oOh!Media puts Junkee Media on the market
ASX-listed oOh!Media is planning to sell its youth-publishing business Junkee Media in the second half of the year following a strategic decision to focus the business on the out-of-home advertising sector.
The outdoor media business will appoint advisers to sell the digital publishing business, with Junkee Media chief executive Neil Ackland to remain at oOh!Media in his ongoing chief content, marketing and creative officer role.
Junkee Media CEO Neil Ackland will remain at oOH!Media.
“The Junkee team have done a great job building a powerful media brand, and the recent long-term partnerships with Google and Facebook are testament to the value inherent in the business and its promising future,” oOh!Media CEO Cathy O’Connor said.
“We believe this decision gives Junkee the best opportunity to build on its legacy and become even more successful for many years to come.”
oOh!Media bought an 85 per cent stake in Junkee Media from founders Mr Ackland and Tim Duggan for $11.1 million in June 2016 before buying the remaining 15 per cent several years later.
The acquisition was part of a digital strategy designed to link mobile, social media and billboard advertising. Junkee leveraged the relationship to promote its brands on oOh!Media’s billboards.
Junkee Media houses a number of youth-focused brands including Junkee, travel title awol and Punkee. It also runs an inhouse creative team that produces content for brands.
oOH!Media snapped up Junkee Media a year after Nine Entertainment (owner of The Australian Financial Review) acquired Junkee rival Pedestrian.TV.
Junkee’s Facebook, Google deals
It is the first major move by Ms O’Connor, who joined oOh!Media from radio business Nova Entertainment in January.
On Tuesday, Junkee Media announced it had signed a three-year deal to produce its Facebook Watch daily news show, The Junkee Takeaway, for Facebook. It signed a deal with Google to be paid for its journalism in February.
oOh!Media will now focus on its out-of-home advertising business to capitalise on future growth.
“Our strategy is to concentrate on out of home and do what we do best – making brands unmissable through our unique advantages in delivering audiences at scale, leveraging our exclusive data sets and showcasing out-of- home’s creative power,” Ms O’Connor said.
“Our corporate purpose is to make public spaces better, which means we will use our digital media assets to go beyond just advertising, providing contextually relevant information and content that enhances public spaces.
“We believe this gives us clear differentiation and increases the value of our assets and our advertising.”
In February, oOh!Media posted earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $59.9 million for the calendar 2020 year, down from $125.3 million in 2019, with a net loss of $23.9 million. The underlying loss was $8 million, compared to a $52.4 million profit the previous year.
Revenue from “other” media – digital media assets Junkee Media and digital printer Cactus Imaging – declined 12 per cent. In the first half of 2020, it booked a $2 million impairment of the value in Junkee.
Ms O’Connor said the Junkee divestment was part of new initiatives to be announced over the coming months.
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