Daily ShareChat: Sky Network Television

By Jenny Ruth

Thursday 5th November 2009

The key data provided at Sky Network Television's annual shareholders' meeting was that net subscriber gains are tracking marginally ahead of the same period last year, says Craigs Investment Partners analyst Geoff Zame.

The pay TV operator reported a 7,048 net gain in subscribers for the first 17 weeks of the year ending June 2010.

"This is slightly ahead of the 6,895 in the previous comparable period and an encouraging start to the year," Zame says. "Within the subscriber mix, MY SKY subscribers appear to have increased by around 19,000 in the year to date to around 128,000 and, on a run-rate basis, are tracking broadly in line with our 2010 forecast of 181,000," he says.

Average revenue per unit (ARPU) grew 5.3% to $66.51 in the first quarter.

Zame says his forecast $92 million net profit for 2010 is at the bottom end of analysts' forecasts which range up to $105 million compared with $88.1 million last year.

"Our forecasts are predicated on below-trend subscriber and ARPU growth in 2010, reflecting the softer economic backdrop. However, these assumptions appear conservative (based on the AGM figures) and suggest Sky is cum a modest upgrade on our forecasts." Zame values the stock at $5.25.

BROKER CALL: Craigs Investment Partners rate Sky Network Television as buy.

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