Ocean Outdoor mulls sale after full year profits surge

Ocean Outdoor UK BFI IMAX Top Boy

Outdoor ads specialist Ocean Outdoor has reported a 44% rise in full year revenue and made an £18m pre-tax profit as the firm said it was also considering selling itself.

Ocean, which is listed in the London Stock Exchange, said full year revenue was £124.4m, which is a 44.3% rise on last year’s £86.2m.

It also trend last year’s pre-tax loss of £0.4m into a whopping £18.6m.

Ocean Outdoor

The company, which manages high profile digital billboards such as the iconic Piccadilly Lights in London and St James Quarter in Edinburgh as well as various Westfield shopping centre locations, said it experienced a strong bounce back in demand during 2021,

The year of recovery for the DOOH sector began during Q2, with client activity and strong sequential demand tracking the vaccine rollout and phased lifting of restrictions. 

It also experienced a renewed confidence among the 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, reflecting the long term structural tailwind within the sector.

Ocean Outdoor NL - Westfield_Carousel_CocaCola
Back to busy: Ocean saw a boost as lockdowns gave way to a return to a new kind of normal.

Possible sale

Last November Ocean announced that it had initiated a strategic review to evaluate potential strategic and financial alternatives to maximise shareholder value. 

The company said it felt it was undervalued, with the share price continuing to face technical trading challenges unrelated to Ocean’s strong business fundamentals and intrinsic value. 

Today it updated the market by saying it is continuing to evaluate a number of options, including a potential sale, following interest and conditional offers received which may or may not lead to a transaction. 

Ocean’s CEO, Tim Bleakley, said: “The medium went from strength to strength during 2021 as Covid restrictions were lifted and vaccination programmes rolled out. 

“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. 

“We have helped to deliver memorable, engaging campaigns that transcend the physical display, with images captured and shared across multiple online news and mobile platforms, on both a national and global scale. 

“The pandemic has seen the medium underpin its value as a vital amplifier of other media platforms that either cannot reach younger demographics as effectively or deliver the broadcast brand fame the DOOH medium is so strong for.

“Ocean has also combined the fast audience recovery environments of prime retail and urban roadside locations with unique innovations, such as our immersive 3D Deepscreen proposition, which has been launched across multiple countries. 

“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.”

With nearly all of Ocean’s portfolio of digital screens situated across prime retail and urban roadside locations, the firm said it has been able to fully capitalise on the recovery. 

Footfall across prime retail destinations, such as Westfield shopping malls and major city centres, has come back strongly whilst roadside traffic across most of its territories was back to pre-pandemic levels by the year end.

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

Ocean Outdoor SE - DeepScreen Samsung
DeepScreen’s 3D imaging is proving popular among brands.

As well as the return of established users of DOOH, Ocean said it has seen an increasing number of new adopters, driven by changing consumer behaviour as well as its new product, Deepscreen, the company’s 3D screen development. 

Since launching in the summer on the Piccadilly Lights, Deepscreen has been rolled out across Ocean’s large format full motion screens across all our territories to huge effect.

Outlook 

Despite starting the year with Omicron and restrictions to leisure and hospitality across some of its countries, Ocean said trading has started very strongly and expects revenue and adjusted EBITDA for FY2022 to be ahead of FY2019 reflecting the return of audiences and brands to OOH environments.