As much as is possible for an Out of Home media specialist, Ocean has had a good pandemic. Cost actions and management responses were swift to protect the P&L and balance sheet from the worst impacts yet the group did not go into stasis. Underpinning the H1 results are notable new contract wins and innovation roll outs. Ocean went into the pandemic as a clear digital leader in the sector and is exiting with that position enhanced. Relative to the peer group; the current valuation discount suggests the market has yet to catch up with the reality of Ocean’s progress over the last 18 months.
This sector leadership is important to the Ocean equity story. Out of Home media had been outperforming other areas of ad spend heading into the pandemic, with Digital Out of Home leading the charge. Ocean is the leading digital player in the sector and we see them as ideally positioned as the recovery accelerates.
Within the H1 numbers it is the Q2 vs Q1 sequential improvement that demonstrates just how steep revenue recovery is likely to be. Our previous estimates had been cautious about the timing and pace of this recovery, although we had greater visibility over the inevitable cost rebuild. Our upgrades today (+102% for FY21 EBITDA and +32% for FY22) reflect this accelerating revenue dropping through accordingly.
Sign up for free to access
Get access to the latest equity research in real-time from 12 commissioned providers.
Get access to the latest equity research in real-time from 12 commissioned providers.
H1 results – Strong recovery momentum, material upgrades
- Published:
14 Sep 2021 -
Author:
Iain Daly -
Pages:
7
As much as is possible for an Out of Home media specialist, Ocean has had a good pandemic. Cost actions and management responses were swift to protect the P&L and balance sheet from the worst impacts yet the group did not go into stasis. Underpinning the H1 results are notable new contract wins and innovation roll outs. Ocean went into the pandemic as a clear digital leader in the sector and is exiting with that position enhanced. Relative to the peer group; the current valuation discount suggests the market has yet to catch up with the reality of Ocean’s progress over the last 18 months.
This sector leadership is important to the Ocean equity story. Out of Home media had been outperforming other areas of ad spend heading into the pandemic, with Digital Out of Home leading the charge. Ocean is the leading digital player in the sector and we see them as ideally positioned as the recovery accelerates.
Within the H1 numbers it is the Q2 vs Q1 sequential improvement that demonstrates just how steep revenue recovery is likely to be. Our previous estimates had been cautious about the timing and pace of this recovery, although we had greater visibility over the inevitable cost rebuild. Our upgrades today (+102% for FY21 EBITDA and +32% for FY22) reflect this accelerating revenue dropping through accordingly.