Full Year 2018 Results

Ocean Outdoor Limited

Operational expansion and increased profit underpin transformational year

Full Year 2018 Results

London, United Kingdom, 19 March 2019 - Ocean Outdoor Limited ("Ocean Outdoor", "Ocean", "the Group" or "the Company"), a leading operator of premium Digital Out-of-Home ("DOOH") advertising in the United Kingdom, is pleased to announce its Full Year results for the 12 months ended 31 December 2018.

Financial Highlights1:

· Billings increased 13.7% year on year to £87.8m (FY17: £77.2m)

· Revenue rose 15.2% to £62.2m (FY17: £54.0m)

· Digital billings made up 92.8% of total billings (FY17: 89.1%)

· Gross profit growth of 13.8% to £25.2m (FY17: £22.1m), with a gross profit margin of 40.4% (FY17: 40.9%)

· Adjusted EBITDA2 up 4.7% to £20.0m, with an adjusted EBITDA margin of 32.2%

· Adjusted Net Income3 of £12.8m, with an adjusted EPS4 of 23p

· Cash on balance sheet of £160.5m, leaving the Group well positioned to continue its organic growth and M&A strategies

Operational Highlights:

· Acquisition of SCP Acquisition Topco Limited for an enterprise value of approximately £200m

· Acquisition of Forrest Media (Holdings) Limited ("Forrest") for an enterprise value of approximately £32m expanded the Group's UK DOOH footprint, adding 77 locations and 91 faces across Scotland, with excellent coverage of Glasgow and Edinburgh

· Launch of three new large format screens at Westfield London, two of which are full motion alongside installation of state-of-the-art screens at two existing marquee assets, Holland Park Roundabout and the Wall at Westfield

· Launch of the first 'Two Towers' structure in Manchester on the key arterial route, the Mancunian Way, as well as a full motion screen outside the key transport hub of Manchester Piccadilly train station

· Two live broadcasts were completed during the first six months - live streaming of the Royal Wedding, as well as the 2018 Grand National, in public outdoor locations

· Pipeline development is strong with over 175 locations in various stages of development

Post-Period:

· Acquisition of Interbest and Ngage Media two major outdoor operators in the Netherlands, for a total combined consideration of approximately €51m (£45m)5, leaving the group with a proforma post acquisition cash balance of £116m.

· Secured exclusive, long term contract with Southampton City Council

· Launch of new M8 Tower, which connects Glasgow and Edinburgh on track to become operative during Q2 2019

· Development of 125 small format digital roadside locations throughout the West Midlands on track for Q2 2019

· The Board has authorised a $25m share buyback programme to begin as soon as practicable, with further details to be released

1 The headline financial information is on an unaudited proforma basis of Ocean Outdoor Limited and its subsidiaries, with comparisons between FY18 and FY17. The audited financial information is included in the attached financial accounts. The appendices to the accounts show detailed proforma financial information for the entities acquired.

2 Adjusted EBITDA is before PLC costs, non-recurring items, deal related fees and foreign exchange gains/losses.

3 Adjusted Net Income is before PLC costs, non-recurring items, deal related fees, foreign exchange gains or losses, amortisation arising on consolidation, interest expenses relating to previous capital structure and associated tax effects.

4 Adjusted EPS is defined as Adjusted Net Income divided by the number of shares including founder preferred shares.

5 Exchange rate of EUR to GBP 0.88

 Commenting on the results, Ocean CEO Tim Bleakley said: "This was a significant year for Ocean and these results reflect the actions taken throughout the year to grow, both organically and acquisitively, driving the continued strong performance of our business.

"The successes achieved this year in developing and expanding our network, as well as our entry into the European market, are a testament to the strength of our team and the growing potential for DOOH.

"Looking ahead, management remain committed to the job in hand and delivering on our strategy, working alongside our talented teams who are already building on this momentum in 2019."

Analyst Briefing and Investor Call:

Ocean Outdoor's 2018 Audited Financial Accounts and its Results Presentation is available at https://investors.oceanoutdoor.com.

An analyst briefing will be held today at 10.30am at the Company's offices, 25 Kingly Street, London, W1B 5QB.

Investors are invited to participate in Ocean's Investor Call, which will begin at 12pm GMT/8am ET today. Conference details for the investor call are as follows:

Standard International Access

+44 (0) 20 3003 2666

UK Toll Free

0808 109 0700

USA Toll Free

+1 866 966 5335

Password: OCEAN OUTDOOR

For further information please contact:

[email protected]

Business Review

Introduction

The Group has had a transformational 2018, which has included acquisitions and working towards our listing on the London Stock Exchange, which completed at the start of 2019. Given the complexities of these corporate events, the resulting full year performance is therefore all the more impressive, with Ocean delivering revenue and profit slightly ahead of expectations. This is testament to the strength and depth of our team, which has remained focused throughout on the Group's targets and achieving them despite the UK's political and economic macro distractions.

For the full year 2018, Ocean generated revenue on an adjusted basis of £59.5m. On a proforma basis, where all operating companies are assumed to have been held from 1 January 2017, full year revenue reached £62.2m, up 15.2% on the previous year. Group EBITDA increased by 4.6% to £20.0m on a proforma basis, and £19.3m on an adjusted basis.

Everything Ocean does is underpinned by innovation to enhance the experience for the audiences we reach and the advertisers trying to reach them, as we progress with our vision of 'digital cities for digital citizens'. The Forrest acquisition has increased our ability to amplify our customer campaigns on a greater scale, utilising the best technological innovation Digital Out of Home has to offer. Our core strategic tenets of driving organic growth, technical innovation and accretive inorganic consolidation remain firmly on track. The momentum built in 2018 has already rolled into 2019, with Ocean winning a major contract with Southampton City Council and most recently acquiring Dutch Out-of-Home operators Interbest and Ngage, giving the Group a major foothold in the Netherlands.

Portfolio

With 92.8% of revenues from digital locations (up from 89.1% in 2017), it has been a year of successful launches. Our portfolio continues to grow, from 175 locations to 254, with the integration of Forrest into the Group adding significant reach to Ocean's national footprint, adding 77 locations and 91 faces across Scotland, with excellent coverage of Glasgow and Edinburgh.

Throughout the year, the Group launched 10 new digital locations across the UK including, the completion of the Westfield London expansion and the Westfield Plaza screen, one of the largest full motion video enabled screens in London.

We have continued to invest significantly in our national and regional commercial teams with offices in Birmingham, Manchester and Glasgow. This has allowed us to focus on strengthening our premium asset coverage in the cities with great economic drivers and general investment profile. 2018 saw the launch of Two Towers locations in Manchester and Leeds, as well as the Group gearing up for the launch of the new M8 Tower, which connects Glasgow and Edinburgh and becomes operative later in Q2 2019, as well as the development of 125 small format digital roadside locations throughout the West Midlands during Q2 2019.

