New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

Sky Network Television / Equity Bottom-Up

<ul><li>The last decade for Sky TV (SKT) can be summarised by two very different periods.</li><li>Our key takeaway from its FY25 result, announced NZ Rugby deal and recently announced Discovery NZ (DNZ) acquisition, is that SKT is likely to, at the very least, maintain its current earnings power and cash flow over the medium term.</li><li>The strong growth in Sky Sports Now (SSN) did not fully offset the continued decline in Sky Box revenues, and we don’t expect it will in FY26 or FY27 either, but it is getting closer.</li></ul>

The last decade for Sky TV (SKT) can be summarised by two very different periods.Our key takeaway from its FY25 result, announced NZ Rugby deal and recently announced Discovery NZ (DNZ) acquisition, is that SKT is likely to, at the very least, maintain its current earnings power and cash flow over the medium term.The strong growth in Sky Sports Now (SSN) did not fully offset the continued decline in Sky Box revenues, and we don’t expect it will in FY26 or FY27 either, but it is getting closer.

Sky TV FY25 Result—Now For The Conversion

<ul><li>Sky TV (SKT) is due to report its FY25 result on Friday, 22 August.</li><li>First time FY26 earnings guidance should be a step up on FY25, with the benefit of annualising 2H25 cost savings and likely lower NZ Rugby rights.</li><li>We expect a FY25 result closer to the bottom end of current guidance, given a soft NZ consumer backdrop and its satellite transition earlier in the year likely increased churn (temporarily).</li></ul>

Sky TV (SKT) is due to report its FY25 result on Friday, 22 August.First time FY26 earnings guidance should be a step up on FY25, with the benefit of annualising 2H25 cost savings and likely lower NZ Rugby rights.We expect a FY25 result closer to the bottom end of current guidance, given a soft NZ consumer backdrop and its satellite transition earlier in the year likely increased churn (temporarily).

Sky TV FY25 Preview—Eyes On Rugby Rights

<ul><li>Sky TV (SKT) is structurally challenged, with a fast declining satellite subscriber base.</li><li>But at 6x FY26 PE and a forward gross dividend yield of ~14%, that is more than reflected in the share price.</li><li>Not all trends are going against SKT. Content costs, in particular for domestic sports rights, have likely passed their peak (certainly in real terms), Sky Box frustrations seem to be abating, and the streaming ambitions of large content providers have at least temporarily been pared back. </li></ul>

Sky TV (SKT) is structurally challenged, with a fast declining satellite subscriber base.But at 6x FY26 PE and a forward gross dividend yield of ~14%, that is more than reflected in the share price.Not all trends are going against SKT. Content costs, in particular for domestic sports rights, have likely passed their peak (certainly in real terms), Sky Box frustrations seem to be abating, and the streaming ambitions of large content providers have at least temporarily been pared back. 

Sky TV - Approaching the Tryline: Up to OUTPERFORM

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>The <a href="https://www.smartkarma.com/entities/seven-west-media-ltd" target="_blank" data-smartkarma-citation="entities:804:1" rel="noopener">Seven West Media (SWM AU)</a> IE considers the SXL merger offer to be in the best interests of its shareholders, absent a superior proposal.</li>
<li>The merger requires approval from SWM shareholders, ACMA, and the ACCC. The <a href="https://www.accc.gov.au/public-registers/mergers-and-acquisitions-registers/public-informal-merger-reviews-register/southern-cross-media-limited-seven-west-media-limited" target="_blank" rel="noopener">ACCC’s findings</a> will be announced on 18 December. </li>
<li>The scheme vote is low risk as large SWM shareholders are supportive. Shares are trading through terms likely due to speculation of a competing bidder, which is unlikely to occur.  </li>
</ul>


The Seven West Media (SWM AU) IE considers the SXL merger offer to be in the best interests of its shareholders, absent a superior proposal.
The merger requires approval from SWM shareholders, ACMA, and the ACCC. The ACCC’s findings will be announced on 18 December. 
The scheme vote is low risk as large SWM shareholders are supportive. Shares are trading through terms likely due to speculation of a competing bidder, which is unlikely to occur.  


Seven West Media (SWM AU): Scheme Vote on 22 December

<ul><li>Sky TV's (SKT) FY24 result was soft, with less-than-expected subscribers across its Satellite and Streaming businesses driving a lower FY25 outlook.</li><li>This result is more understandable when considering SKT battled the combination of both a softening consumer backdrop, and a light content calendar over 2H24.</li><li>With SKT continuing to lose Satellite subscribers at pace, it is becoming more reliant on its ability to grow its Streaming business, and deliver reductions in programming costs to retain current profitability. </li></ul>

Sky TV's (SKT) FY24 result was soft, with less-than-expected subscribers across its Satellite and Streaming businesses driving a lower FY25 outlook.This result is more understandable when considering SKT battled the combination of both a softening consumer backdrop, and a light content calendar over 2H24.With SKT continuing to lose Satellite subscribers at pace, it is becoming more reliant on its ability to grow its Streaming business, and deliver reductions in programming costs to retain current profitability. 

Sky TV - FY24 Result — Outside the Medals

New Zealand

SKY Network Television Limited is a pay-television operator in New Zealand.  The Company broadcasts various pay networks via UHF and Digital satellite platforms and offers a variety of programming including news, sports, movies, digital radio and pay-per-view events.

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Sky Network Television (SKT NZ)

Sky TV FY25 Result—Now For The Conversion

The strong growth in Sky Sports Now (SSN) did not fully offset the continued decline in Sky Box revenues, and we don’t expect it will in FY26 or...

Forsyth Barr

Sky TV FY25 Preview—Eyes On Rugby Rights

First time FY26 earnings guidance should be a step up on FY25, with the benefit of annualising 2H25 cost savings and likely lower NZ Rugby rights.

Forsyth Barr

Sky TV - Approaching the Tryline: Up to OUTPERFORM

Sky TV (SKT) is structurally challenged, with a fast declining satellite subscriber base. But at 6x FY26 PE and a forward gross dividend yield of...

Forsyth Barr

Seven West Media (SWM AU): Scheme Vote on 22 December

The scheme vote is low risk as large SWM shareholders are supportive. Shares are trading through terms likely due to speculation of a competing...

Arun George

Sky TV - FY24 Result — Outside the Medals

Sky TV's (SKT) FY24 result was soft, with less-than-expected subscribers across its Satellite and Streaming businesses driving a lower FY25 outlook.

Forsyth Barr

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