Sky TV lifts 1H profit 9 percent as subscribers spend more, migrate to My Sky

Friday 22nd February 2013

Sky Network Television, the pay-TV company that's 44 percent owned by News Corp, reported a 9 percent gain in first-half profit as subscribers migrated to its My Sky premium service and spent more.

Profit rose to $68.2 million in the six months ended Dec. 31, from $62.7 million a year earlier, the Auckland-based company said in a statement. Sales rose 3.9 percent to$443 million.

Total subscribers to Sky TV's services was little changed at 846,988 at Dec. 31 from a year earlier though the number on My Sky climbed 28 percent to 423,973. Average revenue per subscriber, or ARPU, rose to $75.78 at Dec. 31 from $71.81 a year earlier. My Sky ARPU rose to $87.39 from $84.71.

Sky TV lifted its full-year profit guidance to a range of $125 million to $130 million, from a previous $120m million to $125 million, and said capital spending would be lower at $90 million to $100 million, from $150 million to $160 million.

It will pay an interim dividend of 12 cents, with a record date of March 8, from 11 cents a year earlier. The shares climbed 2.6 percent to $5.17, having edged up 6.4 percent over the past 12 months. The stock is rated 'outperform' based on a Reuters poll of nine analysts, with a median price target of $5.47.

Gross churn rose to 14.6 percent in the first half from 14.2 percent, though for My Sky HDi, churn was 10.4 percent.

Programme operating costs rose 11 percent, mainly reflecting the costs of hosting the London Olympics. Sales and marketing fell by $7.1 million, reflecting an increased spend the year earlier for the Rugby World Cup.

Capital expenditure fell to$42.8 million in the first half from $69.6 million, reflecting lower decoder and installation costs. Advertising revenue fell 9.5 percent to $35.3 million.

Total operating expenses rose 3.3 percent to $333.8 million, led by programming rights and operations.

BusinessDesk.co.nz

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