New Zealand Professional Investment Services Firm

Forsyth Barr

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

Sky Network Television / Equity Bottom-Up

<h2>Sky TV</h2>
1H20 result ­— First Impressions
We haven’t learnt much from 1H20 result.
EBIT was broadly in line with our expectation, with NPAT lower due to higher interest and tax costs. FY guidance is unchanged.
The key challenges facing SKT are reinforced in the result:
<ul>
<li>High value satellite subscribers continue to decline down -6% yoy, which combined with a -NZ$2 decline in satellite ARPU, drove satellite revenue down -7% or –NZ$23m.</li>
<li>Whilst SKT touted the growth in its streaming subs, up +74% (which includes the acquisition of Rugby Pass), the increase in revenue was only +NZ$7m, considerably below that lost from satellite.</li>
<li>Cost lifted materially, up +16% or +NZ$40m (excl. a c.-NZ$20m reduction from the adoption of the IFRS 16 accounting standard), from (1) NZ$12m of non-recurring restructuring and consultancy charges, (2) content and production, including rights from and support for sporting bodies, &amp; (3) the acquisition of Rugby Pass.</li>
<li>EBITDA, excluding the benefit from IFRS 16, declined -NZ$59m or -39%.</li>
<li>Free cash flow is limited, at –NZ$6m or +NZ$9m excluding the acquisition of Rugby Pass.</li>
</ul>
FY20 guidance unchanged
<ul>
<li>Revenue down -3-6% to NZ$750-770m.</li>
<li>EBITDA (like-for-like) down -32-40% to $170-190m. FY19 reported EBITDA was NZ$241m. The adoption of IFRS 16 provides a c.NZ$40m benefit to FY20.</li>
</ul>
Investor briefing
Conference call: 10.00am (NZ time), NZ 0800 423 972, AU 1 800 590 693, Hong Kong 800 961 113, US 800 289 0459. Passcode: 916691.
Webcast:&nbsp;<a href="https://globalmeet.webcasts.com/starthere.jsp?ei=1281175&amp;tp_key=281a768587" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://globalmeet.webcasts.com/starthere.jsp?ei%3D1281175%26tp_key%3D281a768587&amp;source=gmail&amp;ust=1581551607941000&amp;usg=AFQjCNG4eRRtAl4xSNJSXbHJKTdC5G8vTA" rel="noopener">https://globalmeet.webcasts.com/starthere.jsp?ei=1281175&amp;tp_key=281a768587</a>
1H20 result summary
<figure class="editor-figure mceNonEditable"><img src="https://mail.google.com/mail/u/0?ui=2&amp;ik=f57c39853c&amp;attid=0.1&amp;permmsgid=msg-f:1658274907472119527&amp;th=1703603e0fd1c6e7&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ-7P7nHwoNqkg8HxckBeS1i-b4hvCGh_D_jrFmrh_1iUpMZ1s8EJIe9WaYvtTBsWtd-6f1hOKLTjYHfXlxbbuL2elEAU55FzKGXxn32Akx66EoFRVWq9Grszkg&amp;disp=emb" width="448" height="145" class="editor-image img-responsive" data-image-whitelisted=""></figure>
Source: Company reports, Forsyth Barr analysis
Matt Henry &nbsp;CFA Head of Wealth Management Research Forsyth Barr Limited
P: +64 9 368 0115 | TF: 0800 367 227&nbsp; Level 23, Lumley Centre, 88 Shortland Street, Auckland We have moved to: Ground Floor, 48 Empire Street, Cambridge.

Sky TV
1H20 result ­— First Impressions
We haven’t learnt much from 1H20 result.
EBIT was broadly in line with our expectation, with NPAT lower due to higher interest and tax costs. FY guidance is unchanged.
The key challenges facing SKT are reinforced in the result:

High value satellite subscribers continue to decline down -6% yoy, which combined with a -NZ$2 decline in satellite ARPU, drove satellite revenue down -7% or –NZ$23m.
Whilst SKT touted the growth in its streaming subs, up +74% (which includes the acquisition of Rugby Pass), the increase in revenue was only +NZ$7m, considerably below that lost from satellite.
Cost lifted materially, up +16% or +NZ$40m (excl. a c.-NZ$20m reduction from the adoption of the IFRS 16 accounting standard), from (1) NZ$12m of non-recurring restructuring and consultancy charges, (2) content and production, including rights from and support for sporting bodies, &amp; (3) the acquisition of Rugby Pass.
EBITDA, excluding the benefit from IFRS 16, declined -NZ$59m or -39%.
Free cash flow is limited, at –NZ$6m or +NZ$9m excluding the acquisition of Rugby Pass.

FY20 guidance unchanged

Revenue down -3-6% to NZ$750-770m.
EBITDA (like-for-like) down -32-40% to $170-190m. FY19 reported EBITDA was NZ$241m. The adoption of IFRS 16 provides a c.NZ$40m benefit to FY20.

Investor briefing
Conference call: 10.00am (NZ time), NZ 0800 423 972, AU 1 800 590 693, Hong Kong 800 961 113, US 800 289 0459. Passcode: 916691.
Webcast:&nbsp;https://globalmeet.webcasts.com/starthere.jsp?ei=1281175&amp;tp_key=281a768587
1H20 result summary

Source: Company reports, Forsyth Barr analysis
Matt Henry &nbsp;CFA Head of Wealth Management Research Forsyth Barr Limited
P: +64 9 368 0115 | TF: 0800 367 227&nbsp; Level 23, Lumley Centre, 88 Shortland Street, Auckland We have moved to: Ground Floor, 48 Empire Street, Cambridge.

Sky TV: 1H20 Result ­— First Impressions

Sky Network Television

Sky TV: 1H20 Result ­— First Impressions

Sky TV: 1H20 Result — First Impressions