Lamar CEO Sean Reilly said Lamar will resume capital expenditures and acquisitions in an appearance at the Goldman Sachs Communicopia Conference.
On spending money again.
The first thing is beginning to play a little offense…we are beginning to do that by freeing up some capexp dollars and some acquisition dollars…that’s the first thing…we have seen a nice rebound in our programmatic business…this month we may do as much programmatic business in Sept 20 as we did in sept 19…political book of business is pacing substantially ahead of the last cycle…the tone of business feels good…there are some weak geographics, primarily in the west…
What’s needed for a full out of home recovery.
Most of the verticals are normalizing…local is still substantially stronger than national. To truly rebound we need that national…the vertical that’s still struggling is amusement, entertainment and sports…we need to have that rebound as well…it’s not just events organizers…it’s all the ancillary activity that they generate…without the big trade shows Vegas won’t be Vegas…One thing we are seeing a little recovery in is big tech. Lamar has the largest painted wall in New York City…Apple just bought it and they’re paying a big rate through the end of the year…you’re talking more than $200,000/month just to rent that wall.
On national sales.
Here’s what John Miller is telling me. He’s our head of sales. Activity…is almost back to March levels. There is some buzz…because they aren’t targeting the largest DMA’s the dollars aren’t as much. National brands are beginning to find their voice…the dollars aren’t pouring in as much to New York, Chicago, LA.
Cost Cuts
The news there is good. We’re going to wring about $75 million our of our costs. A little better than the $60 million we put out there. Assuming that next year is a recovery – 7% year over year – about half of that $75 million comes back into our expense base…commissions…cash bonuses for general managers…but about half of it won’t…That’s good news…
Capital Expenditures
We dramatically curtailed our capexp. I’ve got a working number I’m throwing out for next year…I’m thinking $100 million in total capexp, $50 of it growth and $50 of it maintenance…Maybe it’s a little bigger than that number…There’s some pent up demand…from the digitals we didn’t do this year.
New Digital Signs next year.
That number is going to be around 300
Pricing
I’m happy with how we are hanging in there on rate in most of our markets. The recovery is in rate…The larger markets is a different story. It depends on where you are and what your product mix is…Los Angeles is struggling for us…you go to a Dallas…the inventory we have is moving…between those two extremes is Atlanta…
Lamar closed the day up 2.9%. Outfront was up 3.2%. Clear Channel Outdoor was up 0.74%. The S&P 500 dropped 0.5%.
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