Here are four things about Link Media Outdoor (the out of home subsidiary of Boston Omaha) which Billboard Insider learned by reading Boston Omaha’s 2022 10k.
Acquisitions, acquisitions, acquisitions
Link Media Outdoor has closed 20 out of home acquisitions totaling $240 million since 2015. That’s a lot, but maybe not so much when you remember that Lamar spends approximately $250 million a year on acquisitions.
Don’t expect dividends
Lamar Advertising and OUTFRONT are REITs which much dividend 90% of their income to shareholders. Clear Channel Outdoor hopes to one day become a REIT after shedding non-REIT assets and debt. Boston Omaha has other plans: “We do not expect to pay dividends for the foreseeable future, and our stockholders will not be guaranteed, or have contractual or other rights to receive dividends.” Not paying a dividend means that Boston Omaha will retain more cash for acquisitions and growth. A good move as long as you have high yielding investment projects.
Expect to see more easement purchases.
The Boston Omaha team is heavily invested in real estate and the 10k mentions that easement purchases are a good use of out of home capital. The 10k says “95% of our billboards are on leased property.” That implies that Link Media Outdoor owns land under one out of 20 billboards. Lamar owns land under one out of eight billboards. Billboard Insider expects to see more easement purchases by Link Media Outdoor.
Plenty of Dry Powder
Boston Omaha has $59 million in cash and treasuries as well as a $500 million unused shelf registration. Link Media Outdoor has only $28 million of bank debt against $14 million of 2022 cashflow (EBIDTA) which implies there is an additional $42 million of debt capacity at Link Media Outdoor assuming a debt limit of 5 times debt/cashflow(EBIDTA). Add it together and Boston Omaha has $601 million of dry power to finance growth.
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