Sky TV first-half profit jumps 19%

Sky TV first-half profit jumps 19%

Feb. 18 (BusinessDesk) - Sky Network Television said a 19% rise in first-half profit to $60.4 million is due to the continuing success of its MY SKY high definition decoder and a rebound in advertising sales.

The company confirmed its previous guidance for the full-year net profit at $121 million compared with the mean of analysts' forecasts at $124 million but said it expected capital spending to be $130 million, up from its previous $119 million guidance.

Advertising revenue jumped 26.9% to $31.1 million in the six months ended December compared with the same six months a year earlier while MY SKY customers jumped 60.3% to 231,072 between December 2009 and December 2010.

MY SKY customers now account for 19.3% of Sky's satellite subscriber base.

“This growth during very challenging times is testament to the quality and value of this product,” said chief executive John Fellet.

Churn is significantly less for customers with the MY SKY decoder at 9.5% compared with 15% for customers with its standard digital decoder, he said.

Sky's 3.1% rise in average revenue per customer to $69.45 a month was primarily due to the increase in MY SKY subscribers who pay $85.16 a month.

Sky gained a net 5,033 customers in the latest six months, down from 5,976 in the previous first half. The current half-year began strongly with a net gain of 5,882 customers in January.

The pay-TV company's MY SKY decoder, which allows subscribers to watch programs when they want to and to record from two other channels at the same time as watching another, was launched in August 2008.

“Our decision to invest in high definition television and personal video recorder capability four years ago is starting to pay off and we are committed to ensuring that we continue to leverage the capabilities of new technologies, including the wider availability of higher broadband speeds in New Zealand,” Fellett said.

Highlights of the latest six months included extended coverage of the 2010/11 Australian National Basketball season and 24 hour coverage of the Commonwealth Games over five channels, he said.

Sky will pay a fully imputed 8 cents a share first-half dividend, up from 7 cents last year.

“It's a good quality result. It confirms the profit gains they're making on their MY SKY product,” said Rob Mercer, an analyst at Forsyth Barr.

Sky shares jumped 9 cents to $5.50 after the result was announced, just below its $5.55 high over the past 12 months.

(BusinessDesk)

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