SKT Sky Network Television Limited.

[LaserEyeKiwi]

LOL at "Co-exclusivity" - an oxymoron if I ever heard one.

("No Honey I'm not cheating on you, you have co-exclusivity with Jeff from down the road")

[LaserEyeKiwi]

In previous reports, the 'satellite' customer numbers included Vodafone TV.

This always seemed weird to me, as VTV is a streaming service.

Looking at the fineprint on Page 7 of the presso... the VTV customers are now included in the streaming numbers.

So that means that their direct satellite subs must have grown substantially indeed to hit 565K after deducting VTV customers that are now included in the streaming numbers.

To lift the subs that high ARPU has fallen of course, but ARPU was always going to have to give way to stabilise the base. I expect ARPU to fall further by the FY results, but satellite subs to increase further too.

Overall, I think a very good result.

There was a setup where customers had the normal sky satellite boxes (& dishes) and sky satellite channel packages, but they were billed through Vodafone as part of a package offering by Vodafone.

[LaserEyeKiwi]

I think Disney etc may find their way back to Sky via co-exclusive deals.

Loads of people would prefer to aggregate Disney with the rest of their Sky content (just using Disney as one example).

Makes the rights cheaper for Sky too...

Disney has no incentive to do this - Disney+ is on pace to match/surpass Netflix worldwide - and due to incompetence Sky doesn't even have a set top box where it can offer to resell others streaming apps/services, and instead has to go through other 3rd parties to get its own streaming products onto consumer streaming platforms.

[mistaTea]

There was a setup where customers had the normal sky satellite boxes (& dishes) and sky satellite channel packages, but they were billed through Vodafone as part of a package offering by Vodafone.

Yes the Vodafone reseller arrangement is totally separate to VTV.

The re-seller arrangement has been ended, but VTV lives on.

Those VTV numbers used to also be categorised as 'satellite'.

[LaserEyeKiwi]

Yes the Vodafone reseller arrangement is totally separate to VTV.

The re-seller arrangement has been ended, but VTV lives on.

Those VTV numbers used to also be categorised as 'satellite'.

With Streaming ARPU being only $18, there cant be many VTV subs on there...?

[RTM]

The stock price went up a tiny bit, then back down lol.

I don't understand markets anymore.

I look at it this way.
SKY annoyed a lot of their old shareholders when they had a cash raise at what was it ? 12/13 cents ?
A lot of new holders bought in post that in the 13 - 14 c range. These folk are sitting on a nice gain. ¬ 30% in less than 6 months. I am one of them.
There is nothing in the result to set the world on fire. Its a steady as she goes result.
So some investors are still quite suspicious of SKY, others are happyish to sell at 18 / 19 + cents for a solid short term gain.

And then there is the question as to whether they can withstand the SPARK SPORT / NETFLIX / DISNEY etc assault. Used to think not, but changed my thinking a little as its REALLY annoying having to subscribe to multiple vendors...and we aren't a huge market.

On top of that a lot of subscribers who may also be investors don't have a lot of love for the company...historically they have been treated poorly IMO.

Summary...not a lot of love for the company and they are going to need to get some significant runs on the board to get the SP up a lot further.
Dividend might help....and of course Ogg's takeover rumours.

I am holding for now.

[mistaTea]

With Streaming ARPU being only $18, there cant be many VTV subs on there...?

Yeah thats a good point.

I don't think VTV has really 'taken off'. Perhaps people prefer to have a Sky Box.

Sub numbers must be low indeed given the minimal impact on ARPU. I wonder if Vodafone will eventually ditch the project.

[LaserEyeKiwi]

I think after listening to that call I would say the stock is significantly undervalued.

yes the first 6 months received some one off benefits that improved profits (much lower content costs, while subscribers for the most part kept paying while valuable content was temporarily delayed) - but the 2nd half is going to be impacted by significant one off costs that will depress net profit to somewhere between a small loss and +$5 million.

So I think going forward, given the slow decline in sat customers, combined with some new revenue streams slowly growing and operating expenses and interest costs falling, I think its probably somewhat safe to assume that Net profit will continue in the $35 million+ range in the years to come, which represent an earnings multiple of less than 10x at current price.

I think once dividends restart (hopefully announced in 6 months time) that will be the moment that the share price really kicks in. anything close to 90-100% payout rate would see the share price really take off with a 10% yield at current valuation.

[sb9]

I think after listening to that call I would say the stock is significantly undervalued.

yes the first 6 months received some one off benefits that improved profits (much lower content costs, while subscribers for the most part kept paying while valuable content was temporarily delayed) - but the 2nd half is going to be impacted by significant one off costs that will depress net profit to somewhere between a small loss and +$5 million.

So I think going forward, given the slow decline in sat customers, combined with some new revenue streams slowly growing and operating expenses and interest costs falling, I think its probably somewhat safe to assume that Net profit will continue in the $35 million+ range in the years to come, which represent an earnings multiple of less than 10x at current price.

I think once dividends restart (hopefully announced in 6 months time) that will be the moment that the share price really kicks in. anything close to 90-100% payout rate would see the share price really take off with a 10% yield at current valuation.

Agree on all your points, however Sophie clearly mentioned in the call that dividends are out until FY 22. So nothing on that front for another 12 to 18 month I reckon. If someone is looking to invest for short term dividends, they're going to be disappointed.

[mistaTea]

I think after listening to that call I would say the stock is significantly undervalued.

yes the first 6 months received some one off benefits that improved profits (much lower content costs, while subscribers for the most part kept paying while valuable content was temporarily delayed) - but the 2nd half is going to be impacted by significant one off costs that will depress net profit to somewhere between a small loss and +$5 million.

So I think going forward, given the slow decline in sat customers, combined with some new revenue streams slowly growing and operating expenses and interest costs falling, I think its probably somewhat safe to assume that Net profit will continue in the $35 million+ range in the years to come, which represent an earnings multiple of less than 10x at current price.

I think once dividends restart (hopefully announced in 6 months time) that will be the moment that the share price really kicks in. anything close to 90-100% payout rate would see the share price really take off with a 10% yield at current valuation.

Also, remember that underlying Depreciation/Amortisation will sit around $80M-90M for the full year (after deducting the lease costs under IFRS16).

But actual Capex is only half of that.

So if GAAP earnings stabilise somewhere between $30M-40M, that means FCF will hold at somewhere between $70M-$80M.

A 3c dividend will be about $52M (or 65% - 74% of FCF, depending on earnings).

That would imply 30c per share for those looking for a 10% yield.

Or 39c per share if the market had more faith in Sky as a Going Concern and would take a 7.5% yield.