Sky's Discovery NZ acquisition lifts EBITDA 28.8% and FCF to NZ$87.1m

Because the prior comparable does not include the acquired business, every top-of-P&L growth comparison carries a basis-change caveat.

Within that frame, EBITDA rose to NZ$78.2m from NZ$60.7m, a NZ$17.5m uplift (+28.8%). Profit before tax swung to NZ$57.7m from a NZ$2.4m loss, and net profit after tax to NZ$52.2m from a NZ$1.9m loss; both growth rates are suppressed in this briefing because the prior near-zero base produces an implausible outlier and reflects a structural basis shift rather than underlying earnings momentum.

Operating cash flow grew to NZ$99.0m from NZ$62.7m, capex fell to NZ$26.4m from NZ$40.8m, and pre-lease free cash flow reached NZ$87.1m versus NZ$7.5m. The interim dividend was declared at 15.0 cps, up from 8.5 cps.

EBITDA, revenue, PBT, NPAT and total assets all sit at or near supplied historical highs, but the underlying business has changed shape because of the Discovery NZ deal. This means the most-cited headlines — revenue +7.7% and PBT/NPAT swinging from losses to profit — overstate organic momentum, and the cleaner operating read is the EBITDA dollar uplift of NZ$17.5m, of which management attributes a meaningful share to the acquired free-to-air business plus lower programming costs.

Free cash flow is the standout, but the cash-conversion ratio is flagged. Pre-lease FCF of NZ$87.1m sits well outside Annolyse's historical baseline (mean NZ$21.7m, range NZ$6.8m–NZ$56.4m), driven by both higher OCF and a NZ$14.4m capex reduction (capex/revenue 6.4% versus 10.6% prior). The OCF/EBITDA ratio is caveated for the same basis change, so the conversion strength should be read as a dollar outcome, not a sustainable ratio.

The interim dividend stepped up sharply, but this is only the interim component. At 15.0 cps the half-year payment is 6.5 cps above HY25 and, per Sky's own commentary, represents roughly half of the full-year dividend guidance — implying a materially higher full-year distribution than FY25, though the full-year figure is not supplied here.

Sky's own release positions the 15.0 cps interim as approximately a 50% payout of full-year dividend guidance, which sets an implied full-year distribution in the order of 30 cps but is not a numeric target this briefing can verify.

Prior-period commentary noted that programming costs are heavily weighted to the first half and reverse in H2; the EBITDA shape can therefore be expected to look different in the second half, and the unusually low capex ratio bears watching for timing reversal. Without forward work or guidance fields in the structured data, the release supports a direction-of-travel read but not a quantified H2 expectation.

That argues the cash result is not a working-capital release.

Two qualifications temper durability. First, capex fell by NZ$14.4m (-35.3%) half-on-half; some of that gap likely reflects integration timing rather than a permanent step-down in maintenance spend, and the FCF figure flatters accordingly. Second, EBITDA margin at 18.9% is within the supplied historical range (mean 18.7%), so the EBITDA dollar uplift is principally a base-broadening effect from the acquisition rather than margin expansion in the legacy business. Total liabilities also expanded 42.6% to NZ$267.9m, and gross borrowings and net debt are not disclosed in this dataset, leaving the post-deal leverage picture incomplete.

This briefing cannot assess organic versus acquired contribution to revenue, EBITDA and cash flow, because segment-level and acquisition-contribution disclosures were not provided in the structured data.