Strong Showing from Sky TV on Lower Expense Growth, Strong Cash Flow Provides Dividend Upside

Sky Network Television reported solid results for fiscal 2014 helped by falling operating expenditure and lower depreciation and interest expense. Underlying net profit after tax, or NPAT, lifted 25.8% to NZD 166 million. NPAT was about NZD 8 million above our expectation, mainly as a result of programming costs which were 31% of sales versus our expectation of 32%. The company benefited from a strengthening New Zealand dollar as the vast majority of programs are imported.