As we focus on unlocking the value of our platforms and their relationship with audiences, we have expanded our content based initiatives and our live broadcast capabilities leading to a number of major project achievements including, the Westfield Plaza screen hosting the first ever DOOH live broadcast of the Royal Wedding and the arresting 100th anniversary of The Armistice, commissioned by Westminster City Council and Victoria Beckham's two London Fashion Week shows broadcast live on Piccadilly Lights. All of these projects evidence the deeper levels of engagement that the digital medium can deliver for brands.

We remain positive about the underlying growth opportunity of the DOOH medium. Its strong broadcast audience reach and cut through branding impact, combined with innovative technologies creates deeper levels of engagement with the consumer. Furthermore, our new Opinium study shows that DOOH is delivering brand impact to desirable, mobile audiences at scale in a trusted advertising environment, setting DOOH apart from other advertising channels.

Financial performance

The Company delivered a strong financial performance, with the core business performing ahead expectations at both revenue and EBITDA levels. It was pleasing to see Ocean Scotland (formerly Forrest) start to make a recovery and show strong top line revenue growth in the second half of the year since acquisition.

Billings during the year increased 13.7% to £87.8m (FY17: £77.2m) on the back of new installations and digital conversions. Digital Billings now account for 92.8% of total billings, up 4.2% on FY17 (FY17: 89.1%).

For Full Year 2018, Group revenue rose 15.2% to £62.2m (FY17: £54.0m) with adjusted EBITDA up 4.7% to £20.0m, with an adjusted EBITDA margin of 32.2%.

Gross profit grew by 13.8% to £25.2m (FY17: £22.1m), with gross profit margins steady at 40.4% (FY17: 40.9%). Adjusted Net Income3 for 2018 was £12.8m with an adjusted EPS4 of 23p.

As at 31 December 2018, the Company had a strong cash position of £160.5m. The Board continuously assesses its capital allocation strategy and is focused on organic development investment, accretive acquisitions and potential returns of capital. To that end, the Board has authorised a $25m share buyback programme to begin as soon as practicable, with further details to be released.

Acquisitions

In line with the Company's growth strategy, 2018 was a busy period of acquisitions. This has also continued into the early part of 2019.

In March 2018, Ocelot Partners completed the acquisition of Ocean Outdoor for an enterprise value of £200m and was subsequently renamed Ocean Outdoor Limited. The acquisition of Forrest, for an enterprise value of £32m, quickly followed in June, providing a strong portfolio of locations throughout Edinburgh, Glasgow and Aberdeen, which immediately made Ocean the largest provider of DOOH solutions in Scotland. Forrest has also brought with it a series of digital assets in Manchester and Newcastle. Over the course of the second half of the year, the team successfully integrated Forrest into the Group and is now benefiting from procurement costs and revenue synergy. 

People

In October Thomas Ebeling joined the Board of the Company as an independent non-executive director. Thomas spent nine years as CEO of ProSiebenSat.1 Media SE, one of Germany's largest broadcast media companies, and as such has a wealth of experience which Ocean is able to draw from.

In November, the Board was further strengthened with the appointment of Andrew Miller as an independent non-executive director. Currently a partner of Terra Firma Capital Partners, Andrew was chief executive officer of Guardian Media Group between 2010 and 2015 and has also served as a non-executive director of The AA plc.

We would like to thank all our employees for their dedication throughout the year. It is the first year of releasing our results as a listed business with the added complexities of acquisitions. We would like to thank all those involved in assisting the management team.

Strategy

Our strategy remains focused on the three pillars of organic development, technical innovation and accretive acquisitions. Our medium and our proposition are in good health notwithstanding the uncertain political climate that continues to exist in the United Kingdom.

We have a development pipeline that is busier than ever before with our creative teams working with us daily to bring to life campaigns using our technology. While we will be working to integrate our Dutch acquisitions, our strong cash position allows us to continue to press ahead assessing opportunities for further acquisitions in geographies displaying similar digital changes as the UK, in line with our growth strategy.

Post-Period

Since the year end, Ocean completed the acquisitions of Interbest and Ngage Media, two major outdoor operators in the Netherlands, for a total combined consideration of approximately €51 million. The combined acquisitions, which are 60% digital revenues today, will see Ocean expand into a highly attractive market with similarly strong underlying industry dynamics to the UK, creating an immediate scale platform, with a robust digital growth profile ahead.

Interbest is the Netherland's biggest independent roadside operator with 88 digital and static OOH masts in prime locations on the busiest road and motorway networks. Its portfolio covers all the Dutch municipalities including the Randstad megalopolis of Amsterdam, Rotterdam, Utrecht and The Hague. Ngage Media is a 100 percent pure play digital operator with 76 large full motion digital screens in 50 locations across the Randstad megalopolis which includes Amsterdam, Rotterdam, Utrecht and The Hague.

For the Full Year 2018, the two businesses, combined, delivered net revenue of €25.7m, up 8.2% on FY176 and adjusted EBITDA7 of €7.4m, which was growth of 15.4%. As such the acquisitions are expected to be highly accretive and we are extremely excited about working with our new Dutch colleagues to unlock further value in this new combined proposition.

The acquisitions provide the Group with 2018 proforma revenues of £85.0m, a growth of 82.9% from the 2017 Ocean standalone revenue of £46.5m. Proforma Adjusted EBITDA7 is £26.5m at the end of 2018. This is an increase of 64.7% from the 2017 Ocean standalone Adjusted EBITDA. The proforma Adjusted EPS8 is 30p, up 7p on the pre-acquisition Adjusted EPS. The Group's proforma cash balance post acquisition is £116m.

At the start of 2019, Ocean secured an exclusive long-term contract with Southampton City Council to provide enhanced digital roadside and city centre large format advertising screens. Ocean will be upgrading and developing all of the Southampton Council's existing and new roadside billboards within the city centre. Whilst giving advertisers access to a fast growing, affluent city region, Ocean will be helping Southampton Council to create commercial value as well as improve engagement with its citizens.

6 Growth rates exclude one off revenues and EBITDA in 2017

7 Adjusted EBITDA incorporates revised management fees

8 Adjusted EPS is defined as Adjusted Net Income, including net income of the acquired Dutch entities, divided by the number of shares including founder preferred shares.

Outlook for 2019

We are very pleased with the overall performance of the Group throughout 2018 and the momentum we have going into 2019. Revenue growth in 2019 will be driven by the organic growth of core Ocean, the full effect of the Forrest transformation and our development pipeline. This will be supported by our continued technological innovation with enhancements due to be added to locations throughout the year and we also see additional attractive uses to deploy capital through potential acquisitions. We reiterate our 2018 guidance for 2019 and expect revenue growth for 20199 to be in the high single digits10.

9 Pro forma as if Netherlands was acquired on January 1st, 2018

10 This is not a profit forecast and there can be no assurance that this level of revenue growth will be achieved

Tim Bleakley

Chief Executive Officer

19 March 2019

Report of the directors

The directors present their report together with the audited financial statements for the year ended 31 December 2018.

