Table of Contents
What changed
Revenue grew 3.7% to $392.7m and EBITDA rose 10.9% to $81.7m, so earnings scaled roughly three times revenue. PBT was up 9.0% to $40.4m and NPAT up 10.6% to $28.8m, with a slightly lower effective tax rate (28.4% vs 29.4%) adding a small tailwind. Operating cash flow rose 12.1% to $62.9m and capex was broadly stable at $41.4m, lifting pre-lease free cash flow to $21.5m from $16.0m. The interim dividend was raised to 7.0 cps (from 6.0 cps) and FY24 full-year dividend guidance was increased to at least 17.5 cps, from at least 15.0 cps.
Balance sheet movements are more mixed than the P&L: cash fell to $47.4m from $56.6m, inventories (programme rights) dropped 9.1% to $120.1m, total liabilities were down 13.6%, and equity rose 5.2% to $448.7m. The disclosed gross borrowings figure dropped sharply to $0.6m from $1.4m, but both numbers refer only to bank overdrafts set off against cash rather than term debt.
What matters
- Operating leverage is showing through. EBITDA growth (10.9%) meaningfully outpacing revenue growth (3.7%) is the central read: costs were contained while Sky Sport Now and Advertising drove the top line. ROE edged up to 6.4% from 6.1%.
- Cash generation is the real story behind the dividend upgrade. OCF/EBITDA conversion held at 77.0% and pre-lease FCF jumped 34.6% year-on-year. That lifts FCF coverage of the interim dividend meaningfully (payout vs pre-lease FCF fell to 46.8% from 63.3%), giving the ≥17.5 cps full-year commitment tangible cover.
- Programme-rights inventory fell $12.1m. This flatters operating cash flow via working capital release. It is a legitimate source of cash but not an indefinitely repeatable one, and it complicates reading the 12.1% OCF growth as pure trading strength.
Expectations
No revenue or earnings guidance numbers were supplied, so the only stated target is the newly raised FY24 dividend floor of 17.5 cps. Against that, the 7.0 cps interim implies ≥10.5 cps final, which the current pre-lease FCF run-rate ($21.5m half-year) would cover comfortably on payout-ratio math.
On shape, FY23 was front-half weighted on revenue (HY23 = 50.2% of FY23) and NPAT (51.4%) but second-half weighted on EBITDA (HY23 = 47.1% of FY23). If HY24 EBITDA of $81.7m tracks that same seasonality, a full-year EBITDA ahead of FY23's $156.4m is plausible, though the release does not commit to it. Annualised HY24 revenue of $785.4m sits about 4.1% above FY23's $754.1m.
Quality of result
The earnings improvement looks largely operational: EBITDA growth is backed by similar-magnitude PBT growth (9.0%), there is no tax distortion, and no material one-offs are quantified in the excerpts. That is a reasonably clean read.
Two caveats. First, the $12.1m reduction in programme-rights inventory contributed to working-capital release and therefore to the 12.1% OCF uplift; underlying cash conversion is strong but not as strong as the headline growth implies. Second, EBITDA is disclosed as adjusted for one-offs without a reconciliation in the supplied data, so the gap between reported and adjusted EBITDA is not visible here. Trade receivables were flat and receivable days are immaterial, so there is no sign of revenue being pulled forward on debtor terms.
Unresolved
- What specific items are being adjusted out of the $81.7m EBITDA figure, and how large are they?
- Is the $12.1m fall in programme-rights inventory a phasing effect or a structural step-down, and how does it interact with content commitments in H2?
- With cash down $9.2m half-on-half despite stronger FCF, what was the distribution/buyback spend in the period and what is the remaining buyback capacity?
- No term debt, lease liability detail, forward content commitments, subscriber KPIs, or segment revenue split were provided, so the durability of the Sky Sport Now and Advertising-led growth cannot be tested here.
This briefing cannot assess subscriber trends, segment-level margins, content cost commitments, or valuation, because those disclosures were not included in the supplied materials.
Key metrics
| Metric | HY24 | HY23 | Change |
|---|---|---|---|
| Revenue | $392.7m | $378.6m | +3.7% ↑ |
| EBITDA | $81700m | $73700m | +10.9% ↑ |
| Net profit after tax | $28.8m | $26.1m | +10.6% ↑ |
| Net cash inflow from operating activities | $62.9m | $56.1m | +12.1% ↑ |
| Interim dividend per share | 7.0c | 6.0c | +16.7% ↑ |
| Cash and cash equivalents | $47.4m | $56.6m | -16.3% ↓ |
| Total assets | $667.4m | $679.3m | -1.8% ↓ |
Reference: annolyse.ai/briefings/skt-hy24
Analytical metrics
| Metric | HY24 | HY23 | Context |
|---|---|---|---|
| PBT growth | +9.0% | — | — |
| Effective tax rate | 28.4% | 29.4% | — |
| OCF / EBITDA (cash conversion) | 77.0% | 76.1% | stable |
| FCF pre-lease | $21.5m | $16.0m | +$5.5m |
| FCF / NPAT | 74.5% | 61.2% | complementary conversion metric |
| Capex % revenue | 10.5% | 10.6% | — |
| Capex | $41.4m | −$40.2m | +$81.6m |
| Debtor days | 0.4 | 0.4 | -0.0 days |
| Inventory days | 55.7 | 63.6 | -7.9 days |
| Operating working capital | $120.9m | $133.0m | −$12.1m absorbed |
| Trade debtors | $777.0m | $777.0m | +$0.0m |
| Net debt | −$46.8m | −$55.2m | +$8.4m |
| Net debt / EBITDA | -0.57x | -0.75x | Weakening |
| Gross borrowings | $576.0m | $1419.0m | −$843.0m |
| Payout ratio vs NPAT | 34.9% | — | — |
| Payout ratio vs FCF pre-lease | 46.8% | — | covered |
| ROE (annualised) | 6.4% | 6.1% | Strengthening |
| HY23 share of FY23 revenue | 50.2% | — | Other half was 49.8% |
| HY23 share of FY23 EBITDA | 47.1% | — | Other half was 52.9% |
| HY23 share of FY23 NPAT | 51.4% | — | Other half was 48.6% |
| Profit from continuing operations | $29.0m | $26.1m | +$2.9m |
Reference: annolyse.ai/briefings/skt-hy24
This analysis was generated using Annolyse, an AI-powered tool that extracts and analyses NZX company announcements. The underlying data is extracted from official company filings and verified against source documents. 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.