Sky CEO Sophie Moloney. Photo / Alex Burton
Sky TV has reported a 59% fall in net profit to $20.2 million for the year to June 30. Adjusted net profit was $41.1m, representing a 16.5% decrease, slightly ahead of the analyst consensus $40m.
The broadcaster delivered some brighter news shortly ahead of its FY2025 financials. It has
Shares were up 7.0% to $3.19 in mid-morning trading. The stock is up 12.7% for the year.
Chief executive Sophie Moloney would not put a price tag on the five-season deal, citing commercial sensitivity, but it does require a shareholder vote on the basis that it represents more than half of Sky’s value – which is set at $410m for the purpose of the vote, implying at least $82m per year. The previous five-year deal, which involved some clawbacks as Covid reduced march schedules, was reported at between $100m and $111m per year.
The final deal was only wrapped up at 7.30am this morning, the Sky boss said.
The size of the deal won’t become more apparent until FY2027, because the old rugby deal, pegged to the calendar year, will run halfway into FY2026.
“On a reported basis, the result is a bit messy given satellite migration costs, compensation and one-offs; but on an adjusted basis the numbers look fine and the company is in a strong cash position,” Nikko AM NZ head of equities Michael Sherrock told the Herald.
“Two standouts are that the rugby deal has been done and that it will be maintaining at least a 30 cents per share (cps) dividend for FY2026.”
Sky said its result was delivered in the context of “a challenging economic environment and a complex satellite migration, along with the completion of a number of important projects including the necessary preparation to successfully acquire Discovery NZ”.
Revenue fell 2.1% to $750.7m.
Ebitda fell 3% to $148m.
The full-year dividend was 22cps (1c ahead of guidance and the analyst consensus), from 19cps in FY2024, as free cash flow increased 5% to $24.8m.
Sky Box and Sky Pod customers fell from 479,000 to 448,000 over the financial year.
Sky Sport Now customers monthly and annual subscription customers increased from 125,000 to 150,000.
Neon customers increased by 1000 to 259,000.
Sky was forced to shift customers to a temporary satellite earlier this year, with partner Optus running two years late with a replacement for the increasingly wobbly D2. Direct costs of the disruption were put at $4.4m in Sky’s full-year results.
Moloney said the overall impact would be “broadly cash neutral” by the end FY2026, thanks to Optus paying around $8 million in compensation to Sky.
Moloney said churn (net customer loss) was 54% lower for those who had upgraded to the new Sky Box.
Churn was lower for those who had bundled Sky Broadband.
Sky Broadband customers increased from 26,000 to 51,000 but revenue growth – $28m to $37m – as average monthly revenue per customer fell from $75.05 to $70.31.
The tough economy was a less transitory problem.
“I don’t see that it’s picking up at the moment. Kiwi household budgets are under massive pressure,” Moloney said.
“We’re not expecting it to get any easier. We’re not expecting it to get any easier, especially for the first half of the financial year [calendar year June to December], in terms of the economy. That’s reflected in our guidance, which is muted.”
The firm has forecast revenue of $745-$770m revenue (excluding Sky Free) for FY2026 and ebitda of $142 -$162m.
Moloney told the Herald that the distraction of the satellite disruption meant Sky had delayed several new initiatives, “Particularly in the advertising space. The dynamic ad insertion that we have on Sky Sport Now, we were, we were planning to deploy that, first on Sky Go, and then into other Sky products. But because of technology contention, we had to delay that.”
She added, “We also were planning to be doing a little bit more on the UHD [ultra high definition or 4K] front but again, that had to be delayed, but we’re excited to be getting back to both of those deliverables in this financial year.”
The company has stuck by its long-standing promise to double its dividend (from its 2023 level) to at least 30cps in FY2026, representing a 36% year-on-year increase.
Sky said it would deliver an update on its new acquisition, Discovery NZ (now known as Sky Free inhouse) with its first-half FY2026 results.
On an analyst conference call, UBS’s Rob Campbell asked if Sky had uncovered any skeletons, now that it had the keys.
Moloney said there had been no surprises.
“It’s all positive and on the upside at this stage,” the Sky CEO said.
The process of integrating the former Discovery NZ would take 12 to 18 months. Former Discovery Australia-New Zealand head of networks Juliet Peterson recently joined Sky’s executive team as chief business officer.
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.