The Sky Network Television Ltd (ASX: SKT) share price has sank in early morning trade following the release of the company's FY20 results to the market. At the time of writing, the Sky share price has retreated 9.38% to 14.5 cents. Let's take a look at what Sky achieved for the last financial year.
FY20 results
For the 12 months that ended on 30 June, Sky reported a mixed result although its performance was in line with the upper-end of its guidance range. Revenue declined 6% to NZ$747.6 million but with notable increases in its revenue streaming segment, jumping 35%
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) fell 28% to NZ$164.2 million.
On the company's bottom line, Sky reported a loss after tax of NZ$156.8 million that included a non-cash impairment of goodwill of NZ$177.5 million. Operating profit before the impairment stood at NZ$44.9 million.
Net cash from operating and investing activities came in at NZ$82.7 million. Sky advised that the solid financial position will allow it to navigate through any further COVID-19 uncertainty and deliver on strategy in FY21.
The board determined that no final dividend will be paid as the company intends to reinvest available cash flow during FY21.
COVID-19 response
Sky noted that strong engagement and viewership levels were recorded in its satellite and streaming services during the lockdown period. Access to news, shows, documentaries, movie and e-sports content kept customers informed and entertained.
In addition, the company took proactive steps to minimise its customer 'spin down' from sport packages that proved to be effective. The complimentary upgrades were well received, with only 8% of sport satellite customers downgrading their packages.
The return of premium live sport in May 2020 saw the previously downgraded packages renew their subscriptions in the final five weeks of FY20. As a result, Sky's sport segment saw double digit growth in May and June.
Commercial customers were heavily impacted by COVID-19 restrictions. However, the relaxing of domestic travel restrictions and faster than anticipated return of sport saw a return of normal billing for licenced customers from July.
Outlook
Moving into FY21, Sky provided a guidance of revenue in the range of NZ$660 – NZ$700 million. Furthermore, it anticipates EBITDA will be between NZ$125 – NZ$140 million and a net profit after tax of NZ$10 – NZ$20 million.
Sky announced its intention to enter the broadband market as it sees more customers watching content over broadband. The company is currently trailing its broadband service and is expected to expand to a group of customers before Christmas, followed by a full launch in 2021.
About the Sky share price
The Sky share price has been on a downhill trend for the last 6 years losing up to 98% of its value. Looking at the last 12 months, the Sky share price is up 26% from its 52-week low of 11.5 cents, but is down 74% from this time last year.
