SKT - Sky Network Television

[mistaTea]

https://www.nzherald.co.nz/sport/fifa-womens-world-cup-2023-lack-of-sales-prompts-20000-free-ticket-giveaway-in-new-zealand/VRBHN2SOEVBZ7KDLE5WCYGLL3Y/

Didn't Sophie tout this as a magnificent event and she is glad sky paid lots of money for it because Sky love to get in behind our 'wahine' etc.

And...nobody wants to go...

[mistaTea]

https://corporate.tvnz.co.nz/assets/Uploads/FY24-TVNZ-Statement-of-Performance-Expectations-FINAL-v2.pdf

Looks pretty grim.

[Waltzing]

suppose old news but some local reviews on the new box werent that great..

[Left Field]

https://www.nzx.com/announcements/416861

CONSOLIDATED OPERATING STATEMENT
Current Full Year Period NZ$: Up/Down %: Previous Corresponding Period NZ$

REPORTED REVENUE (excl GST) FROM CONTINUING OPERATIONS
$926.2m: up 44.9%: $639.0m
TOTAL REPORTED REVENUE (excl GST)
$926.2m: up 44.9%: $639.0m
REPORTED NET (LOSS)/PROFIT FROM CONTINUING OPERATIONS
$8.0m: up 123.7%: -$33.6m
TOTAL REPORTED NET PROFIT
$8.0m: up 123.7%: -$33.6m
EARNINGS PER SHARE (REPORTED)
1.1cps: up from -4.4cps

NORMALISED REVENUE (incl GST)
$966.7m: up 53.1%: $631.5m
NORMALISED NET PROFIT
$138.8m: up 1331.6%: $9.7m
EARNINGS PER SHARE (NORMALISED)
18.3cps: up from 1.3cps

FINAL DISTRIBUTION
Final dividend of 6.0cps, fully imputed
Record date: 8 September 2023, Payment date: 22 September 2023
Dividend Reinvestment Plan will not apply

[Cod]

https://www.nzx.com/announcements/416861

CONSOLIDATED OPERATING STATEMENT
Current Full Year Period NZ$: Up/Down %: Previous Corresponding Period NZ$

REPORTED REVENUE (excl GST) FROM CONTINUING OPERATIONS
$926.2m: up 44.9%: $639.0m
TOTAL REPORTED REVENUE (excl GST)
$926.2m: up 44.9%: $639.0m
REPORTED NET (LOSS)/PROFIT FROM CONTINUING OPERATIONS
$8.0m: up 123.7%: -$33.6m
TOTAL REPORTED NET PROFIT
$8.0m: up 123.7%: -$33.6m
EARNINGS PER SHARE (REPORTED)
1.1cps: up from -4.4cps

NORMALISED REVENUE (incl GST)
$966.7m: up 53.1%: $631.5m
NORMALISED NET PROFIT
$138.8m: up 1331.6%: $9.7m
EARNINGS PER SHARE (NORMALISED)
18.3cps: up from 1.3cps

FINAL DISTRIBUTION
Final dividend of 6.0cps, fully imputed
Record date: 8 September 2023, Payment date: 22 September 2023
Dividend Reinvestment Plan will not apply

This is for SkyCity Entertainment Group Limited 2023 Full Year Result

[Left Field]

This is for SkyCity Entertainment Group Limited 2023 Full Year Result

My error. apologies! 

[Waltzing]

Must be a very busy morning in Left Field today!!!

and has anyone got the New SKy BOX and does it work?

or has it been returned to the Lab... i mean warehouse..

was it a bargain?

[Teitei]

Sp going up ahead of the results announcement tomorrow.

Increased Dividend and share buyback to be announced?

Can't wait!

[Left Field]

Are holders happy??

