Sky shares jump as profit guidance hiked, rugby deal clawed back

• Author: Chris Keall
• Published date: 08 December 2021
• Publication title: Daily Post, The (Rotorua, New Zealand)

Shares jumped 20 per cent from $1.75 to $2.10 in early trading.

Corporate affairs head Chris Major told the Herald, “Rugby is one of the one-off cost savings associated with negotiated equitable reductions in rights costs due to Covid-related cancellations and postponements during the calendar year. It’s not a ‘renegotiation’ of the deal, but just part of the contractual arrangement. We’re not disclosing the split.”

In a statement to the NZX, Sky said it had, “negotiated reductions in rights costs and production savings across a number of sports”.

Beyond rugby sports involved in the cost-cutting process included Supercars, World Surf Champs, World Rugby Sevens, ISPS Handa Auckland football, but Major said “the sport clawback is only a small part of the picture, which fell under $9m in one-off savings. Total savings were $40m-$45m, many of which were recurring.”

The pay-TV broadcaster previously forecast a net profit of $17.5 million- $27.5m. Now it says NPAT will be between $40m and $48m.

Its ebitda guidance has been upped from a band of $115m-$130m to $150m-$160m.

Full revenue is now put at $725m to $745m, a nudge up from the previous $715m to $725m.

In an investor update, Sky said the increased profit guidance was driven by a “robust review” of its costs that it estimates will “deliver $40m-$45m of additional savings in FY2022. It says $26m of those savings are recurring, with the balance one-offs.

The exercise included “negotiated reductions in rights costs and production costs across a number...