Daily ShareChat: Sky Network Television

By Jenny Ruth

Wednesday 10th February 2010

First NZ Capital analyst Sarndra Urlich has slightly downgraded her subscriber growth estimates for Sky Network Television in 2010 and 2011, citing the lack of the MYSKY novelty factor, the UHF factor and the lack of new compelling programming.

Urlich says the MYSKY novelty factor and pent up demand had been a theme last year while the decommissioning and conversion of UHF is "definitely a distraction."

The 2011 downgrade is "taking account of the economic reality perhaps not being as robust as previously thought over the next 12 months," she says.

She has downgraded her 2010 subscriber growth forecast from 31,000 to 26,000 and her 2011 forecast from 36,000 to 28,000.

"The real catalyst for Sky, in our view, is the lead-up to the Rugby World Cup." Urlich is forecasting 45,000 subscriber growth in 2012 "and believe this is not overly ambitious, given the expected fervour around this event."

Urlich has downgraded her net profit forecast for the year ending June from $99.1 million to $98 million and cut her valuation from $4.90 a share to $4.77.

Sky's first-half results due on February 19 are likely to feature disappointing subscriber growth offset somewhat by good average-revenue-per-unit growth, she says.

BROKER CALL: First NZ Capital rate Sky Network Television as underperform.

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