Insider has long wondered how to forecast maintenance capexp for a billboard company.  Maintenance capexp averages 2.1% of revenue at Lamar and Outfront as you can see from the following chart.  Clear Channel Outdoor Americas didn’t break out maintenance capexp.

$$$ in Millions

Insider asked two of the smartest minds in the business – Larry Roberts of Boardworks, Jim Matalone of Ashby Street – what they do.  He got some outstanding advice.

Jim Matalone, Ashby Street Outdoor

In my experience it is hard to find a consistent formula that works for all plants.   Of course it depends on average age of your structures, weather, etc.   Ashby averaged $33 per face with our first full year owning the CCO assets.  Some years that can be lower and other years can be higher depending on weather events.   When I am looking at an acquisition I usually estimate $50 per face (unless most of the inventory is less than 5 years old) per year.  That is usually a good conservative estimate.

Larry Roberts, Boardworks

We generally budget about $50 per month for structural and electrical maintenance/upkeep.  For digital faces we will budget $250 per month for repairs and maintenance.  This is high for newer faces but seems to work well for overall spreadsheet analysis when budgeting for multiple faces of varying ages and condition.  We find that there is a marked difference in costs associated with different  manufacturers.  Faces with a southern exposure tend to have a higher maintenance cost.

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