Kingfish exits Sky TV investment, citing costs, new rivals
In its interim report, Kingfish say they had already reduced their holdings in Sky TV to below 2% before the broadcaster's annual shareholder meeting in October.
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Kingfish [NZX: KFL], the NZX-listed investment company managed by Fisher Funds Management, sold its stake in Sky Network Television [NZX: SKT] because of concerns about the increased cost of delivering new services and the arrival of on-demand rivals such as Netflix and Lightbox.
In its interim report, senior portfolio manager Murray Brown and managing director Carmel Fisher say they had already reduced their holdings in Sky TV to below 2% before the broadcaster's annual shareholder meeting in October. At the meeting the company gave an earnings downgrade, citing the rising cost of new services such as Neon and Fanpass, higher programming costs and customers cancelling subscriptions when the Rugby World Cup ended.
Kingfish, which focuses on investing in New Zealand companies, subsequently exited its investment in Sky. Brown and Fisher said they "would prefer to watch from the sidelines while the subscriber on-demand model plays out and see if Sky TV can return to earnings growth again."
The investor also sold down holdings in Opus International Consulting [NZX: OIC], which made up 1.1% of its portfolio at the end of March 2015. Kingfish said it has been a "frustrating" investment, because it believes the market for infrastructure consulting remains strong. The company is underperforming in this context, hence the sale, it said.
Kingfish reported a net loss of $2.9 million for the six months ended September 30, from a profit of $4.2 million a year earlier. Management fees were cut by $180,000, or to 1.05% of gross asset value, from 1.25%, because the portfolio underperformed the 90-day bank bill index. It did better than the S&P/NZX 50 Index in the period, with a 1.7% decline in the value of its portfolio against the NZX 50's 4.1% drop.
Kingfish stock rose 0.8% to $1.25 and has fallen 10% this year, against a broader market rise of almost 4%.
(BusinessDesk)
Edwin Mitson
Wed, 16 Dec 2015
Wed, 16 Dec 2015
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Kingfish exits Sky TV investment, citing costs, new rivals
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