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SKT/416939/401177.pdf

• Revenue grew by 2.4% to $754.1m, driven by growth in customers and increased average
revenue per user (ARPU) across Sky Box, Streaming, Commercial and Broadband products.
• Strategically important rights were secured.
• The expected lift in programming costs was contained to a reported net increase of $21.3m and
with continued strong focus across all cost lines.
• Adjusted for one-off items, NPAT was up by +15.2%.
• A final dividend of 9 cents, with a total dividend of 15 cents or 89% of adjusted free cash flow.

[mistaTea]

https://i.stuff.co.nz/business/132797099/more-adverts-and-streaming-customers-help-sky-tv-achieve-solid-result

"Sky Television has reported an 18% drop in its annual profit to $51m for the year to the end of June, but said that after adjusting for "one-off" items that represented a 15% profit increase."

Lots and lots of 'adjustments' in the presso.

Sky doing as well as can ve expected I think in the rough environment.

But some key items that can't be skirted around...

Page 77 of the AR shows EBITDA down 12%.

And ultimately the cashflow statement (page 84) reveals all.

FCF down to $17M after you deduct the lease payments for the satellite costs.

[LoungeLizard]

Solid enough result and as good as it gets in the current environment. Just to clarify:

Adjusted figures for non-recurring items, impairments etc is standard practice. Not necessarily indicative of creative accounting and needs to be passed by auditors. In Skys case the FY22 EBITDA was adjusted downwards, this year it's up. Swings and roundabouts.

FCF is going to take a hit with additional capex, a return to a full year dividend and share buyback. I note that they target a doubling of dividends by FY26. Pinch of salt, glass half full etc, but with so few shares on issue and NP and customers continuing to lift, might be a real possibility  

[mistaTea]

Solid enough result and as good as it gets in the current environment. Just to clarify:

Adjusted figures for non-recurring items, impairments etc is standard practice. Not necessarily indicative of creative accounting and needs to be passed by auditors. In Skys case the FY22 EBITDA was adjusted downwards, this year it's up. Swings and roundabouts.

FCF is going to take a hit with additional capex, a return to a full year dividend and share buyback. I note that they target a doubling of dividends by FY26. Pinch of salt, glass half full etc, but with so few shares on issue and NP and customers continuing to lift, might be a real possibility  

Good points.

Though I would not include buybacks and dividends as part of the FCF calculation.

[Mysterion]

The capital expenditure and the continued increase of programing costs is the reason why this stock has underperformed.

This is what was missing from the Black Crane thesis which basically assumed costs and programming would stay the same and that Sky could "keep the lights on" while paying all the surplus cash out in dividends. This obviously hasn't happened and is likely the reason why Peter sold and also why John from Osmium came and went so quickly. Once they both realized that the high dividends weren't coming and that global interest rates/bond yields increased to the point where they provided a better return, they took their min gainz and cashed out!!

I was surprised by the light amount of trading today. Seems like all the specy trading is gone. It's just the usual suspects now, ACC, Jupiter, Aussie hedge funds, and the long term retail holders, ie all the boring people, who are just happy to wait and wait for ever to get their min returns and 5% capital gainz per year, just lol.

The price increases are the only reason why the stock isn't down. Effectively their most loyal customers have picked up the bill (again). To be fair there has been a decent amount of sporting content and programing lately to keep the plebs from cutting the chord  too much but the 2nd half results were softer suggesting that the trend is heading down so it's likely that there will be more churn going forward. It's a delayed result as plebs come off deals and Sky is one of the last things customers look to cut back on to save money but eventually the high cost of living will start to bite and the delayed effect will begin. In other words, next years results will show the real downturn in consumer spending and Sky will not be immune.

NZR+ is looking like a real threat. It's obvious that the next rugby deal is not going to be exclusive, same with Warner recently. Sure, it keeps Sky in the game but content producers with control will keep jacking the price of the content to the point were Sky can only just stay in business, that's the situation now and will be in the future. Sky is just a chum boy who is on the streets reselling content for a nickel or two. Who wants to be in that business!

