APN Outdoor solid on debut
APN Outdoor shares lifted more than 8 per cent on the billboard company’s ASX debut yesterday.
APN Outdoor shares lifted more than 8 per cent on the billboard company’s ASX debut yesterday, signalling investor appetite remains strong for companies with a proven earnings track record, even in the face of a flurry of public offers crowding the market.
Shares in the outdoor advertising firm rose as much as 8.6 per cent in a weaker market, before finishing the session 4 per cent higher at $2.65.
APN Outdoor manages over 50,000 billboards — ranging from digital sites to transit, rail and airport advertising, across Australia and New Zealand. It is forecast to report net profit of $28.3 million for the 2015 financial year on revenue of $271.5m.
The company claims a 27 per cent share of the Australian outdoor advertising market, and 27 per cent market share in New Zealand, which had annual spend of $76m. Spending on outdoor advertising in Australia has almost doubled to $544m annually in the past decade and that is set to go up as the proportion of digital billboards goes up.
Investors were issued shares at $2.55 each in the $329m initial public offer, which brought down Quadrant Private Equity’s stake in the company to 20 per cent from nearly 94 per cent. The listing also raised $109m new capital for the company.
Around 9.3 million APN Outdoor shares or 5.5 per cent of the company’s equity changed hands on the ASX yesterday.
The company’s strong debut will likely be a key factor in determining the fate of its larger rival oOh! Media. CHAMP Private Equity, which owns oOh! Media, has been mulling an IPO and a trade sale among its options as it looks to cash out its stake in the outdoor media company.
Quadrant acquired a 50 per cent stake in the company from APN News & Media in 2012 for nearly $200m. It bought out the remaining share from its joint venture partner the following year for $69m.
APN Outdoor’s debut was the first of many this month, with 15 other companies set to list.
Business Spectator
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