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>Sky TV (SKT) reported a solid 1H26 result, with its Sky Standalone business broadly in line with expectations, but Sky Free (previously Discovery NZ) delivered a better outcome.</li><li>The two key positive surprises from the result were: (1) SKT reported a net cash balance of NZ$100m; and (2) Sky Free is already EBITDA positive.</li><li>With its strong cash position and free cash flow generation, we believe the risk to its current NZ30cps dividend is to the upside over the short to medium term.</li></ul>

Sky TV (SKT) reported a solid 1H26 result, with its Sky Standalone business broadly in line with expectations, but Sky Free (previously Discovery NZ) delivered a better outcome.The two key positive surprises from the result were: (1) SKT reported a net cash balance of NZ$100m; and (2) Sky Free is already EBITDA positive.With its strong cash position and free cash flow generation, we believe the risk to its current NZ30cps dividend is to the upside over the short to medium term.

Sky TV 1H26 Result—Cash Levels Sky High

<ul><li>Sky TV (SKT) will report its 1H26 result on Thursday 26 February.</li><li>In SKT’s November ASM update, it reiterated FY26 guidance but indicated softness in both Sky Free advertising revenue and Neon subscribers.</li><li>Our key focus areas are: (1) a sequential improvement in satellite ARPU; (2) continued +9% year-on-year growth in Sky Sports Now (SSN) revenue; (3) cost control; and (4) free cash flow generation of ~+NZ$25m in 1H26, its strongest 1H since 1H22.</li></ul>

Sky TV (SKT) will report its 1H26 result on Thursday 26 February.In SKT’s November ASM update, it reiterated FY26 guidance but indicated softness in both Sky Free advertising revenue and Neon subscribers.Our key focus areas are: (1) a sequential improvement in satellite ARPU; (2) continued +9% year-on-year growth in Sky Sports Now (SSN) revenue; (3) cost control; and (4) free cash flow generation of ~+NZ$25m in 1H26, its strongest 1H since 1H22.

Sky TV 1H26: Switching Channels, HBO To Sky Free

<ul><li>Netflix’s acquisition of Warner Bros. (WB) has potential implications for Sky TV (SKT) and, in particular, Neon.</li><li>Given SKT’s existing deal and acquisition timing, the impact to FY26 for SKT is likely to be minimal, but FY27 and beyond have become slightly more uncertain.</li><li>We leave our forecasts unchanged for now and retain OUTPERFORM, with its 13% 12-month forward gross yield attractive and free cashflow set to grow from its sports and ad platforms.</li></ul>

Netflix’s acquisition of Warner Bros. (WB) has potential implications for Sky TV (SKT) and, in particular, Neon.Given SKT’s existing deal and acquisition timing, the impact to FY26 for SKT is likely to be minimal, but FY27 and beyond have become slightly more uncertain.We leave our forecasts unchanged for now and retain OUTPERFORM, with its 13% 12-month forward gross yield attractive and free cashflow set to grow from its sports and ad platforms.

<ul><li>Sky TV (SKT) has performed well over the past year, but we still see the risk–reward as attractive.</li><li>We believe SKT has a path to grow its dividend from NZ30cps in FY26 to NZ40cps over the next few years.</li><li>While SKT faces structural headwinds in its satellite business, we take comfort that both sports subscribers and ARPU (aggregating satellite plus Sky Sports Now [SSN]) have been broadly stable over the past five years; we expect this to continue.</li></ul>

Sky TV (SKT) has performed well over the past year, but we still see the risk–reward as attractive.We believe SKT has a path to grow its dividend from NZ30cps in FY26 to NZ40cps over the next few years.While SKT faces structural headwinds in its satellite business, we take comfort that both sports subscribers and ARPU (aggregating satellite plus Sky Sports Now [SSN]) have been broadly stable over the past five years; we expect this to continue.

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<p style="text-align: left;">Corrections across global ex-US markets continue to limit attractive investment opportunities from both a price and relative strength perspective.  We provide a recap and outlook for global equity markets and highlight individual opportunities across various markets within the Health Care, Communications and Transportation sectors.</p>

Corrections across global ex-US markets continue to limit attractive investment opportunities from both a price and relative strength perspective.  We provide a recap and outlook for global equity markets and highlight individual opportunities across various markets within the Health Care, Communications and Transportation sectors.

Global Strategy: Carnage Continuation Amid Turkey Turmoil and US Dollar Breakout

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 1H26 Result—Cash Levels Sky High

Sky TV (SKT) reported a solid 1H26 result, with its Sky Standalone business broadly in line with expectations, but Sky Free (previously Discovery...

Forsyth Barr

Sky TV 1H26: Switching Channels, HBO To Sky Free

In SKT’s November ASM update, it reiterated FY26 guidance but indicated softness in both Sky Free advertising revenue and Neon subscribers.

Forsyth Barr

Sky TV A New Cast For Next Season?

Given SKT’s existing deal and acquisition timing, the impact to FY26 for SKT is likely to be minimal, but FY27 and beyond have become slightly more...

Forsyth Barr

Sky TV More Time Left On The Clock

Sky TV (SKT) has performed well over the past year, but we still see the risk–reward as attractive. We believe SKT has a path to grow its dividend...

Forsyth Barr

Global Strategy: Carnage Continuation Amid Turkey Turmoil and US Dollar Breakout

Corrections across global ex-US markets continue to limit attractive investment opportunities from both a price and relative strength perspective. ...

Vermilion Research

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