Status and activities

On 1 March 2018, the company announced the acquisition of advertising site manager SCP Acquisition Topco Limited and its subsidiaries from private equity firm Searchlight Capital for an enterprise value of £200 million. The acquisition was fully settled in cash. As noted in the Company's prospectus, in connection with financing the acquisition, the Company issued additional Ordinary Shares which resulted in the company's then existing shareholders still owning a majority interest in the Company following the acquisition. The transaction closed on 28 March 2018.

Following completion of the transaction Tom Goddard and Tim Bleakley have joined the Company as non-executive Chairman and CEO respectively and the company changed its name to Ocean Outdoor Limited from Ocelot Partners Limited.

With this anchor investment in Ocean, the Company seeks to build a scale out-of-home media consolidation vehicle. In addition to supporting Ocean's organic growth initiatives, the Company will pursue strategic and complementary acquisitions intended to enhance Ocean's scale, customer offering and deepen its market leadership.

In light of this, the company immediately engaged in the acquisition of Forrest Media (Holdings) Limited and its subsidiaries ("Forrest" renamed "Ocean Scotland") which successfully completed on 2 June 2018, with an enterprise value of £32m. Forrest is a leading outdoor operator in Scotland and the acquisition has added significant reach to Ocean's national footprint, adding 77 locations and 91 faces across Scotland and the North of England, with excellent coverage of Glasgow and Edinburgh.

The Group continues to deliver new growth opportunities and search for future acquisition opportunities which is in line with the strategy presented in the Group prospectus. As announced on 12 March 2019, the Group completed the further acquisitions of Interbest and Ngage Media.

Pro forma Profit and Loss

Ocean Outdoor Limited was an investment vehicle in FY17. Due to the acquisition of SCP Acquisition Topco Limited on 28 March 2018 and Forrest Media (Holdings) Limited on 2 June 2018, the audited consolidated statement of profit and loss presented does not provide a period on period comparison for the underlying performance and operations. For the benefit of users of the accounts, the unaudited pro forma statements of total comprehensive income can be found in the appendix, which shows the period on period results on different bases.

Included in the appendix is the profit and loss for SCP Acquisition Topco Limited and its subsidiaries for FY17 and FY18 and Forrest Outdoor Media Limited profit and loss for FY17 and FY18. The appendix shows these periods on a combined basis assuming any subsidiaries acquired during any given period had been acquired on 1 January of the earliest period presented. Also included in the appendix is a hybrid profit and loss showing 12 months profit and loss of Ocean Outdoor Limited, SCP Acquisition Topco Limited and all their subsidiaries (excluding Forrest Outdoor Media Limited) for the 12-month period ended 31 December 2018 combined with the acquisition made in the year, Forrest Outdoor Media Limited with its profit and loss for the 7-month period ended 31 December 2018.

For each profit and loss statement, there is the reconciliation between reported operating profit and Adjusted EBITDA is also presented. The unaudited pro forma financial information has been provided for illustrative purposes only and by its nature addresses a hypothetical situation and does not purport to represent the Company's actual financial position or results.

Analysis using financial key performance indicators

Directors and managers assess performance using performance indicators at a Group level. The Group's key performance indicators (KPI) are Billings, Revenue and Adjusted Earnings Before Interest, Tax, Depreciation and Amortisation excluding one off items (Adjusted EBITDA), the number of locations as well as digital billings as a percentage of total billings. This is generated from the companies within the Group.

Please see the table below for KPI's on the reported numbers

The above table does not allow a period on period comparison and therefore the following table shows the performance of the Group on a proforma basis

Results and dividends

The consolidated statement of profit and loss statement shows the profit for the year.

Dividends are recognised when they become legally payable. In the case of interim dividends to equity shareholders, this is when declared by the directors. In the case of final dividends, this is when approved by the shareholders at the AGM. The Company's current intention is to retain any earnings for use in its business operations, and the Company does not anticipate declaring any dividends in the foreseeable future.

Directors and their interests

The Directors of the Company who served during the period and subsequent to the date of this Report are:

Non-Executive Directors or the Company can terminate the appointment by giving three months' notice.

As at 31 December 2018 the Directors have the following interests in the Company's securities:

Tim Bleakley also has 1,998,000 hurdle shares, issued by a subsidiary of the Company which will, except in limited circumstances, be settled in ordinary shares of Ocean Outdoor Limited. Tom Goddard also has 1,282,050 hurdle shares, issued by a subsidiary of the Company which will, except in limited circumstances, be settled in ordinary shares of Ocean Outdoor Limited.

Directors' remuneration

Robert Marcus, Martin HP Soderstrom, Sangeeta Desai, Ayreh B Bourkoff and Andrew Barron entered into a Director's letter of appointment with the Company dated 8 March 2017. Thomas Ebeling and Andrew Miller entered into a Director's letter of appointment with the Company dated 19 October 2018 and 27 November 2018 respectively.

Under the letters of appointment, Martin HP Söderström, Sangeeta Desai, Thomas Ebeling and Andrew Miller are entitled to a fee of $75,000 per annum and Robert Marcus is entitled to receive a fee of $90,000 per annum. Robert Marcus, Martin HP Söderström, Sangeeta Desai and Andrew Miller are also entitled to receive an additional fee of $10,000 per annum as Committee members. Tom Goddard, in his role as Chairman, was paid £55,800 in the period 28 March 2018 to the year end. Tim Bleakley, CEO, was paid £237,500 following his appointment as a Director on 28 March 2018.

Andrew Barron and Aryeh B Bourkoff did not receive a fee in connection with their appointment as Non-Executive Directors of the Company.

In addition, all of the Directors are entitled to be reimbursed by the Company for travel, hotel and other expenses incurred by them in the course of their directors' duties relating to the Company.

Share capital

The full details of share capital information is set out in note 16.

Substantial shareholdings

As at 31 December 2018, the following had disclosed an interest in the issued Ordinary Share capital of the Company (being 5% or more of the voting rights in the Company) in accordance with the requirements of the Disclosure and Transparency Rules (the "DTRs"):

As at 31 December 2018 and 25 February 2018, the interest of any person listed in the table above in Ordinary Shares may have increased or decreased without any obligation on the relevant person to make further notification to the Company pursuant to the DTRs.

Change of control

The Company is not party to any significant contracts that are subject to change of control provisions in the event of a takeover bid. There are no agreements between the Company and its Directors or employees providing compensation for loss of office or employment that occurs because of a takeover bid.

Independent Auditors

The previous auditors, PricewaterhouseCoopers LLP, resigned during the year and BDO LLP were appointed by the Board in their place. The Board have reason to believe that BDO LLP conducted an effective audit and have provided the auditors with full access to all of the books and records of the Company.

Corporate Governance Statement

The Company is a British Virgin Islands registered company with a standard listing on the London Stock Exchange. For as long as the Company has a standard listing it is not required to comply or explain non-compliance with the UK Corporate Governance Code (the "Code") issued by the Financial Reporting Council ("FRC") in September 2012. However, the Company is firmly committed to high standards of corporate governance and maintaining a sound framework through which the strategy and objectives of the Company are set and the means of attaining these objectives and monitoring performance are determined.

