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) 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.

<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

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: 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

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

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