Kingfish sells last of Sky stake

Kingfish, which invests in local companies, exited its investment in Sky. File photo / Sarah Ivey

Investment company concerned at increased costs and arrival of on-demand rivals.

Kingfish, the NZX-listed investment company managed by Fisher Funds Management, has sold its stake in Sky TV because of concerns about the increased cost of delivering new services and the arrival of on-demand rivals.

In its interim report, senior portfolio manager Murray Brown and managing director Carmel Fisher said they had already reduced their holdings in Sky TV to below 2 per cent prior to the broadcaster's annual shareholder meeting in October. At the meeting the company gave an earnings downgrade, citing the rising cost of new services higher programming costs and customers cancelling subscriptions when the Rugby World Cup ended.

Kingfish, which invests in local companies, exited its investment in Sky. Brown and Fisher said they "would prefer to watch from the sidelines while the subscriber on-demand model plays out and see if Sky TV can return to earnings growth again".

The investor also sold down holdings in Opus International Consulting, which made up 1. 1 per cent of its portfolio at the end of March. Kingfish said it has been a "frustrating" investment, because it believes the market for infrastructure consulting remains strong. The company is underperforming in this context, hence the sale, it said.

Kingfish reported a net loss of $2.9 million for the six months ended September 30, from a profit of $4.2 million a year earlier. Management fees were cut by $180,000, or to 1.05 per cent of gross asset value, from 1.25 per cent, because the portfolio under-performed the 90-day bank bill index. It did better than the S&P/NZX 50 Index in the period, with a 1.7 per cent decline in the value of its portfolio against the NZX 50's 4.1 per cent drop.