Broadband is dead (never was alive). The new Sky box is a dud. Advertising has come back slightly but that just doesn't make much anyway. Sky Open just looks like another shitty attempt to earn a few extra pennies on ads while giving away content and pissing off the loyal customers even more. I swear, name another business that has screwed over their most loyal customers and drained them all their hard earned like Sky has done! It's like a never ending source of wealth for them to exploit.

I dunno. What's the point of this all! I'm just rambling on again. You know what I'm going say. Takeover, consolidate, merger etc etc etc! It's a weird situation in which you have this large population that are happy to just sit down every night, turn on their TV and pay for what ever as they can't be f*cked with streaming or turning on a computer, so they just keep paying the bill month after month no questions asked. You jack the price up but they keep paying! It's like a tax for dummies. Easy money! The whole industry is in on it. Warner and NZRU know exactly how much to charge Sky without the whole scam coming crashing down.

If rich baby boomers aren't gonna cut the chord this company can never go bankrupt but on the downside how can you make any real money reselling content that costs you as much as you pay for it. Sky may have a monopoly but so do Warner and NZRU as they have a monopoly over Sky, so it's just one company screwing another company. The  thing is Sky gets all the blame from customers but the real winners are Warner and NZRU! Sky is just a front man taking the hits. Like a drug dealer on the streets taking all the risks and making min gainz while the real players are in control manufacturing the sh*t and doing wholesale deals thus making the big bucks!

Just lol at how woke the annual report has become. I mean sure, it's all good and all but just lol at how they rub it in your face like that and take the moral high ground. It wouldn't be so bad if the stock was performing well. This is the problem now, profit isn't really management focus anymore. They're all too happy to just kick the bucket down the road and live off the salaries and create the image that everything is good when in reality it's the shareholders who are suffering and getting abused time after time. Think about all those holders who got run over by the bus in the death placement, they don't get a write up in the annual repot or pretty pictures about their struggles, they are just scum! The reality is that shareholders are down on the list of priorities, like way down. They're like the baby boomer subscribers, getting fu*ked over by Sky and they don't even make a fuss about it. The bottom line is that Sky know they can't make any extra money so they just tell the same BS story over and over, enough to keep everyone happy and not complaining and thus another year goes by etc.

Things are only good know because the balance sheet is so good but you can start to see that over time it will get worse and it won't be able to support the high payouts. Sure next year will be good because there are no content renewals, so dividend will be better, but then what, they'll need to hit the balance sheet again to get the same returns. Then they end up back to the same situation they were in before, a shit balance sheet and no where to go but raise more funds! Rinse repeat etc. 

I don't see the stock price doing anything. What's the point of being a Sky investor. Take on all the risk for a 10% yield when you can get a risk free 18 month term deposit paying 6% at the main banks, just lol. It's in danger of slipping out of the NZX50 if things stay on the current path. ie, inflation and no growth will over take the dividend return and thus other companies will overtake Sky in terms of market cap. This could be as bad as losing the rugby etc.

I don't see the Foxtel merger happening. Too many strings. I don't see a Warner takeover if there was it would likely be more of a bailout. It's clear they just want to follow Disney's path. The partnership model actually works, especially in the AU/NZ market. This leaves Sky with basically no other option. It's on it's own. The future is that they will continue to pay dividends and thus survive, but there will be another watershed 2019 moment again that will destroy all the yield so you need to take that into consideration. So yes, buy the stock now, gets some divys but then you gotta play musical chairs when it comes to the offload as you don't wanna be holding this when the sh*t hits the fan. Maybe you get lucky with a takeover from out of the blue but j**** chr***, you can say that to just about any company these days. Who would have seen the ebos takeover happening!

Conclusion: This needs to delist and go private.

