Ann: HALFYR: SKT: SKY Announces 2014 Interim Resu

• Release Date: 24/02/14 10:30
• Summary: HALFYR: SKT: SKY Announces 2014 Interim Results
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					SKT
24/02/2014 08:30
HALFYR

REL: 0830 HRS Sky Network Television Limited

HALFYR: SKT: SKY Announces 2014 Interim Results

For the half year ended: 31 December 2013

This report has been prepared in a manner which complies with New Zealand
International Financial Reporting Standards and gives a true and fair view of
the matters to which the report relates and is based on unaudited financial
statements.

CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE

Current Full year NZ$'000; Up/Down %; Previous Corresponding Full year
NZ$'000

Trading revenue: 456,371; Up 2.9%; 443,346

Total Operating Revenue: 456,371; Up 2.9%; 443,346

OPERATING PROFIT BEFORE TAXATION: 114,123; Up 21.9%; 93,657

Less taxation on operating profit: 32,047; Up 21.9%; 26,298

NET PROFIT: 82,076; Up 21.9%; 67,359

Earnings per share: 21.46 cps; 17.53 cps

SKY has reported $82.1 million in after tax earnings, a 21.9% increase on the
previous period. Revenues are up 2.9% to $456.4 million and earnings before
interest, tax and depreciation (EBITDA) increased by 7.4% to $190.4 million.

This improved financial position is primarily due to the continued success of
MY SKY as well as a decrease in programming costs.  Programming costs were
abnormally high in the comparative period as they included the costs of the
Summer Olympics.

MY SKY subscribers now represent 56.7% of SKY's subscriber base compared to
50.1% in the comparative period. At 31 December 2013, SKY had 486,252 MY SKY
subscribers compared to 423,973 in December 2012, an increase of 14.7%.
Subscribers continue to find great value in the MY SKY product which is
demonstrated by continued migration from the standard digital decoder to the
MY SKY decoder.

Gross churn for the period ending 31 December 2013 was 13.3% a reduction of
8.9% from the 14.6% in the previous period reflecting a general lowering of
customer churn and the increased penetration of the lower churning MY SKY
homes. For the rolling 12 months to 31 December 2013, for  MY SKY HDi gross
churn was 10.3% compared to the churn rate for subscribers on the standard
digital decoder during this period of 17.4%.  This compares to gross churn
for MYSKY of 10.9% and a churn rate for subscribers on the standard digital
decoders of 18.1% in the comparative period.

Taking a closer look at SKY's financial results, total revenue increased by
2.9% reflecting an increase in advertising revenues of 6.3% as well as an
increase in ARPU of 2.3% and in total subscribers of 10,127, the majority of
which came from the new low-cost pay television service provided by IGLOO.

SKY's operating costs (excluding depreciation) for the six months to 31
December 2013 showed no overall change from the previous six month period.
However programming costs which comprise both the costs of purchasing
programme rights and also programme operating costs decreased by $13.5
million (8.9%). This can be mainly attributed to the cost of the Summer
Olympics which were included in the prior period results.

Offsetting this program cost reduction was an increase in subscriber
management costs of 7.1% due to higher volumes of trouble calls and MY SKY
repair costs reflecting the expected aging of these decoders. Marketing costs
increased by 24% mainly attributed to the timing of marketing production
costs and also additional marketing spend by Igloo and Prime and rebranding
of SKY. Advertising costs also increased by 9.1% as a result of increased
advertising sales.

SKY increased its capital expenditure during the period to $47.4 million from
$42.8 million in the comparative period, mainly due to an increase in new
projects work such as expansion of the TV station capacity and new products
such as SKY GO which went live in December 2013.

Dividends

The Board of Directors has considered the performance of the business over
the last six months and its prospects for the full year and announced on 24
February 2014 that it will pay an increased  fully imputed dividend of 14
cents per share (prior interim dividend 12 cents) with the record date being
10 March 2014. A supplementary dividend of 2.4706 cents per share will also
be paid to non-resident shareholders
End CA:00247367 For:SKT    Type:HALFYR     Time:2014-02-24 08:30:05