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Sky posts 26% gain on new subscribers

Wednesday 20th August 2008

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Sky Network Television, New Zealand's biggest pay-TV company, posted a 26% gain in full-year profit as it added programs, boosting subscribers to a record.

Net profit rose to NZ$97.7 million in the 12 months ended June 30, from NZ$77.9 million a year earlier, the company said in a statement. Revenue rose 6.5% to NZ$658.8 million.

Sky has lifted its subscriber base to 752,405 and now reaches 46% of New Zealand's households after launching six new channels and keeping a check on costs. Much of the company's costs are in US dollars, meaning it has benefited from the high kiwi currency. While programming expenses rose 2.5% in the latest year, they fell to 32% of revenue from 33% a year earlier.

The company will pay a final dividend of seven cents a share, bringing its total for the year to 14 cents, up from 10 cents a year earlier. The stock has gained almost 18% in the past month and traded at NZ$5.03 yesterday.

To be sure, the outlook may be dimmed by a slowing New Zealand economy and weaker New Zealand dollar, which traded below 70 US cents this month.

Sky's annual gross churn rose to 14.9% from 13.4% in the previous year, reflecting "the difficult economic conditions that have prevailed in New Zealand during the year," it said.

The company said it continues to score well on its so-called Big Mac Index, which measures how many hamburgers it takes to pay for a pay-TV service in New Zealand versus three other countries. Foxtel in Australia was most expensive in the latest period, while Sky's service was the cheapest.

By Jonathan Underhill

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