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 headwinds and pressured household spending.

• Free cash flow rose 43.2% to $23.7m, supporting a 26.7% increase in dividends to 19.0cps.

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

• Employee engagement and NPS improved significantly, with a 12-point rise in engagement.

• Customer relationships declined to 938,760, impacted by external factors and strategic marketing decisions.

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.

• EBITDA grew 2.9% to $153 million, with margin rising to 20% as cost growth was limited to 0.8%.

• NPAT was $49.2 million, down 3.7% year-on-year due to higher depreciation.

• Free cash flow increased 43.2% to $23.7m, enabling a 26.7% increase in fully imputed dividends.

• Capex rose 7.1% to $82.9m, reflecting investment in new products and ad-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% CAGR through FY26, reflecting ongoing economic headwinds.

• CapEx guidance (excluding satellite migration) trending lower, targeting 7–9% of revenue by FY26.

• Dividend expected to rise to at least NZD 0.21 per share in FY25, with confidence in achieving NZD 0.30 per share by FY26.

• Excludes one-off transformation costs and satellite migration capex ($10m–$15m estimated).