[LoungeLizard]

Good post Mysterion, and you may well be right, but many of us boring holders did alright (eventually) considering most of us got in before the consolation ie around 15-16c or $1.50-$1.60 in new money. And the current SP is still higher than many who lost patience (they know who they are) and jumped ship, shortly after consolidation.

It really depends on how you look at SKY in its current iteration. No debt. Increasing NP, solid EPS and a net customer gain for the last few reporting periods. The yield is ok at present and it may - may - return to paying a very good dividend payer now that the STB money pit is out there. In other words, things have stabilised pretty well, considering how bad things were. As for the future, well I'm one who believes there is still a good business model for an aggregator, particularly one that has sport as the jewel in the crown. And no, I don't see that changing - even the rugby. As I've said before, exclusive deals are becoming a thing of the past and irrelevant as far as the viewer is concerned. A long as the rugby and HBO etc are still available, along with all the other content on SKY, a lot of viewers will still gravitate towards the aggregator, just for the convenience, regardless of whether what they are watching is exclusive or not.

I'd agree that the risk/reward ratio is probably not right for many, which is why SKY needs to return to paying strong, consistent dividends which it seems to have prioritised (it targets a doubling of dividends by FY26). Not for the faint hearted for sure, and I wouldn't put my shirt on them, but not as risky as some would make out - at least for the next couple of years.

[mistaTea]

Good post Mysterion, and you may well be right, but many of us boring holders did alright (eventually) considering most of us got in before the consolation ie around 15-16c or $1.50-$1.60 in new money. And the current SP is still higher than many who lost patience (they know who they are) and jumped ship, shortly after consolidation.

It really depends on how you look at SKY in its current iteration. No debt. Increasing NP, solid EPS and a net customer gain for the last few reporting periods. The yield is ok at present and it may - may - return to paying a very good dividend payer now that the STB money pit is out there. In other words, things have stabilised pretty well, considering how bad things were. As for the future, well I'm one who believes there is still a good business model for an aggregator, particularly one that has sport as the jewel in the crown. And no, I don't see that changing - even the rugby. As I've said before, exclusive deals are becoming a thing of the past and irrelevant as far as the viewer is concerned. A long as the rugby and HBO etc are still available, along with all the other content on SKY, a lot of viewers will still gravitate towards the aggregator, just for the convenience, regardless of whether what they are watching is exclusive or not.

I'd agree that the risk/reward ratio is probably not right for many, which is why SKY needs to return to paying strong, consistent dividends which it seems to have prioritised (it targets a doubling of dividends by FY26). Not for the faint hearted for sure, and I wouldn't put my shirt on them, but not as risky as some would make out - at least for the next couple of years.

Not much to disagree with there - though I think you will continue to see some decent STB attrition in favour of their SSN service.

Fantastic for Sky in terms of having a product that is increasingly in high demand, but not great for ARPU.

There are a lot more costs to cut out over the business as very soon the majority of their subs will be lower ARPU streamers.

So I guess some more 'one off' costs.

And the significant cash they are spending on the new box is a big gamble.

There will not be many new customers who want to fork out $200 for a box they don't really need and then have to pay $81 a month on top of that for a lot of linear content they will never watch.

I will just point out that the price you allegedly paid to buy your shares is only really relevant if you sold your shares now and realised the gain.

All that matters is what you expect Sky to deliver in the future (as this will impact the SP longer term positively or negatively). If the facts (in your opinion) ever change then naturally you would reassess whether the small sum you have invested is in the right place.

Looks like so long as sky keeps up a divvy you will be happy - and nothing wrong with that at all.

Though I am critical of current management, I have stated many times over the last few months that I do not see SNT going bust any time soon. In part because of the rationale you have written.

I just think that on the current trajectory sky will become worth less over time (not worthless, but worth less).

I could be entirely wrong about the long term prospects of Sky.

Redeploying my capital to companies like Berkshire Hathaway after I collected my Sky dividend is a decision I am very happy with (and I expect to outperform SNT by a wide margin long term).