Sky Posts “Strong Result” Ahead of New Box

Sky TV has recorded big streaming gains but suffered a 4.5% drop in Sky box customers on the eve of launching a new 4K-capable box with third-party apps.

Says chief executive Sophie Moloney: “The launch of the new hybrid Sky Box is a transformational moment for Sky, delivering unmatched choice and ease for our customers.

“Feedback from customers involved throughout the development process has been overwhelmingly positive, and we can’t wait to share it with more New Zealanders.”

The new box will have a 1Tb hard drive, allow the recording of up to five programmes while watching a sixth live, and combine Sky satellite TV, on-demand and streaming on the one device.

Sky box customers make up 53% of Sky’s customer base, and in the 2022 financial year accounted for 70% of revenue.

Here are the key FY22 results and the media release:

Sky Delivers Strong Result and Announces Capital Return and Confident Commencement of Dividends

Sky Network Television Limited (Sky) has delivered a strong result for the 2022 financial year, driven by a return to growth in core revenue, cost control and a clear focus on execution of strategy.

Sky has also provided an update on its capital management strategy, with Chair Philip Bowman saying: “Sky is in a solid cash position resulting from strong and sustainable cash generation and the sale of the Mt Wellington properties. In addition, we have an improved earnings outlook, and access to an undrawn banking facility of $150 million.”

“Against this backdrop the Board has established a capital allocation framework that provides the opportunity to return capital of approximately $70 million to shareholders and deliver a sustainable dividend whilst also reinvesting in the business to support future growth and value creation.”

Key points of today’s announcement:

  • Customer relationships grow to 990,761 (+4%)
  • Revenue growth of $24.9 million to $736.1 million (+4%), fuelled by increase in core subscriptionrevenue and growth in average revenue per user (ARPU) for both Sky Box and Streaming
  • The strong cost focus delivers $35 million of permanent and one-off operating cost savings in linewith Sky’s December guidance update
  • EBITDA of $169.0 million ($153.7 million adjusted for one-offs including $14.0 million gain onproperty sale)
  • Reported NPAT of $62.2 million (+41%) / Adjusted NPAT1 of $49.2 million (+12%), above theguidance range
  • Confident return to paying dividends with a fully imputed final dividend of 7.3 cents per share(60% of Free Cash Flow2).

1 Adjusted NPAT has been provided as this gives a useful comparison for evaluating the underlying performance of the business as it adjusts for one-off items, including the gain on sale of the property. A reconciliation to GAAP is available in the Financial Overview of Sky’s 2022 Annual Report.

2 Free Cash Flow is defined as net cash from operating activities, less net cash used in investing activities, less payments for lease liability principal, and excludes proceeds from sale of Mt Wellington properties. 60% ratio is based on smoothed cash flow across the year.

Commenting on the results, Chief Executive Sophie Moloney said: “This strong result delivers on the promise that Sky has reached a positive inflection point, with the trends we reported in the first six months now firmly established.”

“Our focus on what matters most – our Customers, Content, Crew and Capability – is achieving results, and, encouragingly, means we outperformed against a number of our FY22 targets as the team continued to deliver for our customers, partners and investors.


Sky’s customer relationships grew by 4%, led by strong gains in Streaming, including 14% growth in Neon and an impressive 53% growth in Sky Sport Now (cementing its position as the #1 streaming sports app for regular and casual sports fans).

While Sky Box customer numbers are down 4.5%, Sky’s more deliberate acquisition strategy (designed to reduce early tenure churn and no longer involving deep discounts) is starting to pay off and is expected to deliver valuable improvements in churn and Sky Box revenue. Sky Broadband customers were close to 18,000 after the first full year in market, achieving the targeted attachment rate to Sky Box of 3.3%.

Sophie Moloney commented: “The launch of the new hybrid Sky Box is a transformational moment for Sky, delivering unmatched choice and ease for our customers. Feedback from customers involved throughout the development process has been overwhelmingly positive, and we can’t wait to share it with more New Zealanders. At the same time, our crew have been busy developing options to meet the particular needs of our customers on the soon-to-close Vodafone TV service, and we look forward to welcoming these customers to a total Sky experience.”


“Sky’s unmatched line-up of sport and entertainment content plays a significant role in attracting new customers and keeping them engaged. We are delighted to have won and renewed a number of key content rights during FY22. These include important wins like the Premier League which returned to Sky’s screens earlier this month and is already making a positive impact on customer engagement, as well as securing great content from ViacomCBS (now Paramount) and WarnerMedia as part of our extensive entertainment offering.”

“While our programming costs line is significant, content is at the core of our business. As the ultimate aggregator of the biggest bundle of content in the New Zealand market, it’s the power of our platform (across Sky Box, streaming, Sky Business and free-to-air) that enables us to maximise the value of this investment, and at the same time deliver value for our customers and rewarding relationships for our partners.”


Revenue growth of 4% to $736.1 million was driven by strong growth in Streaming of 27%, continued improvement in Sky Box revenue decline from 8.6% in FY21 to 3.4% in FY22, an initial contribution from Sky Broadband, and continued recovery in Commercial and Advertising revenues.

