FY24 capex nearly doubled and cash fell 32% with dividend at 71% of FCF

The economically more important shift sat below the P&L. Capex roughly doubled to $82.9m (FY23: $42.0m), cash and equivalents dropped 32.1% to $37.8m, and the closing balance sheet now carries materially less liquidity than it did a year ago.

Operating cash flow grew 18.8% to $139.1m, which lifted cash conversion (OCF/EBITDA) to 90.9% from 78.7%, and free cash flow reached $23.7m (FY23: $16.5m). Sky declared a final dividend of 12.0 cents, taking the full-year payout to 19.0 cents (FY23: 15.0 cents), with FY25 guidance of at least 21.0 cents.

Capex of $82.9m absorbed most of the OCF gain and drove a $18.3m drawdown in cash. EBITDA grew only $4.3m on that spend, so the case for higher reinvestment depends on benefits not yet visible in this result. This matters because the capex-to-cash gap, not the income statement, is what reshaped the balance sheet.

Earnings quality improved at the cash line but weakened below EBITDA. Higher depreciation and amortisation flowing from prior investment is the most natural read of why EBITDA rose 2.9% while NPAT fell 3.5%; the effective tax rate barely moved (27.5% vs 28.2%). This matters because the operating trajectory is more flattering than reported NPAT, but only if the capex cycle delivers EBITDA leverage in FY25-FY26.

Capital allocation tightened around a thinner cushion. The full-year dividend rose to 19.0 cents and management cites a 71% payout of free cash flow, with FY25 guidance moving higher again to at least 21.0 cents. With cash already down a third and capex elevated, dividend coverage by FCF is genuine but narrow, leaving limited absorbency for any operating disappointment.

H1 contributed 51.2% of full-year revenue, 53.4% of EBITDA, and 58.9% of NPAT, meaning the second half stepped down on profit despite roughly comparable revenue — implied H2 NPAT of about $20.1m versus H1's $28.8m. That shape sits uneasily against the higher FY25 dividend trajectory.

The release does not provide segment-level prior-year figures or a quantified capex outlook, so this briefing cannot judge whether the FY24 investment is a single-year peak or the start of a sustained higher run-rate. That distinction is what investors most need to size FY25 free cash flow against the lifted dividend.

However, FCF of $23.7m, while 43% higher than FY23's $16.5m, is small relative to the $19.0c full-year distribution; the 71% FCF payout indicated by the company leaves little room.

Below the EBITDA line, the result looks less durable. NPAT compression appears driven by higher depreciation tied to the doubled capex, and ROE eased to 10.9% from 11.5%. The H2 step-down in NPAT — without an accompanying revenue collapse — points to either margin pressure or rising D&A weight that will persist into FY25 unless capex normalises. The operating story is therefore better than the NPAT line suggests, but the balance-sheet story is meaningfully tighter than a year ago.

This briefing cannot assess underlying segment profitability, prior-year segment comparisons, or forward capex intent because the supplied data does not include those breakdowns.