Friday 23rd August 2013
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Sky Network Television has reported a 10.9 percent rise in annual profit as its subscriber base rose to a record in the face of competition from new content providers.
The pay-TV operator reported net profit after tax of $137.2 million in the year to June 30, up from $123.7 million in the previous year, and exceeding the First NZ Capital forecast of $133.2 million.
Earnings before interest, tax, depreciation and amortisation increased by 5.1 percent to $353 million.
Coverage of the summer Olympics in London in August 2012 was the company's biggest programming initiative.
"The Olympics were a huge success from a viewership and customer satisfaction perspective but negatively impacted Sky's financial results for the period due to high production costs and lower than expected advertising revenue," the company said.
Sky is paying a final dividend of 12 cents a share, up from 11 cents last year and taking total dividends to 24 cents a share, up from 22 cents last year. The final dividend is payable on Sept. 13.
Total revenue increased by 5 percent to $885 million as the company added 8,967 subscribers compared to the previous year, giving it a record 855,898 subscribers.
Average revenue per subscriber per month increased by 5.4 percent to $75.83 from $71.93 last year.
The company has 822,545 residential digital subscribers and 33,353 commercial and other subscribers.
Sky is continuing to promote its MYSKY HDi decoder. At June 30, 55.5 percent of residential subscribers were receiving their pay television services via a MYSKY decoder compared to 46.7 percent a year earlier.
MYSKY churn was 11.4 percent and churn on standard digital decoders was 17.9 percent.
Analysts are watching to see if MYSKY makes customers stick and also whether the recent threat from Coliseum Sports forces Sky to invest more in content in the next few years.
Coliseum Sports, an internet-based online platform, stunned New Zealand's sport broadcasting market by securing the English Premier League rights from Sky in June.
Annual gross churn has increased slightly to 14.4 percent during the 2013 year from 14.2 percent last year.
The company reported a 6.1 percent rise in the cost of programming rights. Programming costs make up 33 percent of its total costs.
The shares gained 0.7 percent to $5.45, and have gained 10 percent this year, compared to the NZX 50 Index's 11 percent gain. The stock is rated a 'buy' based on a Reuters survey.
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