The Sky Network Television Limited (ASX: SKT) is flying higher, up 12.13% to $1.895 per share.
Below we take a look at the New Zealand satellite pay-TV provider's guidance update for the 2022 financial year (FY22) that looks to be driving ASX investor interest.
What guidance update was provided for FY22?
The Sky Network share price is heading skywards after the company raised its guidance for FY22. The midpoint guidance for earnings before interest, taxes, depreciation and amortisation (EBITDA) improved by 27% while net profit after tax (NPAT) was raised by 96%.
The improved guidance comes following what Sky labelled a "rigorous cost review and consideration" by its Board.
The review saw operating cost estimates slashed by $35 million, with $9 million of one-off savings and $26 million in recurring savings.
With costs revised down, Sky Network increased its EBITDA guidance from $115–130 million up to $150–160 million. It raised NPAT guidance from the previously announced $17.5–27.5 million up to $40–48 million.
The Sky Network share price could also be getting a lift from the company's bullish longer-term outlook, with Sky targeting additional recurring savings in FY23 "and beyond" via other transformative initiatives.
The company said that the sale of its Mt Wellington properties was not included in the guidance. While this is progressing, the terms have yet to be finalised.
Commenting on the revised guidance, Sky Network's CEO Sophie Moloney said:
Our firm strategic focus is on growing revenues and reducing operating costs, particularly against the background of the step-up in rights costs to secure the sports and entertainment content that matters to our customers. We've sought to uncover opportunities that are starting to reset Sky's cost base, leveraging the learnings from operating in a Covid-impacted environment as well as challenging the way we operate our business across every area of spend.
Sky Network share price snapshot
The Sky Network share price is up 22% since this time last year, outpacing the 10% gains posted by the All Ordinaries Index (ASX: XAO) during that same period.
Over the past month, Sky Network's shares have gained 5%.
