At time of writing, the share price of oOh!Media Ltd [ASX:OML] is up 5.88%, trading at $4.42 per share.
This comes as the company announced a 10-year street furniture contract with the Brisbane City Council via Adshel.
oOh!Media provides advertisers with access to a diverse range of audiences across its national portfolio of Out Of Home advertising spaces throughout Australia.
A win for Adshel’s new owner
The announcement of the new 10-year deal with the Brisbane City Council comes after the council voted to approve the contract with Adshel yesterday.
Adshel had been working on obtaining Brisbane City Council’s street furniture rights for a number of months. The win comes only two months after the company was acquired by oOh! for $570 million.
oOh! first announced the acquisition of Adshel in June of this year after a battle with APN Outdoor. According to the oOh!Media CEO, Brendon Cook, the purchase will lead to ‘cost synergies’ of between $15 million to $18 million from ‘leveraging combined infrastructure with duplicated resource rationalisation and reducing outsourcing costs’.
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OML intendeds to remove the Adshel brand before the end of the year as part of its integration strategy.
Can oOh!Media keep momentum?
Today’s victory will come with a sigh of relief from investors as OML’s share price has been on a steep decline since October. Before the nosedive, the company had been making steady gains on the year.
Investors will now be eagerly awaiting to news for The City of Sydney’s outdoor advertising tender.
The now absorbed Adshel was shortlisted in for the 10-year contract back in September of this year. Other shortlisted vendors include APN Outdoor and JC Decaux.
JC Decaux, which now plans to merge with APN Outdoor in November, will defend the contract it has held for the last 20 years.
JC Decaux entered the Australian market in 1997, winning the tender ahead of the Sydney 2000 Olympic Games. Since then it has held the rights for all street furniture including bus stops and telephone booths across Sydney’s CBD, Inner West and South Sydney.
The tender is expected to be considered by The City of Sydney in early 2019.
For Money Morning
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