2 Nov 2022

Sky TV plans to return more money to shareholders

4:20 pm on 2 November 2022
Sky TV generic

Sky TV chair Philip Bowman says the healthy share price increase over the past year does not yet reflect the company's improved results and outlook. Photo: Supplied / Richard Parsonson

Sky Television's board faced some irate shareholders at this morning's annual meeting over its plans to return capital.

The pay-TV operator's shareholders voted to approve a $70-million return of capital by way of a 40-cent payment per share, to be paid out by the end of the month.

"This change is a positive demonstration of our ongoing commitment to return surplus cash and one that I trust shareholders will appreciate," chair Philip Bowman said.

Bowman also said a buyback of shares was still on the cards, with a decision to be made when it announced its first half result in February.

However, not every shareholder was impressed with either proposal.

One shareholder told the company she felt "swindled" following last year's consolidation of shares and was not at all interested in another buy back.

"I'm aggrieved. I bought 3250 Sky shares for $6 and something, just under 20,000 in 2014," she said adding she had just 325 shares left after a consolidation in August 2021.

Another shareholder referred to Sky's shares as "penny dreadfuls".

A couple of shareholders spoke in favour of the company's proposals, including one who said shareholders should be "happy", because it could be worse.

"None of us like making an investment in a company and then watching the share price go down," Bowman said, in response.

"While Sky's shares listed on the NZX provided a healthy 18 percent increase in the year to 31 October compared to the NZX50's fall of 13 percent and the ASX300's fall of 2 percent, we are yet to see the share price reflect the improved results and outlook for the company," he said, adding that the board believed Sky's shares were significantly under-priced.

Bowman said the company was also planning to pay bigger dividends to shareholders of between 60 percent and 90 percent of its free cash flow, a shift from the current payout range of between 50 percent and 80 percent.

"As a result of the change, Sky's dividend guidance for FY23 has been increased to between $18m and $24m," Bowman said.

Chief executive Sophie Moloney said the company was on track to deliver a full-year result in line with the guidance provided in August.

Net profit was expected to be between $50m and $60m, with underlying profit of $150m to $170m, revenue of $750m to $770m and capital spending of $60m to $75m.

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