oOh!media (ASX: OML) has reported stronger first-quarter revenue and outlined a new operational excellence program expected to deliver $12 million in annualised pre-tax cash benefits from financial year 2027.
The out-of-home media group recorded Q1 revenue growth of 7% in Australia and 4% across the group, slightly ahead of the February projection.
Q2 media revenue is pacing on a similar trajectory, with Australian revenue up 6% and group revenue up 2% against a strong prior corresponding period that delivered 19% growth.
The company has also exited its reo retail media investment and launched a broader efficiency program that will reduce headcount by 82 roles, representing approximately 9% of its workforce.
Operational Program Launched
The operational excellence program targets process simplification, organisational redesign, systems and platform enablement, material and service sourcing optimisation, and improved business intelligence.
The program is expected to deliver $10m per annum in sustainable pre-tax cash benefits from financial year 2027 onward, while the reo exit will add a further $2m EBITDA saving from 1 January 2027.
oOh! expects first-half one-off costs of approximately $6m to deliver the targeted savings, with underlying adjusted operating expenditure for the first half expected at slightly below the prior corresponding period and further savings expected in the second half.
The operational excellence program is forecast to have a neutral earnings impact in calendar year 2026 before the full run-rate benefit emerges in calendar year 2027.
Capital expenditure guidance for calendar year 2026 has been reduced to a range of $45m to $55m, down from the $55m to $65m range provided in February.
Retail Channel Improves
Retail out-of-home revenue returned to growth in March and April following the launch of new industry audience measurement system MOVE, data from which shows the average oOh! retail panel delivers 59,000 impressions, around 60% more audience than the 37,000-impression industry average excluding oOh!.
Australian retail revenue pacing moved from a 3% decline in February year-to-date to 4% growth in March and 3% growth in April.
First-half gross margin is expected to be softer than anticipated due to industry-wide pressure in billboards—which represent approximately 40% of group revenue—while newer premium billboard contracts have also carried higher rents.
The Outdoor Media Association reported a 1% decline in overall billboard category gross revenue during Q1.
Growth across oOh!’s portfolio continues to be led by airports and rail, while billboard revenue declined in the quarter.
Out-Of-Home Market Share
The Australian out-of-home market continued to build share during the March quarter, rising from 16.9% to a record 17.9% of total agency media spend.
oOh! said the sector’s structural growth remains supported by urban population growth, digitisation, and advertiser demand for high-impact public environments.
The company operates more than 30,000 assets and reaches 99% of metropolitan Australians each week.
oOh! chief executive officer James Taylor said the company was executing its strategy to strengthen market leadership.
“The launch of MOVE is a growth catalyst, clearly demonstrating the superior quality and unmatched scale of our network to advertisers,” he added.
Sales Execution Gains
The company has also reported improved sales execution after restructuring its sales organisation around a “simpler, faster, smarter” program.
The program has reduced brief-to-booking times by 30% across key formats including street furniture and rail.
Revenue from strategic partnership clients increased 15% year-on-year to $188m, while revenue per sales full-time equivalent improved by 17%.
The company recorded Australian media revenue of approximately $600m in calendar year 2025.