“It is very pleasing to demonstrate that the return to revenue uplift we reported at our interim results has translated to full year growth, with an improving trend in Sky Box, and all other revenue lines having grown. Importantly, this result also included increases in average revenue per user (ARPU) across both Sky Box and Streaming,” said Sophie Moloney.

Other income increased by 7% and included the $14.0 million gain from the sale of Sky’s Mt Wellington properties (for $56.0 million) which completed in March 2022.

“While the 2022 financial year included an expected step-up in sports and entertainment programming costs, our wide-ranging cost review announced in December 2021 identified total potential cost savings of $40 to $45 million, and we have delivered on that promise with today’s result having realised savings of $42 million across opex and capex. Our focus on costs remains and whilst investment to fuel future growth will involve increased operational and capex spending – including for the rollout of the new Sky Box to customers – this will be partly off-set through further permanent savings already in our sights.”

Reported NPAT increased to $62.2 million (+41%) with Adjusted NPAT of $49.2 million (+12%), above the guidance range.

Capital Management

As previously indicated, the Board and Management have undertaken a detailed review of Sky’s capital management strategy, taking into consideration likely capital needs, opportunities to invest to drive future growth as well as future performance projections.

All capital return options were reviewed and after careful consideration, including taking into account

shareholder feedback and input from advisors, the Board will propose to the 2022 Annual Shareholder

Meeting a return of capital of approximately $70 million through a Court sanctioned pro rata share

cancellation – a return of approximately 40 cents per share held on the record date to shareholders

This approach was selected as the most appropriate way to return a significant sum to shareholders, offering a fair and efficient mechanism that treats all shareholders equally.

The Board has also approved a final dividend of 7.3 cents per share (fully imputed), equivalent to 60% of Free Cash Flow2, to be paid on 23 September 2022.

Philip Bowman thanked shareholders for their support, noting that: “Not only have we made good progress against strategy, but improved financial performance combined with greater confidence in the future has allowed the Board to declare the final dividend for FY22 as well as the capital return.”

“These initiatives strike a careful balance between returning surplus capital, providing an income stream to shareholders, and retaining the flexibility to invest for future growth.”

3 The capital return will result in the cancellation of shares, with shareholders receiving payment for each share cancelled. The price per share cancelled and cancellation ratio will be determined closer to the time, and are expected to be set such that, where no rounding is applied to a shareholder, that shareholder will receive 40 cents per share held on the record date. Fractional entitlements will be rounded, such that shareholders may receive more, or less, than 40 cents per share held on the record date where rounding is applied to them.

An indicative timetable and key facts regarding the return are included at the end of this release and further information will be provided in the Notice of Meeting which will be sent to shareholders in advance of Sky’s Annual Meeting to be held on 2 November 2022.


Sky expects to see continued growth in customer numbers and revenue. While FY23 will include the anticipated increase in programming costs, this will be partly offset by the full year benefit of FY22 permanent cost savings and next phase of cost reduction measures. Capital investment will increase largely due to the roll-out of the new Sky Box and is likely to remain elevated in FY24 before reducing thereafter.

In addition to the investment in the new Sky Box roll-out, FY23 will see Sky invest further to fuel growth through continuing the digital transformation of its technology platform, enhancing data analytics capabilities, developing digital engagement channels and expanding its capability in advertising.

Sky has released guidance for FY23 including Revenue of $750 to $770 million; EBITDA of $150 to $170 million (midpoint of 4.1% above FY22 EBITDA on a normalised basis); NPAT of $50 to $60 million and Capex of $60 to $75 million.

Sky’s balance sheet, supported by an undrawn bank facility of $150 million, is expected to remain strong following the return of capital. Based on delivery of the recent guidance referenced above, the Board anticipates paying FY23 dividends at the upper end of the target pay out range of 50% to 80% of Free Cash Flow (excluding one-offs), and expects total dividends in the range of $17 to $23 million in FY23.

Sophie Moloney said: “While there are clear economic headwinds in the current financial year, we are looking with confidence to FY24 and beyond, as we move beyond this inflection point and position the business to capture the opportunities that are firmly within our sights.”

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5 Responses to “Sky Posts “Strong Result” Ahead of New Box”

  1. Warning: preg_replace(): Unknown modifier '/' in /home/customer/www/ on line 66
    August 25, 2022 at 11:01 am

    Any news on Prime’s future and renewed strategy Philip?

  2. It will remain pivotal to Sky’s strategy, judging by the CEO’s comments.

  3. Things aren’t looking as rosy for Sky when the deal with Warner Bros ends in 2023 ?

  4. I think Sky’s brilliant and has everything I will ever want to watch especially the brilliant sports coverage. I don’t know how people can afford everything else available!

  5. Sky currently has all the best content, especially the Premier League (come on you Saints) they’ll sign their WB contract again when it comes up for renewal as NZ isn’t big enough for anymore streaming services, that’s why we’ll probably never see Discovery+, HBOMAX and Paramount+ …

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