Table of Contents
What changed
Revenue rose 1.7% to NZ$766.7m and operating cash flow jumped 18.9% to NZ$139.1m, but every reported earnings line moved the other way: EBITDA of NZ$153.0m was down 2.2% versus the NZ$156.4m underlying comparative, PBT fell 3.1% to NZ$68.7m and NPAT declined 3.5% to NZ$49.0m. Capex stepped up to NZ$82.9m (10.8% of revenue, from 9.5%), and company-stated free cash flow still rose 43.2% to NZ$23.7m. Cash on hand fell to NZ$37.8m from NZ$56.1m while gross borrowings were effectively extinguished, leaving Sky in a net cash position of roughly NZ$37.8m. A final dividend of 12 cps was declared, taking the full-year dividend to 19 cps (up 26.7%) versus the 12 cps final alone (up 33.3%).
What matters
- H2 earnings rolled over. HY24 NPAT of NZ$28.8m was up 10.6% and accounted for 58.9% of the full-year result, implying H2 NPAT of only ~NZ$20.1m. Against an H1 that grew double-digits, full-year NPAT still fell 3.5% — H2 earnings were materially weaker year on year even as H2 revenue held up (H1 was only 51.2% of full-year revenue).
- Cash conversion improved, but the FCF bridge is tight. OCF-to-EBITDA lifted to 90.9% from 74.9%, partly helped by a NZ$9.2m (6.8%) inventory drawdown. However, reported FCF of NZ$23.7m is well below OCF less capex of ~NZ$56.2m, implying significant lease, interest or other outflows consume around NZ$32m of cash not captured in the headline bridge.
- Capital return is being stretched relative to FCF. The 19 cps full-year dividend absorbs ~80% of company-stated FCF and ~39% of NPAT (up from ~30% a year ago), at the same time as capex intensity has risen.
Expectations
Management states FY24 metrics were delivered within previously provided guidance ranges, and no new quantified FY25 or medium-term target is disclosed in the supplied excerpts. With no forward-work or target shape to benchmark against, the main read-through is internal: the second-half run-rate exited the year softer than the full-year average on earnings, which sets a lower jump-off for FY25 than the headline full-year numbers suggest in isolation.
Quality of result
The operating cash step-up is the strongest element of the result, but it is flattered by working-capital help — inventory days fell to 59.8 from 65.2, while receivable days lengthened modestly to 17.3 from 15.9. Stripping the inventory release, underlying cash conversion would look less dramatic. The earnings picture itself is not distorted by tax (effective rate 28.4% vs 28.1%) or by any disclosed discontinued operation, so the 3.1% PBT decline is a clean read on operating performance. The NZ$23.7m free cash flow figure is company-defined and the supplied excerpts do not provide a full reconciliation from OCF and capex to that number, so the durability of the 43.2% FCF growth is harder to assess than the OCF growth.
Quality of result (balance sheet)
Leverage is a genuine strength: net cash of ~NZ$37.8m, equity up 1.9% to NZ$448.9m, and total liabilities down 6.9%. ROE, however, softened to 10.9% from 11.5% as the equity base grew while NPAT fell.
Unresolved
- What specifically drove the H2 earnings softness — programming cost phasing, one-time H1 items, or underlying margin erosion?
- The full reconciliation between OCF less capex (~NZ$56.2m) and the stated NZ$23.7m FCF is not in the supplied excerpts, so the sustainability of the FCF line and its coverage of the lifted dividend cannot be fully tested.
- No segment data was supplied, so the mix shift between Sky Box, Streaming, Commercial and Broadband cannot be examined.
- No quantified FY25 guidance or medium-term target was provided.
This briefing cannot assess management's forward earnings trajectory, segment-level profitability, or whether the elevated capex program will translate into ARPU or subscriber gains in FY25.
Key metrics
| Metric | FY24 | FY23 | Change |
|---|---|---|---|
| Revenue | $766.7m | $754.1m | +1.7% ↑ |
| EBITDA | $153m | $156.4m | -2.2% ↓ |
| Net profit after tax | $49.0m | $50.8m | -3.5% ↓ |
| Net cash inflow from operating activities | $139.1m | $117.0m | +18.9% ↑ |
| Final dividend per share | 12.0c | 9.0c | +33.3% ↑ |
| Cash and cash equivalents | $37.8m | $56.1m | -32.6% ↓ |
| Total assets | $681.4m | $690.2m | -1.3% ↓ |
Analytical metrics
| Metric | FY24 | FY23 | Context |
|---|---|---|---|
| PBT growth | -3.1% | — | — |
| Effective tax rate | 28.4% | 28.1% | — |
| OCF / EBITDA (cash conversion) | 90.9% | 74.8% | stable |
| FCF pre-lease | $23.7m | — | — |
| FCF / NPAT | 48.4% | — | complementary conversion metric |
| Capex % revenue | 10.8% | 9.5% | — |
| Capex | $82.9m | −$71.4m | +$154.3m |
| Free cash flow | $23.7m | — | — |
| Debtor days | 17.3 | 15.9 | +1.4 days |
| Inventory days | 59.8 | 65.2 | -5.5 days |
| Trade debtors | $36.4m | $32.8m | +$3.6m |
| Net debt | −$37.8m | −$55.3m | +$17.5m |
| Net debt / EBITDA | -0.25x | -0.35x | Strengthening |
| Gross borrowings | $0.0m | $0.8m | −$0.7m |
| Payout ratio vs NPAT | 38.8% | — | — |
| Payout ratio vs FCF pre-lease | 80.2% | — | covered |
| ROE (annualised) | 10.9% | 11.5% | Weakening |
| HY24 share of FY24 revenue | 51.2% | — | Other half was 48.8% |
| HY24 share of FY24 EBITDA | 53.4% | — | Other half was 46.6% |
| HY24 share of FY24 NPAT | 58.9% | — | Other half was 41.1% |
| Profit from continuing operations | $49.0m | $50.8m | −$1.8m |
This analysis was generated using Annolyse, an AI-powered tool that analyses NZX company announcements. The analysis is based on available company filings and standard Annolyse calculations. This is general information only and does not constitute financial advice. The analysis may contain errors. Always read the original company filings and consult a licensed financial adviser before making investment decisions.