Relations with Shareholders

The Directors are always available for communication with Shareholders and all Shareholders will have the opportunity, and are encouraged, to attend and vote at the Annual General Meetings of the Company during which the Board will be available to discuss issues affecting the Company.

Statement of going concern

The Directors confirm that, after making an assessment, they have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and be able to pay its debts as they fall due. The political and economic uncertainty surrounding Britain's impending exit from the EU (Brexit) is a factor that has been considered. With advertising spend closely correlated to GDP and consumer confidence the outlook may be adversely impacted by a 'no deal' Brexit. It is the view of the Directors that, despite the uncertainty, the Group has sufficient capital to withstand a negative impact. Accordingly, the Directors continue to adopt the going concern basis in preparing the financial statements.

Internal control

The Board is responsible for determining the nature and extent of the significant risks it is willing to take in achieving its strategic objectives. The Board maintains sound risk management and internal control systems. The Board has reviewed the Company's risk management and control systems and believes that the controls are satisfactory given the nature and size of the Company and its subsidiaries.

Financial Risk Profile

The Company's and Group's financial instruments comprise mainly of cash and cash equivalents, and various items such as payables and receivables that arise directly from the Group's operations. Details of the risks relevant to the Group are included in the notes to the financial statements.

Management Report

For the purposes of compliance with DTR 4.1.5R(2), DTR 4.1.8R and DTR4.1.11R, the required content of the "Management Report" can be found in this Report of Directors.

Principal Risk and Uncertainties

The main risks and uncertainties identified by the Group are as follows:

The Group operates in a highly competitive market

The Group operates in a highly competitive industry and may not be able to maintain or increase its current advertising and sales revenues or market share. The Group competes for advertising revenue with other outdoor advertising operators, as well as with other media, such as radio, newspapers, magazines, television, direct mail, mobile devices and internet-based services. Competitive pressures could cause the Group to lose market share, require it to lower prices, increase marketing expenditures and increase the use of discounting or promotional campaigns, and restrict its ability to increase prices. These or other developments could materially and adversely affect the Group's sales volumes and margins and result in a decrease in its operating results, which could have a material adverse effect on the Group's business, financial condition and results of operations.

The Group is heavily reliant on its relationships with media agencies

The Group is heavily reliant on its relationships with four main media specialist buyers to sell the out-of-home advertising space which it owns and/or manages. Accordingly, the loss of these relationships, a significant change in the terms of these relationships, or any of these agencies encountering financial difficulties could have a materially adverse effect on the Group's business, financial condition and results of operations.

A loss of sites or a failure to renew relevant site agreements may reduce the Group's revenue

The Group gains access to advertising sites through short, medium and long-term contracts or concessions (being comprised of (i) leases, (ii) licences; and (iii) certain commercial site agreements) with asset owners such as local municipalities and commercial landlords. There is no guarantee that such site agreements, including those relating to the Group's iconic sites, will be renewed at all or renewed on terms which are favourable to the Group. If sufficient numbers of site agreements are cancelled, not renewed or sufficient numbers of sites become impaired, it could have an adverse effect on the Group's business, financial condition and results of operations.

The Group's sites and other technology systems and operations could be exposed to damage or interruption

The Group's sites and other technology systems and operations could be exposed to damage or interruption from system failures, computer viruses, cyber-attacks, power or telecommunication providers' failure, fire, natural disasters, terrorist acts, war, or human error. Any interruptions would impact the Group's ability to operate and could result in business interruption, the loss of customers and revenue, damaged reputation and weakening of competitive position and could have a material adverse effect on the Group's business, financial condition and results of operations. There is a risk that, if a cyber-attack is successful, any data security breaches or the Group's inadvertent failure to protect confidential information could result in a loss of information integrity. Breaches of the Group's obligations under applicable laws or client agreements and system outages may potentially have a material adverse impact on the Group's reputation and financial performance.

Changes in technology may impact consumer and advertiser behaviour

The advertising industry will continue to be affected by changes in technology, with these changes likely leading to increasing media options for consumers. If these changes drive advertising away from DOOH advertising, this could have a material adverse effect on the Group's business, financial condition and results of operations.

The Group's operations are currently based primarily in the UK and are therefore vulnerable to any adverse developments to the UK economic and market conditions and to the UK legal and regulatory environment

The Group's operations are based primarily in the UK and the business of the Group is therefore exposed to the prevailing economic and market conditions, as well as the legal and regulatory environment, in the UK. Periods of a slowing economy or recession, or periods of economic uncertainty, may be accompanied by a decrease in advertising which would reduce the Group's advertising revenues and have an adverse effect on the Group's revenue, profit margins, cash flow and liquidity. In addition, there has been an increase in political uncertainty as a result of the UK vote in favour of exiting the EU. It is not clear what the impact on the Group (including its business, employees, operations and assets) will be when, the UK leaves the EU, but any such change may have a material adverse effect on the business, financial condition and results of operations of the Group.

Directors' Responsibilities

The directors are responsible for preparing the Directors' report and the financial statements for the Group. The Directors have prepared the financial statements for each financial year which give a true and fair view of the state of affairs of the Group and of the profit or loss of the Group for that year.

The Directors have chosen to use the international financial reporting standards ("IFRS") as adopted by the European union in preparing the Group's financial statements.

international Accounting Standard 1 requires financial statements present fairly for each financial year the Company's financial position, financial performance and cash flows. This requires the faithful representation of the effects of transactions, other events and conditions in accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the International Accounting Standards Board's 'Framework for the preparation and presentation of financial statements. In virtually all circumstances, a fair presentation will be achieved by compliance with all applicable IFRS. A fair presentation also requires the Directors to:

· consistently select and apply appropriate accounting policies;

· present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

· provide additional disclosures when compliance with the specific requirements in IFRS is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and

· state that the group has complied with IFRS, subject to any material departures disclosed and explained in the financial statements.

The Directors are also required to prepare financial statements in accordance with the rules of the London Stock Exchange for companies trading securities on the Stock Exchange. The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Group, for safeguarding the assets, for taking reasonable steps for the prevention and detection of fraud and other irregularities and for the preparation of financial statements.

Financial information is published on the company's website, www.oceanoutdoor.com. The maintenance and integrity of this website is the responsibility of the Directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may occur to the financial statements after they are initially presented on the website, www.oceanoutdoor.com. Legislation in the BVI governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Directors' Responsibilities Pursuant to UK Data and Transparency Regulations

The directors confirm to the best of their knowledge:

· The group financial statements have been prepared in accordance with IFRS adopted by the European union and article 4 of the IAS regulation and give a true and fair view of the assets, liabilities, financial position and profit and loss of the Group.

· The annual report includes a fair review of the development and performance of the business and the financial position of the group and the parent company, together with a description of the principal risks and uncertain-ties that they face.

Disclosure of information to Auditors

Each of the persons who is a Director at the date of approval of this Report confirms that:

· so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware; and

· each director has taken all the steps that he/she ought to have taken as a director in order to make himself/herself aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Directors' indemnities

As at the date of this Report, indemnities granted by the Company to the Directors are in force to the extent permitted under BVI law. The Company also maintains Directors' and Officers' liability insurance, the level of which is reviewed annually.

