Finance Finance News Sky TV tips profit to grow up to 13%

Sky TV tips profit to grow up to 13%

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Sky Network Television expects annual profit will rise as much as 13 per cent this financial year, and is preparing to ramp up its foray into mobile and web-based delivery with new products in the pipeline.

The Auckland-based pay-TV operator forecasts net profit of between $NZ145 million and $NZ155 million ($A127.85 million and $A136.67 million) in the 12 months ending June 30, 2014, up from $NZ137.2m in the 2013 financial year, chief executive John Fellet has told shareholders at Thursday’s annual meeting in Auckland.

Earnings before interest, tax, depreciation and amortisation are expected to be between $NZ355m and $NZ360m, broadly in line with a year earlier. Revenue is forecast to rise to between $NZ890m and $NZ900m, from $NZ885m in 2013.

The shares fell 4.9 per cent to $NZ6 in afternoon trading.

Chairman Peter Macourt said Sky TV was gearing up for the new assault on its grip on premium content from internet-service providers, after web-based Coliseum Sports Media won the live rights to air the English Premier League.

“As the quality of internet distribution improves, as it will with the rollout of ultrafast broadband, so does the number and depth of our competitors,” Mr Macourt said.

“iSKY already delivers video on demand and live streamed content, and Sky is embracing internet delivered content for the future.”

Sky TV expects to announce “significant developments” in web-based content delivery this financial year, and is developing new products aimed at providing content over tablet and mobile devices, he said.

The company is forecasting capital expenditure of between $NZ100m and $NZ120m in the 2014 financial year, up from $NZ82.4m in 2013.

Sky TV has appointed two new tech-savvy directors in Snakk Media founder Derek Handley and former SAP executive Geraldine McBride to beef up the board’s experience in mobile and software.

Mr Macourt said the Commerce Commission’s recent warning to Sky TV over allegedly anti-competitive clauses in its contracts with internet service providers was a “good and expected result” in that no further action was warranted.

“Sky believes that it has always acted in the best interests of the company and that it has complied with NZ law at all times,” he said.