QMS Media Limited (ASX: QMS) has announced its financial results for the 12 months to 30 June 2017 (FY17). Financial highlights include: –
- Revenue up 51% to $168.6 million.
- Strong Digital contribution – 57% of Group Media Revenue.
- Underlying EBITDA up 40% to $37.5 million (guidance: $37.0 million).
- Statutory NPAT up 26% to $16.7 million.
- Final dividend of 1.2 cps (fully franked), total FY17 dividend up 33% to 2.0 cps (fully franked).
- Dividend payout ratio of 40% of FY17 NPAT, consistent with target 30% – 50% NPAT payout range.
Operational highlights included 30 new landmark digital screens installed, bringing total network to 75 across Australia and New Zealand (above FY17 target of 68+), significant progress in broadening geographic footprint to provide a compelling offer to advertisers across key markets, QMS Sport acquisitions successfully integrated, with several new contracts/extensions secured and FY17 EBITDA contribution of $1.5 million exceeding initial guidance of $1 million, investment in digital, data and analytics continues, building QMS’ capabilities to deliver high-value, targeted campaigns across multiple platforms.
QMS Chief Executive Officer Barclay Nettlefold told us “Our record FY17 performance was driven by a relentless focus on our landmark digital rollout and the contribution from our New Zealand and Sports acquisitions. In the last two years, we have successfully executed on our growth agenda, tripling our portfolio of premium landmark digital sites and extending our geographic footprint in key markets. We see a lot of opportunity to continue to grow QMS Sport with advertisers valuing the ability to target highly- engaged sports fans via broadcast, digital viewership and live attendance. During the year, we switched on our first landmark digital sites in Sydney and Perth, and in July, we secured the Canberra Airport concession, further expanding our footprint and enabling us to develop the only landmark digital signs in the highly-regulated ACT market. Strong Out of Home industry growth continued in FY17, with Roadside Digital – the core of QMS’ portfolio – continuing to outperform. Advertisers are increasingly recognising the value of digital, which will only become more compelling as advancements in technology, data and analytics support greater engagement between advertisers and their target audiences. QMS is well placed to deliver strong earnings growth in FY18. We will continue to develop our landmark digital pipeline, and remain focused on opportunities to harness the value of digital, data and analytics to unlock additional value from our portfolio, both for advertisers and for our shareholders.”
The underlying EBITDA margin of 22% (FY16: 24%) reflects changes in QMS’ portfolio mix. Investment continued in systems, data and resources to support the business’ ongoing growth. Strong EBITDA cash conversion was maintained (FY17: 99%, compared to 90% in the pcp), with a continued focus on working capital management. Capex was relatively flat year-on-year, reflecting the rollout of the digital development pipeline. Net debt increased to $45.8 million or 1.2x underlying EBITDA during the year, as a result of planned investment in the digital rollout.
The Board has declared a final dividend of 1.2 cents per share (fully franked), bringing the total FY17 dividend to 2.0 cents per share (fully franked). The dividend payout ratio of 40% of NPAT is consistent with QMS’ policy to pay dividends of between 30% and 50% of NPAT.
QMS expects FY18 EBITDA to exceed $43m.