Here’s a summary of Sean Reilly’s comments at yesterday’s JP Morgan Investor conference, summarized and analyzed by SignValue.
A good mood at last week’s OAAA conference
The mood was very constructive…I’m not saying it was all rainbows and butterflies but it wasn’t gloom and doom…the best take away I got was having…good conversations with our large national accounts and their view of the rest of the year and it’s…steady as she goes…
Tariffs have impacted vinyl sourcing
We print on 2 substrates from a single provider called CircleGraphics. They’re a great company. One of the substrates is only sourced in China – PEC. That’s our fully recyclable substrate, mostly on posters. The big ones you see on the interstate are PVC… PVC is sourced here in America…so we’re converting from PEC vinyls to PVC. There’s a slight extra cost..but it’s not going to be a supply chain issue…the other impact of tariffs…would be CapEx associated with digital deployment …Our main provider of of digital units is Daktronics they’re a US based company. No issues there. We do have a Canadian supplier and they assure us that they have stacked up enough units across the border to take care of us so in the near term we’re in good shape.
Lamar is back in the M&A market
This year we’re going to do well over $200 million for a variety of reasons. I would point to little bit of pent up demand… we pushed off some activity and then the other thing is you know we’ve got one that we’re kind of excited about that is of a larger size…I can’t talk about it too much because it hadn’t closed yet but…it’s very close
Acquisition Multiples
From the seller’s point of view if it’s a pure fill-in it can look like 13-14 times…by the time we have our expense controls, put in the synergies happen which happens very quickly…it’ll look like a forward multiple in the 10-11 range…12 months after we have it.
Lamar may buy $20 million in easements this year
In a low interest rate environment it’s hard to buy easements because cap rates get up here …and while our industry doesn’t talk the language of cap rates our land owners do…So in a higher interest rate environment we can get better deals…We’re finding that today in a different interest rate environment not as high as has been but still up there from a historical point of view…we can get within our hurdle rates and so we’re doing more…we’re we’re probably going to spend something in the neighborhood of 20 million this year buying easements.
SignValue’s Take:
To receive a free morning newsletter with each day’s Billboard insider articles email info@billboardinsider.com with the word “Subscribe” in the title. Our newsletter is free and we don’t sell our subscriber list.
Paid Advertisement
