Sky TV's full-year earnings "provided something for everyone," Forsyth Barr analyst Matt Henry says.
"Sky delivered strong cost control and impressive free cash flow in the second-half, further buttressing the recently recapitalised balance sheet.
"For the bears, there remains little tangible evidence that Sky can meaningfully offset its sharply declining satellite revenue."
Henry maintained his neutral price target, with a 16c 12-month price target.
Jarden's Arie Dekker also stayed neutral, though nudging his target up 1c to 17c.
"FY2020 was a bad year for Sky, with ebitda down over 30 per cent and increased costs rather than Covid a key driver of that," he told investors in note, although he did see some positives included the flagged return of the dividend and the "small" increase in profit guidance for next year.
Investors initially didn't take kindly to the result, however. Sky shares fell 10.84 per cent to 14.8c in the session after the result (they had recovered modestly in late Friday trading, which saw the stock up 2.03 per cent to 15.1c; late in the day.
Sky chief executive Martin Stewart disclosed in a filing that he had been buying shares, raising his stake from 1,036,000 to 1,286,000 as he picked up 250,000 shares worth around $37,500).
Fat Prophets research head Greg Smith is a bull, of sorts.
With the stock down 78 per cent for the year "the level of pessimism in the market around Sky is extreme, and probably excessive in my view," he told the Herald.
"I think a share price of at least 35 cents is achievable from here," he said.
"The question is how long for the re-rating."
"Covid hitting during the midst of an already challenging turnaround plan was far from ideal," Smith said.
"I actually though the result was fairly reasonable, coming in around the top end of guidance, better than expected churn during the lockdown, and with streaming customers picking up strongly."
"The capital raise during the year has obviously impacted historic share price targets [pre the 'Black Swan' Covid event, Smith saw Sky going above $2] but has put the company on a much more solid financial footing," he said.
While Spark chief executive Jolie Hodson brushed off Sky's planned entry into the broadband market, in partnership with Chorus, Smith called it: "A good move as Sky looks to disrupt others having been subject to intense disruption itself for some time."
He saw potential for broadband-content bundles for Sky's customer base approaching 1 million.
A normalisation of the global sporting calendar - which is already happening faster than expected, execution on broadband, and ongoing growth in streaming would support his 35c punt, Smith said.
That said, Smith also cautioned that the pandemic had introduced a level of background uncertainty.
"The stock is probably for speculative investors only at this stage."
Forecast revised upwards
Sky TV reported a net loss of $156.8m for the year to June 30, including a non-cash impairment of goodwill of $177.5m on Thursday - but raised its guidance for FY2021, saying the faster-than-expected return of sport will see a return to net profit, and at a higher level than it previously forecast.
Net profit excluding the write-down was $20.7m.
Revenue decreased 6 per cent to $747.6m, at the upper end of revised guidance issued in May, as a 35 per cent increase in streaming revenue was not enough to offset a 6 per cent decline in the company's larger pool of satellite revenue.
The pay-TV broadcaster forecast it would be back in black for its 2021 financial year, with a net profit of $10m to $20m and $125m-$140m ebitda on revenue in the range of $660m to $700m. The numbers were all ahead of Sky's initial 2021 guidance, issued in May, which had assumed a gradual return of sport from January.
The dividend remained suspended, though the company said it would be reassessed next year.
Total subscriber numbers for 2020 increased 27 per cent to 990,000, in part due to Sky's purchases of the Lightbox and RugbyPass streaming services, but average revenue per user dropped.
The number of streaming customers increased 153 per cent from 160,000 to 404,000 - albeit with 52 per cent of its entertainment streaming subs accounted for by a wholesale agreement with Lightbox's former owner, Spark, which runs through to January next year.
Sky broke out an average revenue per month figure for its streaming customers for the first time - $19.80 versus the $82.08 spent by the average satellite customer.
That was reflected in streaming's modest contribution to Sky's accounts. Streaming contributed 8 per cent of total revenue, up from 5 per cent in 2019.
Sky had $111m cash and had not drawn on its new $150m bank facility. Bonds could be repaid out of cash, CFO Blair Woodbury said.