Sky Network Television Ltd: Time for some Stripping!

After the latest Sky Network Television Ltd [SKT.NZX] profit result current shareholders are in for an early Christmas present in the form of a hefty and very attractive (like the completely in context photo to your left)dividend.

SKT have had a very good 12 months to June 30 2011 and on top of their 10.5c regular dividend they are paying a special dividend of 25c as a bonus. If you are eligible for the tax credits this is just under 50c per share or an approx 8% return on the current share price of $5.80.

What I am surprised about is that the share price has been stagnant since the announcement last Friday given the hefty return this would give the average investor and the fact that one would be stretching to get a third of this return if they left their green stuff in the bank.

The company is likely to have a another good year for full year 2012 with revenue gleaned from increased Rugby World Cup subscriptions so either I am missing something or potential investors are asleep at their computers.

If you look at the SKT share price (see 1 year chart below) it has been trading around its current level since May and is up about 15% since January so the stock price has mirrored an overall increase in stock prices for that period so you couldn't really say its share price has left the realities of its fiscal performance for the previous 12 months.

Investors have until 7 September to qualify for the payout and will get the green stuff in their banks just a week latter.

I good move for you dividend strippers out there.


Sky Network Television @ Share Investor

Share Price Alert: Sky Network Television Ltd
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c Share Investor 2011

Share Price Alert: Sky Network Television Ltd

Sky Network Television Ltd [SKT.NZX] has been a major beneficiary of the strong NZ dollar over the last year or so and recently the dollar has been very strong vs the US dollar, the currency SKT buys its programming in, and the share price has responded in kind.

The share price has risen 13% since December 2010, around half of that over the last month or so, and its current share price as at 19 April 2011 of $5.75 looks fully valued based on recent results.

The current share price must be put in context of a 52 week high of $5.90c and a 52 week low of $4.51.

In order for the share price to break out of the 6 buck range the NZ dollar would have to sustainably push above the 80c mark against the US dollar and it is anyones guess whether that will happen.

If we focus on financial performance for the medium term things are looking good for the company, with new technology offerings giving Sky more reasons to extract additional revenue from current subscribers and also pull in new punters.

I couldn't have been more wrong back in April 2008 when I thought the company would come under pressure from new technology from competitors biting at the company's monopoly. SKT managed to grab the technology for themselves while potential competition has been left well and truly in the dust.

The combination of medium term revenue and profit increase looks good for the company but the impact of currency movements against SKT will clearly have a big impact on the bottomline.

Wait for a pullback from current prices if you are looking to buy.


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Watching Sky Television

A continued drop in share price for SKT, in the face of an historically high Kiwi dollar,
doesn't bode well for the company when the NZ dollar loses value.


Sports, The Sopranos, Coronation Street and Late Night with Letterman, my personal Fav-we all watch too much TV but is it a good investment?

On first glance Sky Television Network [SKT.NZX] looks like a great blue chip, with excellent prospects and good cashflow. They announced an excellent profit of just over $NZ 51 million for the half year to Dec 31 2007 which was up roughly 40% on the same period last year.

I would argue though that Sky could face an uncertain future, for a number of reasons.

The technology needed to keep the company updated and competitive is very expensive and will require much shareholder cash to do so. Sky need to continually update technology, because they will face intense competition in the future, from cheaper and better services from foreign lands sending their content to customers in New Zealand, through broadband pipes that look set to get bigger from this year.

Another large problem Sky face is the cost of programming.

Currently the Kiwi exchange rate vs the US dollar, where the bulk of Sky programming is purchased, is at near post float highs and has been unusually high for a couple of years.

This is unlikely to continue, as historically the NZ dollar averages below 60c to the US dollar.

Like other shares listed on the NZX, the price of SKT has been hit badly, down to $4.90 currently but off from an all time high of above $6.50 just over 2 years ago.

The share price really should be doing alot better considering the historically high NZ/US dollar cross.

Further weakness in share price will clearly be the order of the day when the NZ dollar falls.

The company is in a dominant position at present in the pay TV market, it is the only player, but its customer satisfaction isn't good, as they use their monopoly position to excuse weak customer care.

Something that monopolies like Telecom NZ Ltd [TEL.NZX], and Auckland International Airport Ltd[AIA.NZX] also suffer from.

Sky Television management need to be a bit more savvy in their outlook to the competition that is out there.

With the internet and mobile technology playing an ever increasing influence in the war for consumers eyeballs, their attitude to that technology and a better attention to customer service and satisfaction will help them counter their competition.

The jury however, is still out over whether they can achieve that.

Disc: I own AIA shares in the Share Investor Portfolio


Sky Network Television @ Share Investor

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Watching Sky Television
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