SKT - Sky Network Television

[Mysterion]

"Yeah, chuck hundred thousand here for me mate!"

[Mysterion]

https://www.afr.com/chanticleer/streaming-puts-foxtel-on-a-roll-20220809-p5b8jk

"In 2018, Foxtel was predominantly an old pay TV company that was left behind by technology," he says.

"It was losing subs, losing revenue, had a massive fixed cost base, and was chewing through a huge amount of capex. If you go forward five years, you see a very transformed story.

"From a subscriber viewpoint, we're now in growth and ahead of plan on revenue growth."

Five years ago, Netflix was viewed by Foxtel as the enemy. Now it is available on the Foxtel platform and is viewed as a partner.

This time last year, Delany was talking about one quarter of positive revenue growth. Now he can boast of a full year of revenue growth in 2022, albeit only up 1 per cent to $US2.08 billion ($2.98 billion).

There are two big moving parts in the Foxtel result – declining subscriptions in the traditional Foxtel residential and commercial business (down 9 per cent to 1.72 million), and surging subscriptions in the streaming businesses – Kayo Sports, BINGE, Foxtel Now and Flash (up 31 per cent to 2.8 million).

Delany's challenge has been to hold on to Foxtel's residential subscribers, who now have average monthly revenue per user of $82. Churn is 350 basis points lower than last year, at 13.5 per cent.

Streaming subscribers now represent 61 per cent of Foxtel's total paid subscriber base of 4.4 million, with the big winner being Kayo Sports. Some of its audience numbers have been impressive, including an NRL match in May between Melbourne Storm and Penrith that attracted 600,000 viewers.

Delany is using the strong cash flow generated by the business to reduce debt and invest in new content. But his challenge is to keep the sporting rights that have been the key to Kayo's success.

His next goal is to push towards 5 million subscribers with a new video streaming aggregation product called Glass, developed by Comcast and Sky in the United Kingdom.

[Mysterion]

Foxtel seems to be ahead of Sky in terms of converting "Box customers" to streaming.

Kayo Sports is the stand out performer. Aussies probably more into their sports than New Zealanders.

Key for Sky NZ is to secure more sports rights and grow Sky Sport Now. Which they have been doing well after securing premier league football etc.

However, revenue from streaming barely keeps up from the loss of "Box customers".

Bit of a losing game in the end which is why I think NewsCorp and Telstra want to offload Foxtel while there is still value and while they also hold the key sports rights.

That's why I think Sky NZ need to find a buyer BEFORE NZRU rights come up and before WBD and Universal rights renew again etc.

[Shareguy]

 Craigs BULLISH on sky. 50 cps cash back...wow

Insert from todays note

Overweight rating remains. Price Target $3.32 (prev. $3.20).
We retain our Overweight rating. Our 12-month target price has increased 4% and remains based on a one-year forward PE of 10x. We assume a FY22 35cps special dividend, along with a 15cps final dividend which provides a potential 50cps/20% return to shareholders within the next few months, and a hypothetical ex-dividend forward PE of 6.0x. We think FCF can support 22.5cps in ongoing dividends from FY23-FY26 at a 9.1% gross yield. This equates to 70% of our FCF forecast for the period vs. 50-80% payout policy. Key downside risks include: satellite churn, ARPU decline, cost of operational change & execution of technology path.

[mistaTea]

Craigs BULLISH on sky. 50 cps cash back...wow

Insert from todays note

Overweight rating remains. Price Target $3.32 (prev. $3.20).
We retain our Overweight rating. Our 12-month target price has increased 4% and remains based on a one-year forward PE of 10x. We assume a FY22 35cps special dividend, along with a 15cps final dividend which provides a potential 50cps/20% return to shareholders within the next few months, and a hypothetical ex-dividend forward PE of 6.0x. We think FCF can support 22.5cps in ongoing dividends from FY23-FY26 at a 9.1% gross yield. This equates to 70% of our FCF forecast for the period vs. 50-80% payout policy. Key downside risks include: satellite churn, ARPU decline, cost of operational change & execution of technology path.

