Sky Network Television (SKT) H2 2024 earnings summary

Executive summary

• Delivered solid FY24 results within guidance, with revenue up 1.6% to $766.7m and EBITDA up 2.9% to $153.0m, despite economic pressures and subdued household spending in H2.

• Achieved third consecutive year of revenue growth, expanded margin, and strong free cash flow supporting a 26.7% dividend increase above prior guidance.

• Growth in streaming, broadband, and advertising offset headwinds in traditional Sky Box revenue.

• Customer and employee engagement improved, with NPS up 6 points and employee engagement up 12 points.

• Customer numbers for Neon and Sky Box were below expectations, but customer experience improved.

Financial highlights

• Revenue increased by NZD 12.4 million (1.6% year-on-year) to $766.7m, driven by Sky Sport Now, broadband, and advertising growth.

• EBITDA grew 2.9% to NZD 153 million, with margin rising to 20%.

• NPAT was NZD 49.2 million, just below the midpoint of guidance, impacted by higher depreciation from new products.

• Free cash flow grew over 43% year-on-year to $23.7m, enabling a 26.7% increase in fully imputed dividends.

• CapEx was NZD 83 million, higher year-on-year, mainly for product rollout and advertising tech.

Outlook and guidance

• FY25 revenue guidance: $760–785m; EBITDA: $150–170m; NPAT: $40–55m; capex: $55–70m; dividend: at least 21.0cps.

• Revenue growth target reset to 1–2% per annum through FY26, reflecting ongoing economic headwinds.

• CapEx guidance (excluding satellite migration) trending lower, targeting 7%-9% of revenue a year earlier than planned.

• Dividend expected to increase to at least NZD 0.21 per share in FY25, with a target of NZD 0.30 per share by FY26.

• Further cost reduction opportunities identified and being actioned; one-off transformation costs excluded from EBITDA/NPAT guidance.