Sky has reported a jump in total subscriber numbers in the first-half from 779,000 (or the year-ago 750,000) to 795,000, driven by a 74 per cent increase in subs to its various streaming services.

For the second period in a row, streaming subscriber numbers (which jumped from 113,000 first half of 2019 to 196,000) grew faster than satellite numbers fell.

The bad news: streaming subscribers pay less per month than satellite customers, and Sky's interim net profit fell to $11.9m from the year-ago $53.6m and the company reaffirmed that it make lower profit and revenue for the full-year. Its dividend remains suspended.

Forsyth Barr analyst Matt Henry - who has an underperform rating - noted that Sky turned cashflow negative for the period, although it was in the black if one-off costs associated with the Rugby Pass acquisition were discounted.


On a brighter note, Sky could brag that since its half-year closed on December 31, its total number of customers has jumped again, to 925,000 - thanks to its acquisition of Lightbox from Spark in a $6m deal that closed on January 1.

Chief executive Martin Stewart would not disclose how many Lightbox members were individual paying customers, and how got the service free under a "Lightbox on us" offer from Spark, which will continue under a wholesale deal (on disclosed terms) between the two companies.

The Sky boss did offer that he's set a target of 1 million total customers by 2021.

Sky shares jumped 14 per cent to 74c as the market opened, before falling back to yesterday's close of 63c.

While streaming revenue jumped 39 per cent, it was off a low base, and the latest figures also highlighted streamers' lower spend. Streaming customers accounted for 24.7 per cent of total subs for the period, but just 13.5 per cent of total revenue, reflecting streaming's lower average revenue monthly revenue per user (arpu). Neon costs $13.95 per month, Sky Sport Now from $38.99 per month and Rugby Pass US$14.99 per month, while the average satellite customer paid $83 per month in first half.

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First-half revenue fell 5 per cent to $384.5m. Within that, residential satellite customers' contribution fell from $322m to $299m; "other subscriptions" (including Neon, Sky Sport Now and Rugby Pass) chipped in $52m from the year-ago $46m, and advertising revenue fell from $27m to $26m.

And although the decoder business continued its relentless decline, churn (customer turnover) dropped to 13 per cent from the year-ago 15 per cent as satellite revenue dropped only 7 per cent against the year-ago 10 per cent.


On November 18 last year, Sky warned its full-year 2020 revenue would be between $750m and $770m and that its earnings before interest, tax, depreciation and amortisation of $170m between $190m.

Those full-year forecasts were confirmed this morning.

Stewart again refused to say how much Sky paid for Lightbox, but notes with the results presentation put the figure at "$6m cash plus the fair value of prepaid content rights, yet to be determined."

The CEO said two new services would be launched mid-year.

Sky has not detailed the number of paying Rugby Pass subscribers, but close to the time of the acquisition, founder Tim Martin told the Herald it had around 20,000 paying subs.

CFO Blair Woodbury said that between Neon and Sky Sport Now subs and satellite customers who used Sky On Demand and Sky Go, some 50 per cent of subscribers are now regularly streaming.


In a note earlier this month, Jarden (which has a neutral rating and $1.01 target) questioned if Sky is generating enough cash to support the business and said it may struggle to access additional finance as its $200 million bank facility, which is already drawn to $90 million, shrinks to $150 million in July 2021.

Today's accounts showed the board is reviewing the company's funding structure, given the banking facility step-down, plus a $100 million bond maturing in March next year.

Another event-filled half under new-broom CEO Stewart saw Sky keep key rugby and netball rights, but lose domestic cricket to Spark.

The period also saw Sky move to offload its outside broadcast unit; launch new sport channels and the Sky Sport Now app; relaunch Sky Go with "download-to-go" and casting to a big screen capability; and finalise its acquisition of global streaming player Rugby Pass in a deal worth up to US$40m.

On November 18 last year, Sky warned its full-year revenue would be between $750 million and $770m and that its earnings before interest, tax, depreciation and amortisation of $170m between $190m.

Those full-year forecasts were confirmed this morning.


In October, at its full-year result briefing, Sky said it had 161,000 streaming customers across Sky Sport Now and Neon, but did not offer a breakdown.

Sky shares closed Tuesday on 63c (for a market cap of $274m), equalling their all-time low, after falling to 61c in intra-day trading. The stock is down 67.3 per cent over the past year.