Sky TV down nearly 28,000 subscribers

Sky TV lost 27,897 subscribers in the 2017 financial year, it was announced ahead of the company's annual general meeting today.

In the chairman's address, released to the NZX ahead of the 2pm AGM, Peter Macourt said the subscriber story was a mixed one with average monthly revenue per subscriber increased 19 cents to $78.82 and gross churn reduced 1.6 per cent to 15.9 per cent.

The drop in subscribers means the pay TV service has 824,782 people signed up to the television provider.

"Your board recognises the importance of dividends to shareholders, and was disappointed to reduce the final dividend, but while we continue to operate in a rapidly changing and uncertain media environment, we will be considering diverting funds from dividends further towards debt reduction," the address said.

It said that Sky's board and management team had a placed a huge focus on the eventually unsuccessful bid to merge with Vodafone New Zealand.

"Having heavily focused on the transaction for an extended period of time and the
considerable investment in working toward a merger, there was a sense of disappointment at the outcome.

"However, this was just one strategic option for Sky and we have now turned our focus to
alternative means to attract and maintain customers of video entertainment."

The year saw Sky's revenue decrease 3.7 per cent to $893.5 million from $928.2m in the previous period, according to the address.

Operating expenses were flat at $601.2m and net profit declined 20.9 per cent
to $116.3m. This included the $2.1m in expenses related to the acquisition of Vodafone NZ.

Earnings before interest, depreciation and amortisation (Ebitda) was $292.3m. A final dividend of 12.5 cents per share, and a total dividend of 27.5 cents per share for the year was announced.

Programming costs increased by $18.3m to 39.1 per cent of revenue.

"The Rio Olympics, a full year of the new more expensive SANZAR rugby contract, return of US PGA golf, Lions Tour, America's Cup, On Demand content and new channel Viceland all contributed to the increase."