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Sky Television Announces 2011 Annual Result

Media Release
26 August 2011

Sky Television Announces 2011 Annual Result

SKY performed well over the last year in an environment where the economy provided plenty of challenges. With more than 1000 SKY employees at our Auckland, Albany and regional sites and almost 1000 contractors countrywide, their support and teamwork has been instrumental in the company’s continuing success.

In the year to 30 June 2011 SKY increased subscriber numbers, held churn at almost the same level as the previous year and continued its strong growth in the number of MY SKY decoders. Currently more than 35% of all SKY subscribers now enjoy this personal video recorder technology.

John Fellet, SKY Chief Executive said, “SKY has had another excellent year, continuing to show gains across all key areas including growth in subscriber numbers, increased average revenue earned per subscriber and a continued reduction in churn. We have also been pleased with the performance of our free-to-air channel, Prime, which has continued to increase its share of advertising revenue”.

This year SKY launched its online TV website iSKY, in partnership with a number of NZ internet service providers,. With the government project to deliver UFB (ultra-fast broadband) to 75% of
New Zealanders and the ever growing desire to consume content via devices other than the TV, in the future, iSKY will become a significant alternate to satellite for the delivery of content.

Eight new channels were added in 2011; TVNZ kidzone24, MTV Classic, Nick Jr, RT (Russia Today), Daystar, SKY Sport Mosaic, France 24 (in both English and French language). Three new high definition channels were also launched; ESPN, SKY Sport 3 and SKY On Demand HD.

SKY continues to deliver excellent value to Sport enthusiasts with eight sport channels on offer. The live broadcast of the Delhi Commonwealth Games; 5 dedicated Sport channels on SKY plus 17 hours a day live on Prime was one of the highlights from last year. The agreement to broadcast international Silver Ferns Netball complements the Trans-Tasman netball SKY already broadcasts.

John Fellet, SKY Chief Executive said, “We look towards the Rugby World Cup where we are poised to showcase to the world our expertise in sport production and to thrill sport subscribers with all live broadcasts of all 48 games.”

Total revenue was $796.9 million, a 7.4% increase compared to last year. This can in part be attributed to the 3.4% increase in new subscribers. 27,024 new subscribers joined SKY, bringing total subscribers to a new high of 829,421.

The number of MY SKY subscribers has continued to increase, typically attracting customers who watch more television. The total number of MY SKY HDi decoders, and was 279,875 at 30 June 2011, an increase of 10.6% from the previous year.

Operating costs were $475.2 million, a 5.9% increase on the previous year. The increase can be primarily attributed to the additional content costs associated with the launch of new channels, depreciation of OSB assets, increased advertising costs (associated with greater advertising revenue) and an increase in subscriber management costs.

SKY’s net profit rose by 16.8% to $120.3 million. SKY announced a fully imputed special dividend of 25 cents per share and an increase in the final dividend to 10.5 cents per share.

As of yesterday, SKY’s subscriber count was 836,622.

- ends -

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