Sky TV profits up 9pc as MySky migration grows

Gold medal kayaker Lisa Carrington and the rest of the London Olympic team pushed Sky TV programming costs up by 11pc, but profits for the last six months of 2012 were still up 9 per cent. Photo / NZ Herald

Sky Network Television, the pay-TV company that's 44 per cent owned by News Corp, reported a 9 per cent gain in first-half profit as subscribers migrated to its My Sky premium service and spent more.

Profit rose to $68.2 million in the six months ended December 31, from $62.7 million a year earlier, the Auckland-based company said in a statement. Sales rose 3.9 per cent to $443 million.

Total subscribers to Sky TV's services was little changed at 846,988 at December 31 from a year earlier though the number on My Sky climbed 28 per cent to 423,973. Average revenue per subscriber, or ARPU, rose to $75.78 at December 31 from $71.81 a year earlier.

My Sky ARPU rose to $87.39 from $84.71.

Sky TV lifted its full-year profit guidance to a range of $125 million to $130 million, from a previous $120m million to $125 million, and said capital spending would be lower at $90 million to $100 million, from $150 million to $160 million.

It will pay an interim dividend of 12 cents, with a record date of March 8, from 11 cents a year earlier. The shares climbed 2.6 per cent to $5.17, having edged up 6.4 per cent over the past 12 months. The stock is rated 'outperform' based on a Reuters poll of nine analysts, with a median price target of $5.47.

Gross churn rose to 14.6 per cent in the first half from 14.2 per cent, though for My Sky HDi, churn was 10.4 per cent.

Programme operating costs rose 11 per cent, mainly reflecting the costs of hosting the London Olympics. Sales and marketing fell by $7.1 million, reflecting an increased spend the year earlier for the Rugby World Cup.

Capital expenditure fell to$42.8 million in the first half from $69.6 million, reflecting lower decoder and installation costs. Advertising revenue fell 9.5 per cent to $35.3 million.

Total operating expenses rose 3.3 per cent to $333.8 million, led by programming rights and operations.