Subsequent events

On 10 January 2019, the Company's ordinary shares were re-admitted to the Standard Listing segment of the Official List of the UK Listing Authority, and trading in its shares recommenced on the London Stock Exchange's Main Market (LSE: OOUT).

In accordance with the London Stock Exchange Admission and Disclosure Standards, the Company announced, pursuant to its articles of association, a tranche of 87,500 founder preferred shares were automatically re-designated as ordinary shares on a one for one basis. This re-designation became effective on 15 January 2019 and admission of the ordinary shares occurred on 22 January 2019.

On 12 March 2019, the Group announced the acquisition of Interbest and Ngage Media, two leading digital out-of-home companies operating across the Netherlands, for a combined cash consideration of approximately £45m using a rate of 0.88:1 EUR:GBP, and a performance-linked earn-out if growth performance targets are met over time. The transactions value Interbest and Ngage, combined, at a 31 December 2018 LTM multiple of 6.9x adjusted EBITDA, before any benefit for synergies. The business combination accounting had not been finalised by the authorisation date of these financial statements.

By order of the Board

Tom Goddard

Chairman

18 March 2018 

Corporate Governance Statement

Ocean is committed to maintaining the highest standards of business conduct and ethics, as well as full compliance with all applicable laws, rules and regulations, corporate reporting and disclosure, and all other matters deemed to protect the best interests of the company's shareholders.

At the date of this report, the Company complies with the corporate governance regime applicable to the Company pursuant to the laws of the British Virgin Islands.

In addition, the Company strives for compliance with the U.K. Corporate Governance Code to the greatest extent possible to facilitate effective and prudent management that can contribute to the long-term success of the Company. The Company is not currently compliant with the U.K. Corporate Governance Code and is aware of the following non-compliance issue:

- The U.K. Corporate Governance Code recommends that the chairman should be independent on appointment. As Tom Goddard was previously an employee of Ocean, holding the position as chairman of Ocean, the Company does not comply with this recommendation of the Governance Code. The Board unanimously believes this is in the best interests of the Company and its Shareholders, with Tom Goddard ensuring stability and continuity with clients and strategic and commercial partners. Tom Goddard brings continuity at a time of change and the Company will retain his experience and expertise, which make him particularly well-qualified to act as the Company's Non-Executive Chairman.

Strategic decisions

The Directors are responsible for carrying out the Company's objectives, implementing its business strategy and conducting its overall supervision. Acquisition, divestment and other strategic decisions are considered and determined by the Board. The Board provides leadership within a framework of prudent and effective controls. The Board has established the corporate governance values of the Company and has overall responsibility for setting the Company's strategic aims, defining the business plan and strategy and managing the financial and operational resources of the Company

Through the publication of regular announcements, corporate presentations posted to the company website, and face to face meetings, the board has sought to communicate its strategy, objectives and performance to all shareholders on a timely basis. When shareholders raise concerns with the board over the Group's strategy, objectives or performance, the Board endeavours to actively engage with the shareholders in dialogue.

Board process

The full Board meets formally at regular intervals throughout the year and at such other times as may be necessary to address any significant matters that may arise. The Board communicates regularly between these meetings. On a regular basis the Board is provided with appropriate and timely information relating to all aspects of the Group. In addition, the Directors are free to seek any further information or request specific presentation on matters that they consider necessary in order to discharge their duties effectively. The collective responsibility of the Board ensures that all Directors are involved in the process of arriving at significant decisions.

Nomination Committee

The Nomination Committee is responsible for considering and making recommendations to the Board in respect of appointments to the Board. In carrying out its duties, the Nomination Committee is primarily responsible for identifying and nominating candidates to fill Board vacancies; evaluating the structure and composition of the Board with regard to the balance of skills, knowledge and experience and making recommendations accordingly; giving full consideration to succession planning; and reviewing the leadership of the Group.

Audit and Risk Committee

The Audit and Risk Committee assists the Board in discharging its responsibilities with regard to financial reporting, external and internal controls, including reviewing and monitoring the integrity of the Group's annual and interim financial statements, reviewing and monitoring the extent of the non-audit work undertaken by the Group's external auditors, advising on the appointment of such external auditors, overseeing the Group's relationship with its external auditors, reviewing the effectiveness of the external audit process, and reviewing the effectiveness of the Group's internal control and review function.

The Audit and Risk Committee gives due consideration to laws and regulations, the provisions of the UK Corporate Governance Code and the requirements of the Listing Rules. The Audit and Risk Committee also has responsibility for, among other things, oversight of the Group's risk appetite, risk monitoring and capital management, reviewing the manner in which the members of the Group implement and monitor the adequacy of the Group's risk management framework and ensuring that the Group maintains appropriate levels of capital, as well as advising the Board on its overall risk appetite. The Audit and Risk Committee also reviews the adequacy of security measures, anti-money laundering systems, anti-bribery controls and procedures in place for detecting fraud.

Remuneration Committee

The Remuneration Committee has responsibility for determination of specific remuneration and benefits packages for each of the executive directors and certain senior management of the Group, including pension rights and any compensation payments, and recommending and monitoring the level and structure of remuneration for senior management and the implementation of share options, share incentive plans or other performance related schemes.

Independence of the Board

Tom Goddard, Tim Bleakley, Aryeh B. Bourkoff and Andrew Barron are not considered to be Independent Directors.

The Board considers the Independent Non-Executive Directors to be independent in character and judgment and free from relationships or circumstances which are likely to affect or could appear to affect, their judgment. In addition, when determining the independence of the Independent Non-Executive Directors, the Board had regard to their Letters of Appointment and Initial Option Deeds and, in the case of Mr Marcus, his prior role as Chairman of the Company and his holding of 119,000 Ordinary Shares. The Board believes that the aforementioned factors are not sufficient to have an impact on their independence.

Ethical standards

All Directors, managers and employees are expected to act with the utmost integrity and objectivity, striving at all times to enhance the reputation and performance of the Group.

External auditors

The Board and the Audit Committee review the performance of the external auditors on an annual basis and normally meet with them during the year to:

- Discuss the external audit plans, identifying any significant changes in structure, operations, internal controls or accounting policies likely to impact on the financial statements and to review the fees proposed for the audit work to be performed.

- Review the periodic reports prior to lodgement and release, and any significant adjustments required as a result of the auditor's findings, and to recommend board approval of these documents, prior to announcement of results.

- Review the results and findings of the auditor, the adequacy of accounting and financial controls, and to monitor the implementation of any recommendations made.

- Review the draft financial report and recommend board approval of the financial report.

- As required, to organise, review and report on any special reviews or investigations deemed necessary by the board.

The Board and Audit Committee specifically assess the independence of the Group's external auditors and in doing so consider the level and nature of non-audit services provided and associated fees, the auditor's rotation arrangements for key audit personnel and areas of potential conflicts of

interest.

