Sky TV lifts profit on more subscribers

Sky Television has delivered a a solid improvement in earnings for the year to June 30 with net profit up 7.7 per cent to $137.2 million.

Earnings before interest, tax depreciation and amortisation (EBITDA) increased by 5.1 per cent to $353 million, according to results declared to the NZX today.

Sky TV's subscriber base continued to rise reaching a new high of 855,898 an increase of 1.1 per cent.

The subscriber base comprises 822,545 residential digital subscribers and 33,353 commercial and other subscribers. Sky is now in 49 per cent of homes. The number of Sky residential subscribers using the MySky personal video has passed the half way mark, at 55 per cent compared to 46.7 per cent last year.

Average revenue per subscriber per month increased by 5.4 per cent to $75.83 from $71.93 last year.

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.

Annual gross churn (customer turnover) has increased slightly to 14.4 per cent during the 2013 year from 14.2 per cent last year.

MYSKY churn was 11.4 per cent and churn on standard digital decoders was 17. per cent. Sky TV has declared a fully imputed final dividend of 12 cents per share.

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.

The earnings per share was 35.26 cps, up 11.0 per cent from 31.78 cents per share.

The shares gained 0.7 percent to $5.45, and have gained 10 per cent this year, compared to the NZX 50 Index's 11 per cent gain. The stock is rated a 'buy' based on a Reuters survey.

- with BusinessDesk