Sky FY22: revenue up 3.5%, EBITDA $169m, dividends resume on $75m FCF

Annolyse's historical baseline classifies that growth as above the recent range (three-period mean 0.7%, range -2.1% to 2.4%), so this is a genuine inflection rather than a continuation of the recent trend.

EBITDA fell to NZ$169.0m from NZ$186.4m (-9.3%), but management discloses NZ$14.0m of one-off property-sale gains and other items, leaving adjusted EBITDA of NZ$153.7m. Pre-lease free cash flow rose to NZ$75.0m from NZ$56.1m, at the top of the supplied historical range (mean NZ$52.0m). Cash on hand jumped to NZ$138.9m from NZ$34.8m, taking net debt deeper negative to -NZ$137.1m. A 7.3 cents-per-share final dividend resumes distributions after a zero payout in FY21.

Pre-lease FCF of NZ$75.0m compares with a three-period mean of NZ$52.0m and a range of NZ$24.8m to NZ$75.0m. OCF/EBITDA improved to 70.8% from 57.5%, and capex fell to 6.1% of revenue from 7.2%. This matters because the resumed dividend is funded from a demonstrably stronger cash base, not from balance-sheet capacity alone.

Revenue growth is the first above-range print in the recent baseline. At 3.5%, growth sits 2.8 percentage points above the three-period mean and outside the prior range. Commentary attributes this to stabilisation in core Sky Box revenue and Streaming growth flagged at 34% in the HY22 release. The durability question is whether streaming momentum can offset continued Box attrition once one-off tailwinds fade.

Capital framework re-established with conservative settings. The payout ratio against NPAT is 20.5% and against pre-lease FCF is 17.0%, both below the historical means (51.5% and 41.4%). With net cash of NZ$137.1m and proceeds from the Mt Wellington property sale, the Board is reinvesting while initiating dividends rather than gearing up to pay them.

The HY22 context shows first-half revenue of NZ$371.7m, implying a roughly even seasonal split (50.5% in H1) and a second-half NPAT contribution of around NZ$33.9m versus H1's NZ$28.3m, so H2 carried slightly more earnings weight.

The release flags an "improved earnings outlook" qualitatively but does not quantify it. The gap between current cash generation and a 17.0% FCF payout ratio leaves substantial headroom for either reinvestment, dividend growth, or buybacks - which is what investors will need management to clarify.

PBT and NPAT growth optics are distorted by the NZ$14.0m property-sale gain in EBITDA and by base-period effects; the underlying adjusted EBITDA of NZ$153.7m is the more relevant comparator to FY21's NZ$186.4m, indicating roughly NZ$33m of underlying EBITDA decline despite revenue growth - a margin-compression signal worth tracking.

Working-capital movement of -NZ$139.5m sits above the historical range (three-period mean -NZ$161.5m of releases), meaning the absorption was less severe than prior years' pattern but still a meaningful drag. Despite this, OCF still grew to NZ$119.6m and FCF/NPAT conversion remained healthy at 120.6%. Debtor days improved to 16.8 from 18.7, at the lower edge of the historical range. Capex discipline (down 12.6% year-on-year) helped, though it raises the question of whether content and platform investment is being deferred. ROE of 12.6% is above the three-period mean of 9.0%, supported by lower capital intensity rather than margin expansion.

This briefing cannot assess management's quantitative earnings outlook or content-cost trajectory because no forward guidance or segment-margin disclosure is provided in the supplied excerpts.