Shares of New Zealand's pre-eminent pay-tv operator, Sky Network Television Ltd (ASX: SKT), have trended slightly lower in early afternoon trade today, following the announcement of its half-year profit result.
Reporting in New Zealand dollars, for the six months to 31 December 2014, Sky Network reported a net profit of $92.5 million, up 12.7% on the prior corresponding period, with revenues also increasing to $464.5 million, up 1.8%.
Revenues were pushed higher by a 3% jump in MY SKY subscribers and a healthy increase in average monthly revenue per residential subscriber.
During the period, Sky Network improved its cash period considerably, enabling its board to declare a 15 cents per share interim dividend, up from 14 cents per share in the prior corresponding period, payable on 17 March 2015.
Although CEO John Fellet put much of the improved financial result down to a 12.5% decrease in depreciation and amortization expenses, the company also experienced a 30.7% reduction in borrowing costs.
Mr Fellet said: "The most disappointing aspect of the six month result was the net loss of 8,707 subscribers." However the drop in subscribers between July and December is not uncommon, with the same trend having occurred in the previous two years.
Should you buy Sky Network shares?
At its current price of $5.50, shares in Sky Network are trading on a trailing dividend yield over 5% and a forward price-earnings ratio of just 12 times. Whilst concerns over competition from larger international rivals are ever-present, those looking for an investment which offers diversification away from Australia as well as a healthy dividend yield, could consider adding Sky Network shares to their portfolio.
