Sky TV lifts profit 9% as subscribers spend more, migrate to My Sky
UPDATE: Sky TV shares [NZX:SKT] were up 3.77% to $5.23 in late trading.
Sky Network Television, the pay-TV company that is 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 December 31, from $62.7 million a year earlier, the Auckland-based company says 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 December 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 from $71.81 a year earlier. My Sky ARPU climbed 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 says capital spending willbe 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.
Mr Fellet also used the results presentation to preview a major My Sky decoder upgrade.