Sky Television Releases June 30, 2000 Results
Monday, 14 August 2000
JUNE 30, 2000 YEAR END RESULTS
Subscriber growth particularly digital subscriber growth, were the key highlights of a very successful year for SKY Television.
SKY ended its 30 June fiscal year with impressive subscriber gains, while also passing some significant milestones. It broke the 375,000 total subscriber mark ending the year on 377,000. This represented a gain of 31,000, which was a 63% increase over the previous year’s gain.
SKY’s digital subscriber base passed the 150,000 level ending the year with 162,000. This year-end number is over three times the 53,000 with which it began the year.
SKY’s revenue reached a record high of $263m, an increase of 11%. Unfortunately, the revenue growth was offset to a degree by the declining performance of the New Zealand dollar to its U.S. counterpart, the currency in which SKY purchases much of its programming. The weakening dollar coupled with absorbing the costs of acquiring international cricket for the first time caused SKY’s operating cash flow to grow marginally, reaching $74.1m compared with last year’s $73.7m.
“We always knew the cricket acquisition was going to have a short term impact on our cash flow growth,” said Nate Smith, Chief Executive Officer. “But, this year’s record level of subscriptions combined with one of the lowest rates of disconnects in SKY’s history puts SKY in a very favourable financial position to continue growing its operating cash flow. Over the past months we have been addressing the issue of the weak NZ dollar through our programming purchases, which coupled with our subscriber growth should see the return of a healthy increase in cash flows.”
Owing to increased depreciation and interest costs incurred developing the digital satellite business a net loss of $27.0m was recorded compared with a post tax profit of $4.4m in the previous comparable period.
Mr. Smith said SKY had undertaken several new initiatives this year, all of which will drive subscriptions, and revenue and cash flow growth.
These initiatives include:
The introduction of pay per view movies and events,
The acquisition of the Kingz soccer team,
Entering into the music business through a joint venture with AEI,
Refurbishing SKY’s website, which has caused an increase of 180% in monthly visits.
Included with the website modification SKY began providing real time statistics during rugby and rugby league matches. According to Mr. Smith, “more recently we have tapped into the chatroom mania by dedicating an entire digital channel to an interactive chatzone during international rugby matches.”
“These projects provide a hint of the power that comes from combining interactivity with broadcast television. It’s like fusing atoms.”
Mr. Smith said with the interactive software Open TV soon to be downloaded, SKY’s interactive future is poised to really take off. Interactive weather and games, and writing e-mails on the TV through a wireless keyboard, are just the beginning of how the use of television will change going forward.
Interactive game shows and sporting events, home shopping, concert bookings, and clothing purchases will all ultimately become part of SKY’s interactive future.
In the middle of next year SKY will be introducing a new generation of set top decoders. These decoders will have up to 20 hours of video storage capacity. This storage capacity will mark a revolution in television viewing; allowing the customer to watch what he want when he wants. There will be more on that development in future communication.
I close, by observing that SKY has had an extraordinary year and continues to be company I am very proud to be associated with.
For further details please contact:
Paul Smart Bridgit Gardiner
Chief Financial Officer Publicity Officer
Tel: (09) 579-9999 Tel: (09)579-9998 ext 8761
Fax: (09) 525-8324 Fax: (09)525-5725