Ocean is the leading digital player in European Out of Home media. The portfolio spans multiple European markets and is centred on a UK core and management team, both with a proven track record of delivering growth and innovation. Out of Home media has been outperforming other traditional media for the best part of the last decade as the adoption of new technologies and data has transformed its commercial impact for brands. The structural drivers behind this growth have not gone away. Unsurprisingly, the national lockdowns experienced over the last year have had a dramatic impact on the Out of Home industry, whose lifeblood is footfall and population mobility. Ocean has suffered alongside all its peers but outperformed many. Management actions on operating costs and re-mixing lease structures has protected from the worst of the impact. However, Ocean is still at the early stages of the post pandemic recovery and FY21 will still see the effect of Q1 lockdowns across Europe. The full revenue and margin recovery that we expect is likely to be phased across FY21 and FY22. Despite Ocean’s outperformance and premium positioning, the shares trade at a valuation discount to the peer group and UK Media sector. This feels overly harsh for a business with a proven track record of delivery.
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Initiation of Coverage – Good Boat, Rising Tide
- Published:
28 Apr 2021 -
Author:
Iain Daly -
Pages:
28
Ocean is the leading digital player in European Out of Home media. The portfolio spans multiple European markets and is centred on a UK core and management team, both with a proven track record of delivering growth and innovation. Out of Home media has been outperforming other traditional media for the best part of the last decade as the adoption of new technologies and data has transformed its commercial impact for brands. The structural drivers behind this growth have not gone away. Unsurprisingly, the national lockdowns experienced over the last year have had a dramatic impact on the Out of Home industry, whose lifeblood is footfall and population mobility. Ocean has suffered alongside all its peers but outperformed many. Management actions on operating costs and re-mixing lease structures has protected from the worst of the impact. However, Ocean is still at the early stages of the post pandemic recovery and FY21 will still see the effect of Q1 lockdowns across Europe. The full revenue and margin recovery that we expect is likely to be phased across FY21 and FY22. Despite Ocean’s outperformance and premium positioning, the shares trade at a valuation discount to the peer group and UK Media sector. This feels overly harsh for a business with a proven track record of delivery.