Communication with shareholders and continuous disclosure

The directors attach importance to the provision of clear and timely information to shareholders and the broader investment community. Information about the company is available on its website (www.oceanoutdoor.com)

Financial reporting - the Company reports to shareholders half-yearly and annually, as required by the LSE rules. The Chairman states to the Board that the company's financial reports present a true and fair view in all material respects of the company's financial condition and operational results and are in accordance with relevant accounting standards.

Equal access policy - the Company has a policy, based on existing policies and practices as a company quoted on the LSE market, that all shareholders and investors have equal access to

the company's information, and has procedures to ensure that all price sensitive information will be disclosed to the LSE in accordance with the continuous disclosure requirements of the LSE rules. these procedures include:

- A comprehensive process to identify matters that may have a material effect on the price of the company's shares, notifying them to the LSE, posting them on the company's website, and issuing media releases.

- All information provided to the LSE, and related information (including information provided to analysts and the media), being immediately posted to the company's website www.oceanoutdoor.com/investors/

- The Annual Report is made available to all shareholders. The Board ensures that the annual report includes relevant information about the operations of the Group during the year, changes in the state of affairs of the Group and details of future developments, as well as all required disclosures.

News releases are issued throughout the year and the company maintains a website (www.oceanoutdoor.com/investors/) on which press releases, corporate presentations and the annual report and financial statements are available to view together with the half-yearly financial statements. Enquiries from individual shareholders on matters relating to the business of the company are welcomed. Shareholders and other interested parties can subscribe to receive notification of news updates and other documents from the company via email. In addition, the Executive Directors meet with major shareholders to discuss the progress of the company and provide periodic feedback to the board following meetings with shareholders.

Independent auditor's report to the members of Ocean Outdoor Ltd

Opinion

We have audited the financial statements of Ocean Outdoor Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2018 which comprise the consolidated statement of profit and loss and other comprehensive income, the consolidated statement of financial position, the consolidated statement of changes in equity, the consolidated statement of cash flows, and notes to the financial statements, including a summary of significant accounting policies.

The financial reporting framework that has been applied in the preparation of the group financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

In our opinion:

• the financial statements give a true and fair view of the state of the group's affairs as at 31 December 2018 and of the group's profit for the year then ended; and

• the group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Use of our report

This report is made solely to the company's members, as a body, in accordance with International Standards on Auditing (UK) (ISAs UK). Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

• the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

• the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Our application of materiality

We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that are taken on the basis of the financial statements. In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.

Level of materiality applied and rationale

We consider revenue to be the critical performance measure for the Group. Using this benchmark, we set materiality at £500,000 which represents 1% of revenues.

Performance materiality

The application of materiality at the individual account or balance level is set at an amount to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.

On the basis of our risk assessment together with the Group's overall control environment, our judgement was that overall performance materiality for the Group should be 70%. As such, performance financial statement materiality was set at £350,000.

Component materiality

We set materiality for each component of the Group based on a percentage of materiality dependent on the size and our assessment of the risk of material misstatement of that component. Component materiality ranged from £120,000 to £350,000.

Reporting Threshold

We agreed with the Audit Committee that we would report to them all audit differences individually in excess of £15,000. We also agreed to report audit differences below those thresholds that, in our view, warranted reporting on qualitative grounds.

An overview of the scope of our audit

Our Group audit was scoped by obtaining an understanding of the Group and its environment, including Group-wide controls, and assessing the risks of material misstatement at the Group level. The group has 4 significant components which represented the main trading entities in the group, being Ocean Outdoor UK Limited, Signature Outdoor Limited, Mediaco Outdoor Limited, and Forrest Outdoor Media Limited.

Ocean Outdoor Limited (the Company) and the significant components were subject to full scope audits which were performed by BDO LLP. As a result of this approach, all of the Group's Revenue (100%), Total Assets (100%) and Adjusted profit before tax (100%) were subject to audit.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report and consolidated financial statements, other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the

aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Nicole Martin (Senior Statutory Auditor)

For and on behalf of BDO LLP, Statutory Auditor

London, UK

18 March

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

Ocean Outdoor Limited

Consolidated statement of profit or loss and other comprehensive income

Ocean Outdoor Limited

Consolidated statement of financial position

As at 31 December 2018

The financial statements were approved by the Board of Directors and authorised for issue on 18 March 2019.

T Bleakley

Director

Ocean Outdoor Limited

Consolidated statement of changes in equity

For the year ended 31 December 2018

Ocean Outdoor Limited

Consolidated statement of cash flows

for the year ended 31 December 2018

Ocean Outdoor Limited

Notes forming part of the Consolidated Financial Statements

. 1. General information

The Company was incorporated with limited liability under the laws of the British Virgin Islands under the BVI Companies Act on 20 January 2017. The address of the Company's registered office is Kingston Chambers, PO Box 173, Road Town, Tortola, British Virgin Islands. The Ordinary Shares and Warrants were admitted for trading on the Main Market of the London Stock Exchange on 13 March 2017, after raising gross proceeds of US$425,250,000 for a potential acquisition (an Acquisition).

2. Principal accounting policies

The principal accounting policies applied in these financial statements are set out below.

2.1 Basis of preparation

These financial statements are prepared under the historical cost convention and are in accordance with International Financial Reporting Standards as and its interpretations as issued by the European Union ("EU") and those parts of the BVI Business Companies Act applicable under IFRS.

The financial statements are presented in GBP, which is also the functional currency of each entity within the Group. The Company changed its presentational and functional currency from USD to GBP on 28 March 2018. The Company's financial statements for the year ended 31 December 2017 were presented in USD. For comparative purposes, the reported figures have been translated at an exchange rate of 1.41, the spot rate on the date of acquisition, and the point at which the presentational and functional currency changed to GBP.

Amounts are rounded to the nearest thousand, unless otherwise stated.

The financial statements are prepared on the historical cost basis with the exception of certain financial instruments which are stated at fair value.

Accounting policies have been consistently applied throughout the periods presented.

This is the first set of the Group's financial statements where IFRS 15 and IFRS 9 have been applied. As required by IAS 8, the nature and effect of these changes and significant changes in accounting policies have been disclosed in note 2.11. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

Non-GAAP performance measures

Billings represent the advertising spend by the advertiser, including fees directly payable by the advertiser to their advertising agency, exclusive of sales tax.

Billings is the standard metric used by the out of home advertising industry body "Outsmart" to measure the market size and industry trends. Management consider Billings to be an important metric to assess the performance of the underlying business against industry trends and therefore presents Billings as a Non-GAAP performance measure. Billings is presented for the benefit for users of the accounts but is not a substitute for other standard GAAP measures presented.

 2.2 Going concern

The Directors have, at the time of approving the financial statements, a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future given the cash funds available and the current forecast cash flows. Thus, the Company continues to adopt the going concern basis of accounting in preparing the financial statements. 

2.3 Foreign currency translation

Functional and presentation currency

The Company is listed on the main market of the London Stock Exchange. The performance of the Company is measured and reported to the shareholders in GBP, which is the Company's functional currency. The Directors consider GBP as the currency of the primary economic environment in which the Company operates and the one that most faithfully represents the economic effects of the underlying transactions, events and conditions.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign currency assets and liabilities are translated into the functional currency using the exchange rate prevailing at the balance sheet date.

