Sky TV profits fall nearly 10pc to $88.4m

Costs associated with rolling out its new high definition service have hit Sky TV's profits this year. Photo / Brett Phibbs

Sky Television Network today announced a 9.6 per cent fall in net profit after tax to $88.4 million for the year ended June 30, despite increasing subscribers and revenue.

Sky's results were impacted by the costs of commissioning a new server-based digital television station and the launch of High Definition (HD) television.

Pre-tax operating profit was down 12.7 per cent to $125.8m (from $144.06m the previous year) on trading revenue that was up 5 per cent to $691.96m ($658.75m).

The latest after-tax profit compared with $97.71m in the year to June 2008.

Earnings per share fell to 22.71cps (25.11).

The directors declared a fully imputed final dividend of 7cps, giving a total dividend for the year of 14c.

Chief executive John Fellet described it as "another good year, with an increase in viewership of 6 per cent, reduced churn, continued growth in subscriber numbers and increased average revenue earned per subscriber".

Sky's subscriber base grew by 30,326 or 4.1 per cent over the previous year, to a new high of 778,902.

The subscriber base comprises 623,564 residential digital subscribers, 22,772 residential UHF subscribers, 111,260 wholesale subscribers and 21,306 commercial and other subscribers.

Sky is now in 47.2 per cent of New Zealand homes.

The new server-based digital television station and HD television introduced a new layer of fixed costs to the business, the benefits of which would be realised as an increasing number of subscribers chose these new services, said Fellett.

The company was pleased with the take up of the new MySky HDi services with over 85,000 decoders having been installed in the year to June 30. Interest in the product among existing and new subscribers continued to be strong.

- NZPA