outdoor were up 6.52% at 9.8p.