2.4 Financial assets

The Group classifies its financial assets into one of the categories discussed below, depending on the business model and cash flow type under which the assets are held. The Group has not classified any of its financial assets as fair value through other comprehensive income. The Group's accounting policy for each category is as follows:

Amortised cost

These assets are non-derivative financial assets held under the 'hold to collect' business model and attracting cash flows that are solely payments of principal and interest. They comprise trade and other receivables and cash and cash equivalents. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment.

Impairment provisions for trade and other receivables are calculated using an expected credit loss model. Under this model, impairment provisions are recognised to reflect expected credit losses based on a combination of historic and forward-looking information, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable. For trade receivables, which are reported net; such provisions are recorded in a separate allowance account with the loss being recognised within administrative expenses in the consolidated statement of comprehensive income. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short term highly liquid investments with maturities of three months or less.

2.5 Financial liabilities

The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was acquired. The Group's accounting policy for each category is as follows:

Other financial liabilities

Other financial liabilities include the following items:

- Trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method

2.6 Share-based payments

The Founder Preferred Shares (and attached warrants) and director options represent equity-settled share-based arrangements under which the Company receives services as a consideration for the additional rights attached to these equity shares, over and above their nominal price. The fair value of the grant of Founder Preferred Shares (and attached warrants) in excess of any purchase price received is recognised as an expense. In addition, the Company has granted options to the non-executive directors. The management team have been incentivised via the issue of hurdle shares which aligns the long-term interest of the company to deliver shareholder wealth. The fair value of the Founder Preferred Shares (and attached warrants), the options and the hurdle shares is determined using a valuation model.

2.7 Fair Value of Warrants

Warrants not subject to IFRS2 are valued at redemption value of $0.01 as financial instruments. The Warrants are compound financial instruments with a liability recognised and the remainder in equity.

The total amount to be expensed as a respective share-based payment charge is determined by reference to the fair value of the awards granted:

· including any market performance condition;

· excluding the impact of any service and non-market performance vesting conditions; and

· including the impact of any non-vesting conditions. Non-market performance and service conditions are included in assumptions about the number of awards that are expected to vest.

The total expense is recognised in the income statements with a corresponding credit to equity over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. The Company does not begin to recognise expense associated with share-based awards with performance conditions until it is probable that the performance condition will be achieved.

2.8 Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors as it is the body that makes strategic decisions. The Board are of the opinion that there was only a single operational segment for FY17 being the investment in US Treasury Bills. As a result, no segment information has been provided for FY17 as the Company only accumulates its funds raised for investment in US Treasury Bills.

For FY18, the Board has elected to aggregate the segmental results of Ocean Outdoor Limited Group (excluding Forrest Media Outdoor) and Forrest Media Outdoor on the basis both businesses provide similar DOOH services in the UK market. Accordingly, the group has been treated as one operational segment for FY18 and the results of the group presented in the financial statements should not be disaggregated further.

2.9 Share capital

Founder Preferred Shares, Ordinary Shares, and Warrants are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares are shown in equity as a deduction, net of tax, from the proceeds.

2.10 Critical accounting judgements and key sources of estimation uncertainty

The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Estimates and assumptions

- Impairment of goodwill and other intangible assets - Estimation of future cash flows and determination of discount rates (see note 11).

- Depreciation of property, plant and equipment - Estimation of useful lives and residual values (see note 2.20).

- The Group used certain estimates and assumptions in determining the fair value of the intangible assets in respect of brand and acquired rights over advertising sites for the acquisitions made in the year. The estimates and assumptions include underlying cash flow projections, discount rates applied and long term growth rates.

2.11 New accounting standards and interpretations

This is the first set of consolidated financial statements prepared by the Company following the acquisition of SCP Acquisition Topco Limited. The Company applied all applicable standards and applicable interpretations published by the EU for the year ended 31 December 2018

a) New standards, interpretations and amendments effective from 1 January 2018 that the Group adopted in the year

The Group has adopted IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers during the year. The adoption of these new standards has had no impact the opening equity and total comprehensive income previously presented in FY17 in the prior year's financial statements. The Group has not applied any transitional reliefs in its first time adoption of IFRS 9 or IFRS 15.

b) New standards, interpretations and amendments not yet effective

There are a number of standards and interpretations which have been issued by the International Accounting Standards Board that are effective in future accounting periods that the Group is not adopting early. The most significant of these is IFRS 16 Leases, which is mandatorily effective for periods beginning on or after 1 January 2019.

Adoption of IFRS 16 will result in the Group recognising right-of-use assets and lease liabilities for all contracts that are, or contain, a lease. For leases currently classified as operating leases, under current accounting requirements the Group does not recognise related assets or liabilities, and instead spreads the lease payments on a straight-line basis, disclosing in its annual financial statements the total commitment in note 19.

The Group will be required to apply IFRS 16, as endorsed by the EU, from 1 January 2019 and is in the process of gathering data to estimate the impact on the reported income and net assets. Upon transition to IFRS 16, the Group will be adopting the modified retrospective approach and therefore will recognise leases on balance sheet as at 1 January 2019, measuring the right-of-use assets at the carrying value of the right of use asset depreciated on a straight-line basis over the life of the lease from the lease inception date. This will result in an estimated right of use asset of £84m with a lease liability of approximately £96m on existing leases. Instead of recognising an operating expense for its operating lease payments, the Group will recognise interest on its lease liabilities and amortisation on its right-of-use assets. This will increase reported EBITDA, based on its current lease profile, by an estimated £16m. This amount will depend on the extent to which the Group decides to take advantage of the exemptions available under IFRS 16 for low value assets and short-term leases. The first set of interims prepared under IFRS 16 will be the results presented for the 6-month period ended 30 June 2019.

2.12 Revenue

Substantially all of the Group's contracts with customers contain a single performance obligation, being the rental of advertising space, and are subject to fixed prices, so removing the judgement that would otherwise be required in determining the transaction price and allocating it across multiple performance obligations. Revenue is recognised on an over time basis. This is because the customer simultaneously receives and consumes the economic benefits provided under the contract by the Group's performance.

Amounts invoiced in advance of the performance of the advertising rental services are recognised as performance obligations and released to revenue as the group performs the advertising services under the contract.

Revenue represents the amounts (excluding the value added tax) derived from the provision of services to customers during the 52-week period ended 30 December 2018 (2017: 52-week period ended 31 December 2017) net of commissions and discounts. Revenue is recognised on a 52-week period to reflect the period of customer bookings, normally in 2-week blocks. The difference on this basis to recognition of turnover for a full year is immaterial.

2.13 Basis of consolidation

 Where Ocean Outdoor Limited ("the Company") has control over an investee, it is classified as a subsidiary. The Company controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.

The Consolidated Financial Statements presents the results of the Company and its subsidiaries ("the Group") as if they formed a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.

