Sky TV profit soars 41% to $62.2m

SKY TV has reinstated its profit payout to shareholders after reporting what looks at first blush like a strong fullyear result.

The broadcaster will pay a fullyear dividend of 7.3c a share (equivalent to 60% of free cash flow or $70 million), to be paid to investors on September 23.

Sky said its net profit for the 12 months to June 30 jumped 41% to $62.2 million as revenue increased 4% to $736.1 million.

Total subscriber numbers also increased 4%, to 990,761 — representing Sky’s second straight gain after years of customer losses.

Again, growth in its Sky Sport

Now and Neon streaming apps outpaced a decline in Sky box revenue.

Sky box customers fell from 554,690 a year ago to 529,521, while streaming customers jumped 11% to 461,240.

After a Sky Sport price rise (and a Neon price rise announced after the fullyear close), blamed on ‘‘rights inflation’’, record average revenue per user month was reported for both Sky box and streaming customers.

Sky flagged at its firsthalf result that its dividend would be reinstated.

Sky forecast net profit of $50 million$60 million and revenue between $750 million and $770 million for FY2023.

Capex is forecast to lift from $60 million to $75 million, which chief executive Sophie Moloney said was tied to the release of Sky’s new box, which will be its first hardware upgrade in a decade. An upgrade is expected in the next few weeks.

There was no update on the delayed new Sky box, other than that its initial rollout would happen ‘‘soon’’.

Sky originally promised its new box, which will feature 4K ultrahigh definition, allow regular Sky channels to be delivered over UFB fibre rather than via a dish and support thirdparty apps, such as Netflix, midyear.

Ms Moloney said a lot of customer testing was taking place, and ‘‘noone will be forced to upgrade’’.

There was no update on Sky’s effort to seize back the Rugby World Cup from Spark other than that talks with World Rugby were ‘‘progressing well’’. The talks also involve Sky’s global RugbyPass app.

Sky did provide the first customer number for its new Sky Broadband service, to be launched next year (and provisioned behind the scenes by Orcon, which recently merged with 2degrees).

The firm said in an NZX filing, Sky Broadband customers were ‘‘close to 18,000’’ after the first full year in market, ‘‘achieving the targeted attachment rate to Sky box of 3.3%’’.

While initial Sky broadband numbers are modest, Jarden research head Arie Dekker said earlier this year that nontraditional players, including Sky, Contact and Mercury, could account for as many as 400,000 broadband customers over coming years as they use bundled internet plans for upsells, or to make their core services ‘‘stickier’’.

Sky’s shares closed up 3c at $2.62 on the NZX yesterday. The stock is up more than 60% for the year. —