Ocean Outdoor swings to loss as pandemic batters advertising sector
Billboard operator Ocean Outdoor today said it expects to post a loss in 2020 after repeated coronavirus lockdowns devastated the advertising sector.
The digital ad firm, which operates sites including Piccadilly Lights, forecast adjusted earnings to fall from £33m to a loss of £400,000. Revenue is expected to drop 38 per cent to £86m.
It follows a torrid year for the advertising sector as the outbreak of Covid-19 led to the sharpest fall in ad spend on record.
Outdoor advertising was among the hardest hit, as lower spend was compounded by declining footfall in city centres and shopping malls.
Ocean said the easing of restrictions in the summer led to a recovery in bookings and revenue in the third quarter.
But a fresh lockdown in the run-up to Christmas prompted brands to pull spend and defer campaigns, resulting in a weaker end to the year for the company.
Shares in Ocean were down just over 2.4 per cent in morning trading.
Despite the impact of the pandemic, Ocean said it had ploughed ahead with its expansion across Europe.
The group secured a 10-year deal with Westfield shopping centre in the Netherlands worth €7m. It also expanded its roadside network in the country and added 58 shopping centres to its portfolio across the Nordics.
Ocean also expanded its roadside network in UK cities, including its landmark billboards in Birmingham.
“The way Ocean has navigated its way through 2020 and created a much stronger business in terms of our digital out-of-home network, product offering and efficiencies, is an extraordinary achievement and I thank everyone across the business for their endeavours,” said boss Tim Bleakley.
“We have in place a world-class digital platform that enables us to offer a hybrid of long-term impact and short-term flexibility, allowing brands to respond in real time to the evolving and changing environment. The business is ready for the economic fight back when social restrictions are lifted and brands re-engage with the rapidly growing out-of-home audiences.”
Ocean said it had taken a number of measures to mitigate the impact of Covid-19, including cutting overhead costs by 15 per cent and securing £35m of debt facilities.
The ad firm withheld guidance for 2021, but said it was well-placed to capitalised on the recovery in ad spend when restrictions are eased.