The Consolidated Financial Statements incorporates the results of business combinations using the acquisition method. In the statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated statement of comprehensive income from the date on which control is obtained. They are derecognised from the date on which control ceases.

2.14 Goodwill

Goodwill represents the excess of the cost of a business combination over the total acquisition date fair value of the identifiable assets, liabilities and contingent liabilities acquired.

Cost comprises the fair value of assets given, liabilities assumed and equity instruments issued, plus the amount of any non-controlling interests in the acquiree plus, if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree. Direct costs of acquisition are recognised immediately as an expense.

Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the consolidated statement of comprehensive income. Where the fair value of identifiable assets, liabilities and contingent liabilities exceed the fair value of consideration paid, the excess is credited in full to the consolidated statement of comprehensive income on the acquisition date.

2.15 Other intangible assets

Intangible assets are recognised on business combinations if they are separable from the acquired entity or give rise to other contractual/legal rights. The amounts ascribed to such intangibles are arrived at by using appropriate valuation techniques.

The Group has recognised acquired rights over advertising sites on business combinations as intangible assets. These are amortised over the contractual life of the advertising sites on a straight-line basis, which are typically 10 to 15 years.

The Group has recognised intangible asset in relation to the Ocean brand acquired as part of the business combination. This is amortised over 10 years on a straight-line basis.

2.16 Impairment of non-financial assets (excluding deferred tax assets)

Impairment tests on goodwill and other intangible assets with indefinite useful economic lives are undertaken annually at the financial year end. Other non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an individual asset or cash generating units ('CGU') exceeds its recoverable amount (i.e. the higher of value in use and fair value less costs to sell), the asset is written down accordingly.

Impairment charges are included in profit or loss, except to the extent they reverse gains previously recognised in other comprehensive income. An impairment loss recognised for goodwill is not reversed

2.17 Defined contribution schemes

Contributions to defined contribution pension schemes are charged to the consolidated statement of comprehensive income in the year to which they relate.

2.18 Leased assets

 Where substantially all of the risks and rewards incidental to ownership are not transferred to the Group (an "operating lease"), the total rentals payable under the lease are charged to the consolidated statement of comprehensive income on a straight-line basis over the lease term. The aggregate benefit of lease incentives is recognised as a reduction of the rental expense over the lease term on a straight-line basis.

2.19 Deferred taxation

Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the consolidated statement of financial position differs from its tax base, except for differences arising on:

- The initial recognition of goodwill

- The initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting or taxable profit, and

- Investments in subsidiaries where the Group is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in the foreseeable future.

Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised.

The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the reporting date and are expected to apply when the deferred tax liabilities/(assets) are settled/(recovered).

2.20 Property, plant and equipment

Items of property, plant and equipment are initially recognised at cost. As well as the purchase price, cost includes directly attributable costs.

Depreciation is provided on all items of property, plant and equipment so as to write off their carrying value over their expected useful economic lives. It is provided at the following rates:

Site assets

Assets under the course of construction are only depreciated once complete.

Equipment

3. Financial instruments - Risk Management

The Group is exposed through its operations to the following financial risks:

- Credit risk; and

- Liquidity risk.

The Group's operations do not expose it to material foreign currency risk.

In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This note describes the Group's objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout these financial statements.

There have been no substantive changes in the Group's exposure to financial instrument risks, its objectives, policies and processes for managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note.

(i) Principal financial instruments

The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows:

- Trade and other receivables

- Cash and cash equivalents

- Trade and other payables

(ii) Financial instruments by category

Financial assets

Financial liabilities

(iii) Financial instruments not measured at fair value

Financial instruments not measured at fair value include certain cash and cash equivalents, trade and other receivables and trade and other payables.

Due to their short-term nature, the carrying value of cash and cash equivalents, trade and other receivables, trade and other payables approximates their fair value.

General objectives, policies and processes

The Board has overall responsibility for the determination of the Group's risk management objectives and policies. The Board receives monthly reports from the Group Financial Controller through which it reviews the effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets.

The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group's competitiveness and flexibility. Further details regarding these policies are set out below:

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Group is mainly exposed to credit risk from credit sales. It is Group policy, implemented locally, to assess the credit risk of new customers before entering contracts. The Group's review includes external ratings, when available, and in some cases bank references. Purchase limits are established for each customer.

Credit risk also arises from cash and cash equivalents and deposits with banks and financial institutions. For banks and financial institutions, only independently rated parties with minimum rating "A" are accepted. In respect of the year and period ends presented, £18.2m (2017: £nil) was held on current account with HSBC Bank plc and £142.3m (2017: £294.6m) was held in treasury bills with Barclays Bank plc.

Liquidity risk

Liquidity risk arises from the Group's management of working capital and the finance charges and principal repayments on its debt instruments. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due.

The Group's policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due. To achieve this aim, it seeks to maintain cash balances (or agreed facilities) to meet expected requirements for a period of at least 90 days.

The Board receives rolling 12-month cash flow projections on a monthly basis as well as information regarding cash balances. At the end of the financial year, these projections indicated that the Group expected to have sufficient liquid resources to meet its obligations under all reasonably expected circumstances.

Capital Disclosures

The Group's objectives when maintaining capital are:

- to safeguard the entity's ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders, and

- to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.

The Group sets the amount of capital it requires in proportion to risk. The Group manages its capital structure and makes adjustments to it in the light of changes in economic conditions. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

4. Revenue

All revenue is recognised on an over time basis from services provided in the UK and to UK based customers.

Analysis of revenue by service type:

5. Expenses by nature

6. Employee benefit expenses

During the prior year 700,000 founder preferred shares were issued to founder shareholders. The shares may be converted into ordinary shares based on a conversion rate of 1 ordinary share for 1 founder preferred share at a future time at an exercise price of USD 10.50 per share. The issue of the shares was treated for accounting purposes as an equity settled share-based payment. The fair value of the shares of £24,187k was recognised as an expense in full at the grant dates as the shares had no vesting conditions.

Key management personnel compensation

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, including the directors.

7. Finance expense and finance income

8. Tax

The group's trading subsidiaries all operated in the UK in FY18. The group pays UK corporation tax on profits from its UK businesses. In FY17, the Company had no subsidiaries. As a BVI registered company, the rate of income tax which applied to the Company for FY17 was 0%. Accordingly, the Company did not incur a charge or credit for corporation tax. The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to the loss for the year are as follows:

Expenses not deductible for tax purposes

The key contributor to the expenses not deductible for tax purposes is interest disallowable per the corporate interest restrictions rules.

Changes in tax rates and factors affecting the future tax charge

A reduction in the UK corporation tax rate from 20% to 19% (effective from 1 April 2017) were substantively enacted on 26 October 2015, and an additional reduction to 17% (effective 1 April 2020) was substantively enacted on 6 September 2016. This will reduce the company's future current tax charge accordingly. Deferred tax assets and liabilities at 31 December 2018 have been calculated taking into consideration the applicable rates when the temporary differences are expected to reverse.

9. Property, plant and equipment

10. Intangible assets