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oOh!media says sharp decline in bookings forces $27m downgrade

Shares in oOh!media slumped by as much as 40 percent on Friday after the outdoor advertising leader revised its 2019 guidance, citing a significant decline in bookings and “general economic uncertainty.”

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The company, which owns wide format business Cactus Imaging, told the ASX its earnings for the year will be about $27 million (17 percent) lower than earlier forecast, down from between $152 million-$162 million to be in the range of $125 million-$135 million.

“While the first half performance was tracking in line with the company’s previous stated guidance, tracking of the company’s trading activity for the second half of FY19 has revealed a significant decline in overall media advertising spend,” oOh!media said in a statement.

“In line with the challenging market conditions being experienced by the wider media market, the Company’s advertising bookings for the third quarter of 2019 experienced a sharp decline compared to the bookings on-hand at the same time last year.

“oOh!’s earnings are traditionally significantly weighted towards the second half of the year, and to the fourth quarter in particular. While oOh!’s bookings for the fourth quarter are indicating improvement on the third quarter, and on the fourth quarter of the prior year, trading in recent weeks indicates that this improvement will be less than anticipated and will now be insufficient to offset the significant decline currently being experienced in the third quarter.

“The current general economic uncertainty and challenging market conditions makes predicting activity more difficult.”

Shares in the company fell by 40 percent on Friday to a low of $2.32, before recovering to $2.93, a drop of about 27 percent. At the close on Monday, shares were $2.70.