ARN looks to shed outdoor business and simplify
ARN is looking to sell its Hong Kong outdoor advertising operation Cody, as it moves towards a simpler business model.
Chair Hamish McLennan made the announcement during the company’s annual general meeting on Thursday morning.
“Our current operating model carries too much complexity,” McLennan said, which is “limiting our ability to invest in the parts of the business that truly drive growth”.
The sale of Cody is a large part of the three-year “business transformation programme” announced in late February, which is expected to cut $40 million in costs — around 20% of the company’s total cash cost base.
Cody Outdoor
Last week, ARN made a reported 100 redundancies, in order to “become leaner and more efficient,” as McLennan put it.
“Simplifying our business and reallocating resources — shifting from internal admin to innovation is the goal.”
Cody Outdoor was the largest driver of a 9% group revenue increase for the 2024 calendar year, securing two major advertising concession contracts in Hong Kong. It was also responsible for a 3.5% increase in business costs for the group, due to the contract acquisition costs.
Cody is on target to be cash flow positive in 2025, as revenue at KMB bus body and Trams continues to build. McLennan said the company has commenced a strategic review on Cody.
“With the investment and start-up phase now complete, and with a strong and established management team, Cody is well placed for future growth and the Board has commenced a full strategic review to assess optionality,” McLennan said.
ARN had flat revenue in 2024, and forecast “low single-digit growth” in 2025 during its February results call.
In a market update issued Thursday morning, ARN chief Ciaran Davis announced April year-to-date revenue was down 2%, and that “significant progress” had been made with the $40 million cost out program.
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