Here are five things Insider learned about Outfront Media after reading Outfront’s 2018 10-k.
Big Markets. The 10-k says Outfront targets top market, high profile locations. 49% of Outfront’s revenue comes from its top 5 markets, all of which are major metro areas.
Outfront’s top 5 markets account for 44% of Total Outfront Revenues
New York 21%
Los Angeles 15%
Miami 5%
San Francisco 4%
State of New Jersey 3%
It’s all about digital. Jeremy Male’s legacy will be determined by how Outfront company manages its digital screen expansion. The number of transit digital displays increased 200% during 2018 and will increase even faster in the next few years. There will be 50,000 screens in New York alone.
Outfront Digital Billboard and Transit Faces at 2017 and 2018
Lots of non-conforming billboards. “We estimate that approximately 75% of our billboard structures in the United States are “legally non-conforming” billboards meaning that they were legally constructed under the laws in effect at the time they were built, but could not be constructed under current laws.” So says the Outfront 10-k. The high ratio of non-conforming boards is due to the fact that most of Outfront’s plant is in big cities with restrictive sign codes. Non-conforming boards are a plus because no one can jump your lease – if a structure comes down it can’t be rebuilt. A non-conforming board also implies a restrictive zoning code which means less competition and higher ad rates. Non-conforming boards can be a risk. Some communities don’t allow you to rebuild a non-conforming board when it is destroyed or damaged.
Maintenance Capexp averages 1.4% of Outfront’s annual revenues. Here’s the data for the past five years.
Outfront Maintenance Capexp as a % of Revenue
Lighting upgrades. Outfront has converted 36 of 51 metro markets to high efficiency lights. Smart move. Insider achieved a 33% return on capital by converting one of his signs to high efficiency LED’s. The cost savings from upgrading LED’s occurs regardless of economic conditions. More efficient lights recession proof your company. You should be upgrading now if you haven’t already.
[wpforms id=”9787″]
Paid Advertisement
