Sky Network Television Limited Analysis

Overview

The company was formed in 2005 to facilitate the merger of listed companies Sky Network Television Ltd and Independent Newspapers Ltd (which held 78.4% of Sky). Under the merger scheme, MergeCo was to acquire all of the shares in INL and all of the Sky minority shares. INL and Sky would then be amalgamated into MergeCo to create a single listed entity for the Sky business. MergeCo then would be renamed "Sky Network Television Ltd" and conduct Sky's existing and ongoing business. For each Sky share, holders received one ordinary share in MergeCo and $1.28 cash. For each INL share, holders received 0.8360 of an ordinary share in MergeCo and $1.78 cash.

SKT dervies the majority of its revenue through residential satellite subscriptions with other revenue coming from UHF subscriptions, other types of SKY subscription, installation and advertising.

Performance

The following information was extracted from Sky Network Television Limited's full year results, released on 21 August 2024:

Sky delivers solid results and continues to execute on strategy despite tough market conditions

Sky New Zealand has today reported its results for the Financial Year to June 2024, with all key metrics delivered within the guidance ranges provided, including:

• Revenue of $766.7m, up 1.6% on FY23
• EBITDA of $153m, up 2.9% year on year NPAT of $49.2m, down 3.7% due to increased depreciation
• Customer relationships of 938,760
• Free cash flow of $23.7m, up 43.2% year on year
• Dividend of 19 cents per share (fully imputed), up 26.7%

Sky Chairman Philip Bowman commented: “We are pleased to present financial results that demonstrate solid performance and the resilience of Sky’s strategy despite the significant challenges faced within the New Zealand economy.”

“Notwithstanding the tough economic conditions affecting many consumer-facing businesses, Sophie and her leadership team have delivered a third consecutive year of revenue growth, and results within our Market guidance across all metrics.”

“Focussed actions to maximise revenue opportunities and to control costs to deliver margin growth have strengthened free cash flow, while at the same time we have continued to invest in the business. These actions have enabled the Sky Board to increase shareholder income by delivering a 26.7% increase in the FY24 dividend to 19 cents per share (fully imputed), demonstrating we are on the path to our 3-year target of doubling the FY23 dividend.”

Chief Executive Sophie Moloney said: “Today’s results are particularly gratifying given the tough environment we are operating in. They are the result of a lot of hard work from the talented Sky team, and they reinforce the strength of the Sky strategy to maximise the value of our unrivalled content across multiple products.”

“Our Sky Box business continues to provide enduring strength, as we also pursue higher growth options from newer products and revenue streams.”