Table of Contents
What changed
Revenue declined 2.0% to NZ$384.8m from NZ$392.7m. The earnings line moved far more sharply: reported EBITDA fell to NZ$43.2m from NZ$81.7m, PBT swung from NZ$40.4m to a NZ$2.4m loss, and NPAT moved from NZ$28.8m profit to a NZ$2.0m loss. Operating cash flow was essentially flat at NZ$62.7m (versus NZ$62.9m), capex was broadly unchanged at NZ$40.8m, and reported free cash flow was NZ$7.5m. Cash on hand fell to NZ$27.8m from NZ$47.4m, though the group remains in a small net cash position. The interim dividend was lifted 21.4% to 8.5 cents per share.
What matters
- The earnings collapse is disproportionate to the revenue move. A 2.0% revenue decline produced an approximately 47% fall in reported EBITDA and a swing to loss. Management attributes this to one-off items it describes as "largely non-cash or expected to be cash neutral," and notes programming costs are first-half weighted and reverse in H2. The detailed bridge was not extracted, so the underlying operating trajectory cannot be cleanly isolated from the headline.
- Cash generation has held up far better than the P&L. OCF was stable at NZ$62.7m, working capital discipline improved (receivable days 4.7 vs 16.9; inventory days 31.6 vs 55.7), and the OCF-to-EBITDA ratio rose to 145% (from 77%) — though that ratio is inflated by the depressed EBITDA denominator rather than improved underlying conversion.
- Capital return was lifted against a loss. The 8.5cps interim is covered by pre-lease FCF of NZ$22.0m (payout ratio 53.4%) but not by the company-defined NZ$7.5m FCF measure. Sky has explicitly framed the dividend as protected from the one-offs, effectively decoupling it from reported NPAT.
Expectations
No quantitative FY25 guidance or forward-work figure was disclosed in the extracted materials. Shape context from FY24 shows the first half historically carried 51.2% of revenue, 53.4% of EBITDA and 58.9% of NPAT, so a flat or slightly H2-weighted pattern is the prior-year base. Management has stated programming costs reverse in H2, which mechanically supports a stronger second-half earnings shape. Annualised HY25 revenue of NZ$769.5m sits marginally above the FY24 anchor of NZ$766.7m, suggesting a broadly flat top-line run-rate rather than structural decline. The release does not provide the underlying earnings bridge needed to judge whether the second-half reversal will restore FY24-level profitability.
Quality of result
The reported earnings figures look significantly timing- and one-off-distorted rather than a clean operating read. Supporting that interpretation: OCF was essentially unchanged despite NPAT swinging by roughly NZ$30.8m; the effective tax rate was normal at ~28% in both periods, so tax is not the distortion; and working capital tightened rather than flattered the cash line. However, the company-defined FCF of NZ$7.5m is well below pre-lease FCF of NZ$22.0m, indicating additional cash outflows that the extracted data does not bridge. Gross borrowings fell to NZ$0.285m (overdraft only) from NZ$0.576m, but the NZ$19.6m decline in cash balances is the more substantive balance-sheet movement and warrants scrutiny alongside the NZ$40.8m capex spend. The increased dividend against a reported loss is a policy choice rather than an earnings-quality signal.
Unresolved
- What are the specific one-off items, their quantum, and the split between non-cash and cash-neutral elements?
- What is the underlying (ex-one-off) EBITDA that management is implying, and how does it compare to HY24's NZ$81.7m?
- What accounts for the gap between pre-lease FCF of NZ$22.0m and reported FCF of NZ$7.5m?
- With cash down NZ$19.6m half-on-half and the dividend being lifted, what is the expected H2 cash trajectory, particularly given stated project deferrals?
- Is FY25 still tracking to the FY24 dividend level of 19cps, or does the higher interim imply a different full-year shape?
This briefing cannot assess the underlying (ex-one-off) earnings run-rate or the detailed composition of the reported one-off items, as the adjustment bridge was not extracted.
Key metrics
| Metric | HY25 | HY24 | Change |
|---|---|---|---|
| Revenue | $384.8m | $392.7b | -99.9% ↓ |
| EBITDA | $43.2m | $81.7b | -99.9% ↓ |
| Net profit after tax | −$2.0m | $28.8b | -100.0% ↓ |
| Net cash inflow from operating activities | $62.7m | $62.9b | -99.9% ↓ |
| Interim dividend per share | 8.5c | 7.0c | +21.4% ↑ |
| Profit before tax | −$2.4m | $40.4b | -100.0% ↓ |
| Cash and cash equivalents | $27.8m | $47.4m | -41.4% ↓ |
| Total assets | $625.9m | $667.4b | -99.9% ↓ |
Analytical metrics
| Metric | HY25 | HY24 | Context |
|---|---|---|---|
| Effective tax rate | n/m (loss period) | 28.4% | current loss period |
| OCF / EBITDA (cash conversion) | 145.2% | 77.0% | stable |
| FCF pre-lease | $22.0m | $21.5m | +$0.5m |
| FCF post-lease | $7.5m | — | — |
| FCF / NPAT | n/m | 74.4% | complementary conversion metric |
| Capex % revenue | 10.6% | 10.5% | — |
| Capex | $40.8m | $41.4m | −$0.6m |
| Free cash flow | $7.5m | — | — |
| Debtor days | 4.7 | 16.9 | -12.2 days |
| Inventory days | 31.6 | 55.7 | -24.1 days |
| Trade debtors | $10.0m | $777.0m | −$767.0m |
| Net debt | −$27.5m | −$47.3m | +$19.9m |
| Net debt / EBITDA | -0.64x | -0.58x | Strengthening |
| Gross borrowings | $285.0m | $576.0m | −$291.0m |
| Payout ratio vs FCF pre-lease | 53.4% | — | covered |
| ROE (annualised) | -0.9% | 12.9% | 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 | — | $29.0m | — |
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.