I would absolutely favour a divvy/special divvy combo and forget about the buyback.

They are assuming a total payout of ~$90M though.

Would be amazing if that transpired - and the Board will be under pressure to return cash. They are conservative in anture though, so it would need a number of instos to make it clear what they expect.

Dividend/Special divvy the fastest way to get cash returned at this junction. As at 30 June 2021 they had $161M worth of imputation credits available.

[Mysterion]

Craigs BULLISH on sky. 50 cps cash back...wow

Insert from todays note

Overweight rating remains. Price Target $3.32 (prev. $3.20).
We retain our Overweight rating. Our 12-month target price has increased 4% and remains based on a one-year forward PE of 10x. We assume a FY22 35cps special dividend, along with a 15cps final dividend which provides a potential 50cps/20% return to shareholders within the next few months, and a hypothetical ex-dividend forward PE of 6.0x. We think FCF can support 22.5cps in ongoing dividends from FY23-FY26 at a 9.1% gross yield. This equates to 70% of our FCF forecast for the period vs. 50-80% payout policy. Key downside risks include: satellite churn, ARPU decline, cost of operational change & execution of technology path.

JUST LOL!!!



Who writes this sh*t!

It doesn't even mention securing content as a key risk!

They're probably the ones buying off market and now they're trying to pump the price up before results!!

[mistaTea]

JUST LOL!!!



Who writes this sh*t!

It doesn't even mention securing content as a key risk!

They're probably the ones buying off market and now they're trying to pump the price up before results!!

I wish you bought some mate. Damn.

[Mysterion]

$90m cash return



As I said before on here, the only two reasons to buy this stock is for a capital return or takeover!

I would be running to the exit after any of these two events!!

Without capital Sky can't secure key rights deal and grow the streaming business at the same time!

The only logic for a $90m cash return would be if a takeover happen straight after!! But that wouldn't be funny for previous shareholders!

[Mysterion]

I wish you bought some mate. Damn.

Maybe, but these muppets will fu*k this up somehow! They always do!

[mistaTea]

Maybe, but these muppets will fu*k this up somehow! They always do!

Nah, the way forward is so simple...50cps total divvy.

Even this lot can't screw that up.

[Mysterion]

Nah, the way forward is so simple...50cps total divvy.

Even this lot can't screw that up.

Yeah but are you going to sell afterwards, that's the question!

[mistaTea]

Yeah but are you going to sell afterwards, that's the question!

That is the question.

But I have to hear what management and the board say first. Also see what the SP does.

There are numerous factors.

A 50cps divvy would be nice to chew on though while I cogitate.

[Mysterion]

But I have to hear what management and the board say first.

Bro, is there anything they can say...



Just look at Foxtel results!! It's 100% the same!!

Sky Broadband is dead!

Costs are going higher!

New sky box isn't gonna make a differnce

WBD, Disney, Comcast, DNAZ, NZRU and Silverlake are all closing in!

Game is up bro! Without any cash Sky is dead! Likely be another death placement!

[Mysterion]

After the quarterly results by Comcast or WBD, it's now looking unlikely either of these will do a takeover!

This only leaves PE as the only option for a takeover but they are the ones less likely to offer a good premium.

Once the cash return is done they're won't be anything to look forward to expect bad news!

[LoungeLizard]

That's a pretty optimistic scenario posed by Craigs's - 50 cps return now and 22.5cps thereafter. If that came to pass - and I seriously doubt it will - it would give the SP such a boost that I'm pretty sure there would be a big sell off from new and old shareholders alike. Who amongst us wouldn't sell if the SP did climb to over $3? I certainly would.
As noted, SKYS prospects for future growth or even treading water, is very doubtful given the Boards proven record of incompetence to deal with the storm clouds that are gathering on the horizon. And if the SP did bounce to that sort of level then a takeover becomes less likely. Again, who amongst us would really want to spend any more years riding the SKY rollercoaster?
No, I think if there's a reasonable payout and a resulting boost in the SP then cashing up either before the payout or immediately thereafter is the way to go. Just hope no-one gets trampled in the rush for the exit door.