Sky Network Television Ltd

SKT Details

Trading ex-dividend: Shares of Sky Network Television Ltd (ASX: SKT) declined 6.4% on September 04, 2017, while the stock has been removed from the S&P/ASX 200 Index (effective at the open of trading on September 18, 2017) as per the latest S&P Dow Jones Indices announcement. SKT also traded ex-dividend on September 04, 2017. Further, the group’s FY17 performance was not up to the mark with a reported 3.7% decline in revenue at $893.5 million while posting 10.1% decline in EBITDA. Accordingly, Net profit after tax dropped by 20.9% to $116.3 million for the period (including one off costs of $2.1 million incurred in relation to the planned acquisition of Vodafone NZ).


Results summary; (Source: Company reports)

Residential subscription revenue decreased by 3.7% to $725.1 million due to fewer satellite customers and a lower uptake of premium services (Sports and Movies) and lower pay-per-view buys. Other subscription revenue (includes commercial revenue earned from SKY subscriptions at hotels, motels, restaurants and bars throughout New Zealand, revenue derived from transmission of programming for third parties and revenue from other subscriptions services such as NEON, FAN PASS and IGLOO) increased 3.7% to $82.2 million in 2017 due to an increase in subscriber numbers for NEON and FAN PASS. Advertising sales revenue decreased by 8.0% to $68.1 million in 2017. Pay television advertising revenues decreased from $49.3 million in 2016 to $46.7 million in 2017, a decrease of 5.3% whilst Prime revenues decreased from $24.7 million in 2016 to $21.4 million in 2017. Installation and other revenues decreased by 17.0% to $18.1 million in 2017 led by the result of fewer installations undertaken.

The stock has declined 30% over the past six months, while it is down 47.1% in the last one year as on September 01, 2017. Given the subdued financials and challenges in the industry, we maintain an “Expensive” recommendation on the stock at the current price of $ 2.34

Nine Entertainment Co Holdings Ltd

NEC Details

Reported loss for FY17: For the year to 30 June 2017, Nine Entertainment Co Holdings Ltd (ASX: NEC) reported a consolidated net loss after income tax of $203.4 million (2016: profit $324 million). The Group’s revenue decreased by 3% to $1,237.8 million (2016: $1,282.4 million) led by 4% decline in Television segment with 3.7% decline in Metro FTA market and 2.8% decline in Regional market. Premium revenue was up 16% as local content creates unprecedented demand for integration opportunities. Revenue from Digital segment grew 3% yoy to $154.7 million and is witnessing margin improvement. The Group’s earnings before interest, tax, depreciation and amortisation (EBITDA) grew 2% yoy to $205.6 million. The company expects revenue from Television segment to decline by 1-2% for FY18 while expecting EBITDA of $186 million to $207 million.


Financial results summary; (Source: Company reports)

The stock has moved up 31.9% over the past six months, while it is up 36.5% in the last one year as on September 01, 2017.  The stock was however down 4% as it traded ex-dividend on September 04, 2017. Given the improving momentum in digital segment with improving margin, we maintain a “Hold” recommendation on the stock at the current price of $ 1.31

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