Ocean’s 2018 revenues pegged at £62.2 million on pro forma basis
By M4G Bureau - February 18, 2019
Group EBITDA increased by 4.6% to £19.9 million, on a proforma basis, and £19.3 million on an adjusted basis
Ocean Outdoor, a leading operator of premium DOOH advertising in the United Kingdom, has announced a trading update for the full year ended 31 December 2018.
2018 was a pivotal year as Ocelot merged with the operating entities of Ocean in March, and the Group completed the acquisition of Forrest in June 2018. Forrest provides the Group with extensive coverage in Scotland and a significant additional digital development pipeline to augment its core organic plan.
The strong trading performance the Group saw in Q3 continued through Q4 2018. For full year 2018, Ocean Group revenues on an adjusted basis, are expected to be £59.5 million. On a pro forma basis, where all operating companies are assumed to have been held from 1 January 2017, the company expects full year revenues to be £62.2 million, up 15.2% on the previous year.
Group EBITDA increased by 4.6% to £19.9 million, again on a proforma basis, and £19.3 million on an adjusted basis. (i) The adjusted basis refers to 12 months of Ocean and 7 months of Forrest; (ii) the Proforma Group EBITDA includes addbacks for expenses relating to listed status to allow comparison to prior year. The company was private in 2017 and did not incur the administrative and directors fee costs associated with being a listed entity).
As previously highlighted, during 2018 Ocean incurred higher rent expenses in Scotland as it invested in the digitisation of the acquired Forrest estate, and site leases were renewed for 15 years. The company expects those investments to contribute to Group growth and profitability from 2019. Revenues for Ocean Scotland (formerly Forrest) had already started to improve in the latter half of 2018.
As previously announced, the Group continued throughout the year to invest significantly in expanding its commercial teams both nationally and regionally. Ocean also increased investment in areas covering data, content and marketing with a specific focus on enhancing its product offering and networks to deliver greater levels of engagement for consumers and benefits for advertisers.
With 93% of revenues from digital locations (up from 89% in 2017), 2018 marked another year of successful site launches, including the completion of the Westfield London expansion and the Westfield Square screen, one of the largest full motion video enabled screens in London, and the launch of Two Towers Leeds. During the year, the Group’s portfolio increased in size from 175 locations to 254. Since year end, the award of the Southampton City Council contract will add further digital locations to the estate, as announced in January 2019.
Overall, Ocean remains focused on its three core strategic tenets of driving organic growth, technical innovation, and accretive inorganic consolidation. In addition, the Board continues to review its capital position and the best use of resources, which includes a return of capital to shareholders. The company expects to provide further feedback with the release of full 2018 financial results in March.
Commenting on the update, Tim Bleakley, CEO, said: “The Group has performed extremely well during a period where the management has also overseen both our launch as a public company and the important Forrest acquisition, which is testament to the strength of our team and the growing demand for Ocean’s DOOH offering. Forrest has been successfully integrated (now Ocean Scotland) whilst the expansion of the Westfield London asset, which was ready before the key Q4 trading period, benefited from record footfall levels, including a 49% increase on Christmas Eve.
“Digital Out-Of-Home is delivering brand impact to desirable audiences at scale in a trusted advertising environment, helping the OOH sector grow share in 2018 and beyond. We therefore feel confident about the growing momentum within Ocean and the sector, despite the wider uncertain UK economic backdrop.”