Lions tour credited with Sky TV customer boost

Sky Television has racked up more than 600,000 subscribers, hitting the target a month earlier than expected.

Sky achieved its last major goal of 500,000 two-and-a-half years ago and the company expects, at a rate of about 40,000 new subscribers a year, it will be another two years before it hits the next goal of 700,000.

UBS research head David Lane said his brokerage was picking a gain of 37,500 net new subscribers for the full year. The Lions' tour is credited with bringing more subscribers to the fold.

Chief executive John Fellet said there had already been a lot of excitement over the tour, which had possibly contributed to the early achievement of the company's target for subscribers.

"Tickets were expensive and a lot of people couldn't get any," he said, suggesting some of that money may have found a home in Sky Television subscriptions.

Sky shares were buoyed by the announcement, gaining 7c to close at $6.77 in a flat market.

The shares have risen 27 per cent in a year, with shareholders benefiting when the company said in February it would pay its entire interim profit in a 12.5c a share dividend.

Fellet said the company invested $500 in bringing each new customer on board, but each new customer meant greater profits. "It allows us to cover fixed costs that much easier." Reaching the target early was a "fantastic achievement" but there was still work to do, Fellet said.

Sky is now installed in about 40 per cent of New Zealand households.