25 Feb 2014

Sky shares surge with profit report

7:45 am on 25 February 2014

Shares in Sky Network Television surged nearly 6 percent on Monday after it reported a jump in first-half net profit and upgraded its full-year forecast.

TV satellite dish on roof.

Photo: PHOTO NZ

The pay TV operator's net profit rose by 22.5 percent for the six months to December to $83.5 million, up from $68.2 million for the same six months a year earlier.

Revenue rose nearly 3 percent, underpinned by an increase in the amount earned from its higher value services such as My Sky. At the same time, ad revenues rose while programming costs fell.

The company, which offers more than 100 TV and radio channels as well as the free to air Prime TV, says the number of subscribers has risen by 15 percent and more are paying for My Sky.

It says the churn rate - the number of people who disconnect - fell more than 1 percent to 13.3 percent.

Sky on Monday upgraded its full year profit guidance from a range of $145-155 million to $155-$160 million.

Chief executive John Fellett said the company would benefit from new products, major sports events and a buoyant economy.

"We think the economy is starting to turn more positive. The Sky Go is working better than we expected.

"We have great plans for the Commonwealth Games in Scotland later on this year."

The company also announced on Monday it was launching a new events pay per view company, Sky Arena. The first major event it will broadcast will be a boxing tournament in June.

Subscribers rose by 10,000 but most came from the low-cost pay TV venture with TVNZ, Igloo.

Mr Fellett said a highlight of the six months was the success of the new live streaming app, Sky Go.

Sky declared an increased dividend of 14 cents a share compared with last year's 12 cents a share.