Sky upbeat at growth prospects

By SIMON HENDERY media writer

Despite their company being in the throes of a takeover bid which could force them to sell out of what has been a strong investment, Sky TV shareholders remained ominously silent at the company's annual meeting yesterday.

When chairman Peter Macourt called for questions from the 80-strong audience near the end of the 35-minute meeting in Auckland, none were forthcoming.

"No questions?" Macourt mused. "I guess that's what having a good year does for you."

Earlier chief executive John Fellet had pointed out that Sky Network Television's share price had leapt 50 per cent over the past year, compared to an overall market rise of 10 per cent.

For the year to the end of June the company also reported its first - and long-awaited - profit since shifting the focus of its business to its digital platform.

Almost 40 per cent of households are now Sky customers and Fellet was upbeat about future growth, telling the meeting: "I don't see anything over the next 10 years that will keep us from getting to 70 per cent."

Majority shareholder INL's takeover offer for the 34 per cent of Sky it does not already own rated only a passing mention from Macourt, who simply reminded shareholders that a report on the offer from Sky's independent directors was mailed out yesterday.

Independent directors John Hart and Barrie Downey's opinion is that the INL offer - $3.35 in cash for each Sky TV share, plus three INL shares for every 10 Sky TV shares - is not fair for Sky's minority shareholders.

Second largest shareholder Telecom, however, has accepted the deal and sold its 12 per cent stake in the company.

The move meant that Telecom's representative on the Sky board, Marko Bogoievski, who resigned by rotation at yesterday's meeting, could not be re-elected in that capacity.

He remains on the board, however, after being invited to fill the casual vacancy his departure created.

In August Sky told the market it expected to make a net profit of between $28 million and $35 million this financial year.

Fellet told the meeting that earnings guidance remained in place.

Pay TV penetration

Percentage of households

Australia 22%

France 32%

New Zealand 39%

Britain 41%

Finland 45%

Germany 70%

Switzerland 83%

United States 85%

Benelux* 95%

*Belgium, Netherlands, Luxembourg

Source: Sky TV