SKT Sky Network Television Limited.

**mistaTea** · 10-02-2022, 01:51 PM

Originally Posted by Habits

I have a truck load of these I can sell to instos.... after the price has ramped up big time. 3.50?

Hard to really gauge if the SP movement currently observed is down to instos. If they are, they are hardly loading up their own trucks given the relatively low turnover.

And that is the thing with low trading volumes...it doesn't take much change to significantly change the SP in the short term (and that goes in both directions btw).

A bit of a boost in quoted value a couple of weeks out from the HY results (and anticipated capital management plan) should be of no real surprise. Of course there was going to be some late interest from those hoping to make a quick and easy buck.

**mistaTea** · 10-02-2022, 03:27 PM

Just had a quick look at the Balance Sheet again.

As of 30 June 2021 they had $35M cash on the books
We just sold the campus for $56M. Cash settlement in March. Let's just round that down to $50M for our purposes because there will be agents fees and lawyers fees etc to pay (we won't be paying $6M, but I just want to keep the numbers round).
Revised FY22 EBITDA is in the range of $150M - $160M. So let's take the midpoint of $155M. Deduct $45M CAPEX, $25M tax and $37M lease liabilities = $48M FCF. Divide that by two for the HY results (not completely accurate because Sky get an influx of cash at certain points of the year when people pay upfront for Annual Passes of NEON and Sky Sport NOW - but 'good enough' for our purposes.)
So we have $35M cash + $50M or so net proceeds from the campus sale + $24M FCF generated by 31 December 2021 = $109M available cash. This does not include any additional FCF generated in Jan and Feb which will only appear in the FY results.
$109M available cash MINUS $50M tax free capital return MINUS $20M dividend leaves $39M cash in the bank. Plenty of money for working capital requirements and other opportunities. Remember: the $48M FCF calculation earlier already takes into account the full $45M they plan to spend on CAPEX projects in FY22.
They will generate another $24M FCF by 30 June 2022. Depending on the % of FCF that Bowman comits as dividends we could get another $15-$20M at the FY results. A total $35M dividend (lower end) at a 5% yield would imply a $700M market capitalisation (~$4/share based on current shares outstanding).

**LoungeLizzard** · 10-02-2022, 03:59 PM

Originally Posted by mistaTea

Just had a quick look at the Balance Sheet again.

As of 30 June 2021 they had $35M cash on the books
We just sold the campus for $56M. Cash settlement in March. Let's just round that down to $50M for our purposes because there will be agents fees and lawyers fees etc to pay (we won't be paying $6M, but I just want to keep the numbers round).
Revised FY22 EBITDA is in the range of $150M - $160M. So let's take the midpoint of $155M. Deduct $45M CAPEX, $25M tax and $37M lease liabilities = $48M FCF. Divide that by two for the HY results (not completely accurate because Sky get an influx of cash at certain points of the year when people pay upfront for Annual Passes of NEON and Sky Sport NOW - but 'good enough' for our purposes.)
So we have $35M cash + $50M or so net proceeds from the campus sale + $24M FCF generated by 31 December 2021 = $109M available cash. This does not include any additional FCF generated in Jan and Feb which will only appear in the FY results.
$109M available cash MINUS $50M tax free capital return MINUS $20M dividend leaves $39M cash in the bank. Plenty of money for working capital requirements and other opportunities. Remember: the $48M FCF calculation earlier already takes into account the full $45M they plan to spend on CAPEX projects in FY22.
They will generate another $24M FCF by 30 June 2022. Depending on the % of FCF that Bowman comits as dividends we could get another $15-$20M at the FY results. A total $35M dividend (lower end) at a 5% yield would imply a $700M market capitalisation (~$4/share based on current shares outstanding).

Can't argue with any of that. The fly in the ointment is the Board themselves and their history of being tone-deaf to shareholders concerns, not to mention general incompetence that all but destroyed the company. I think they would be right to be a little bit conservative in returning capital back to shareholders in order to build up a bit more of a war-chest, but 24/2 is the real test as to whether they are now prepared - and have the confidence - to reward long suffering shareholders (the owners).

**jimdog31** · 10-02-2022, 04:07 PM

Originally Posted by JohnnyTheHorse

A stock always pulls back after a strong run. What is important is how much it pulls back. The more it pulls back, the lower the probability of it going on to make new highs.

It seems like SKT pulled back a large amount, however it was actually in the range for a continuation pattern (weekly bull flag i.e. less that 38% retracement and hold EMA12). This means continuation to new highs is favoured probability wise. In fact it retraced to my accumulate target pretty much to the penny. Adjusting my long term portfolio I allowed myself to add even more (after trimming other NZX positions) and I most certainly loaded up the swing trading account.

Can't predict what will happen, but after watching so many charts this is what I see as most probable... We won't immediately break to new highs, instead will reject from resistance initially. This will give us a daily trend change which still hasn't occurred, thereby firming up a support level. We will then break out some time next week prior to the announcement. But all this doesn't really matter as either way true value will be shown on the 23rd.

You're some kind of Marty Mcfly JTH.

**sb9** · 10-02-2022, 04:22 PM

Originally Posted by mistaTea

Just had a quick look at the Balance Sheet again.

As of 30 June 2021 they had $35M cash on the books
We just sold the campus for $56M. Cash settlement in March. Let's just round that down to $50M for our purposes because there will be agents fees and lawyers fees etc to pay (we won't be paying $6M, but I just want to keep the numbers round).
Revised FY22 EBITDA is in the range of $150M - $160M. So let's take the midpoint of $155M. Deduct $45M CAPEX, $25M tax and $37M lease liabilities = $48M FCF. Divide that by two for the HY results (not completely accurate because Sky get an influx of cash at certain points of the year when people pay upfront for Annual Passes of NEON and Sky Sport NOW - but 'good enough' for our purposes.)
So we have $35M cash + $50M or so net proceeds from the campus sale + $24M FCF generated by 31 December 2021 = $109M available cash. This does not include any additional FCF generated in Jan and Feb which will only appear in the FY results.
$109M available cash MINUS $50M tax free capital return MINUS $20M dividend leaves $39M cash in the bank. Plenty of money for working capital requirements and other opportunities. Remember: the $48M FCF calculation earlier already takes into account the full $45M they plan to spend on CAPEX projects in FY22.
They will generate another $24M FCF by 30 June 2022. Depending on the % of FCF that Bowman comits as dividends we could get another $15-$20M at the FY results. A total $35M dividend (lower end) at a 5% yield would imply a $700M market capitalisation (~$4/share based on current shares outstanding).

Well articulated analysis in there MT. Hope SKT board come 70% close to this.

**mistaTea** · 10-02-2022, 04:38 PM

Originally Posted by LoungeLizzard

Can't argue with any of that. The fly in the ointment is the Board themselves and their history of being tone-deaf to shareholders concerns, not to mention general incompetence that all but destroyed the company. I think they would be right to be a little bit conservative in returning capital back to shareholders in order to build up a bit more of a war-chest, but 24/2 is the real test as to whether they are now prepared - and have the confidence - to reward long suffering shareholders (the owners).

By my calcs they would still have close to $50M war chest by the FY results.

Unless they have a compelling reason to hold more cash than that, they need to return capital as I outlined above without delay.