VGI targets strong growth after acquiring Master Ad
VGI Global Media, an out-of-home advertising-media house, is expecting explosive growth as its acquisition of Master Ad will enhance its competitive strengths.
The company enjoyed a 19-per-cent jump in net profit to Bt954 million on a 3-per-cent increase in revenue to Bt2.05 billion for its fiscal year ended in March. The operating results exclude modern trade.
Suparanan Tanviruch, chief financial officer, said yesterday that the company’s net profit margin rose as high as 46 per cent as a result of business restructuring.
The company decided to terminate modern trade, a low-margin business, at the beginning of its financial period.
It also booked a gain on the sale of its stakes in a subsidiary and joint venture.
The growth of office-building and other media increased 28.6 per cent, after the successful move in fiscal 2015 to increase office-building coverage by 135 properties, higher than the target of 123.
This was despite the overall contraction of 1.2 per cent in the advertising-media industry as a result of the economic slowdown and weakening purchasing power.
“In spite of the past year’s gloomy economic outlook due to both internal and external factors, which affected consumer confidence and resulted in overall negative growth in advertising spending, we managed to record decent growths in revenue and net profit.
“That reflected our sheer competitiveness,” she said.
Marut Arthakaivalvatee, chief executive officer, said the company’s strategy was to focus on expanding its out-of-home advertising media network.
Its ambition is to create a nationwide integrated media platform within two years as a way to enhance business potential, especially in the areas of transit/Skytrain, office, airport and outdoor advertising media.
This has led to the company planning to raise its stake in Master Ad from 25.0 per cent to 37.4 per cent and launch a tender offer for all the remaining shares in order to speed up the efforts to penetrate the outdoor advertising market.
VGI also seeks to increase its presence in the online/offline digital advertising media market and set up an activation team to organise marketing activities directed at consumers, such as samplings, demonstrations, spot redemptions and raffles.
This will enhance VGI’s capacity to respond to all market demands and more diverse consumer behaviour.
The consolidation with Master Ad is expected to bring revenue growth of more than 50 per cent thanks to nationwide coverage to cater to the growing demand for advertising on out-of-home media.
VGI can also develop new media channels to serve clients’ demand better, Marut said.
