Cause for optimism at Sky TV as it clears the decks and prepares for 2021, plus new report highlights climate change’s threat to the US financial system
Sky Television sounds an optimistic note about its future
After a torrid few years involving significant writedowns in the value of its business, declining subscriber numbers and the cancellation of multiple live sporting fixtures due to Covid, Sky Network Television offered a few hints that the worst might finally be behind the struggling broadcaster.
With predictions of smaller declines in revenue, a positive outlook for its streaming services as well as plans to enter the tightly contested retail broadband market with a bundled content offering there was plenty to give despondent shareholders cause for optimism.
The company reported a net loss of $146.3 million for the year to June, much of it due to $177.5 million of impairment charges as it wrote down $27.5 million in goodwill from RugbyPass and a further $150 million from its core business.
This compared with a $583.4 million loss in FY19, when it booked a $670 million charge on goodwill.
Sky now values its core goodwill at $245.3 million and RugbyPass at almost $11 million.
Annual revenue declined 6 percent to $747.6 million, which was at the top end of the company’s guidance, while pre-tax and depreciation earnings fell 20.2 percent to $164.2 million, in line with expectations.
Customer numbers rose 27 percent to 990,000, with streaming customers more than doubling to 404,000 as a result of the acquisitions of RugbyPass and Lightbox. And the churn rate of satellite subscribers shrank to 13 percent from 15 percent in the prior two years.
In recent years the broadcaster has faced a dramatic shift from linear television to on-demand streaming services such as Netflix and a growing number of global content players, particularly in sport, bypassing existing distribution networks.
Sky lifted its guidance for FY21, forecasting revenue of between $660 million and $700 million and ebitda of $125m-to-$140m. It had previously forecast revenue of $610m-to-$640m and ebitda of $100m-to-$130m.
The company said it intends to reinvest free cash through the June 2021 year and will reassess whether to resume paying dividends the following year.
After rallying more than 20 percent ahead of the announcement, Sky shares eased back to close at 14.8c, down almost 11 percent.
Capital raise take two for Asset Plus
Listed commercial property company Asset Plus has relaunched a capital raising to fund development of a new property in Albany. Its earlier attempt in March had to be cancelled due to the uncertainties around Covid. However, this time it is only seeking to raise $60.2 million compared with the $100 million it had previously sought.
The fully underwritten raise will be made up of a $12.1 million underwritten placement and a $48.1 million 1-for-1.01 accelerated non-renounceable entitlement offer.
Auckland Council will be the principal tenant in the new development and has taken a 15-year lease.
Shareholders will be asked to vote on the project at a special meeting on September 29 and to ratify the capital raising, which is being managed and underwritten by Jarden.
The original $100 million planned raising was to have been priced at 50 cents per share, when Asset Plus shares were trading at 58 cents at the time. They have since dropped to 36.5 cents, so the new offer is priced at 30 cents per share.
Sanford CEO to step down
After seven years as CEO of fishing company Sanford, Volker Kuntzsch has announced he is stepping down from the role.
Chair Rob McLeod said Kuntzsch’s last day will be September 18.
In the interim, chief operating officer Andre Gargiulo will be acting chief executive. The board said it would shortly commence an international search for a permanent replacement.
“As we now move towards a greater focus on consumer-driven innovation and marketing, Volker and the Sanford Board have agreed that now would be a sensible time for a new leader to drive the next phase of the strategy,” McLeod said.
It’s been a roller coaster ride for Sanford shareholders in recent years with its shares peaking above $8 in January this year but they have been impacted by Covid since then, closing yesterday at $5.80, down 2.5 percent.
Air New Zealand parks up Boeing 777 fleet
Air New Zealand’s fleet of Boeing 777 aircraft will remain grounded for at least the next 12 months as the airline admits the recovery of the international network looks to be slower than initially thought.
“The recent resurgence of cases in New Zealand is a reminder that this is a highly volatile situation. We are not anticipating a return to any 777 flying until September 2021 at the earliest, which is why we have made the decision to ground the fleet until at least this time next year,” chief operating officer Carrie Hurihanganui said.
In May, the airline grounded the majority of its seven 777-300 aircraft until the end of 2020. It also said it was unlikely to fly its eight 777-200 aircraft in the foreseeable future. They will be placed in long-term storage overseas.
Four 777-300 aircraft will be stored in Victorville in the Californian desert, while the airline’s 777-200 aircraft will be sent to long-term storage in both Roswell, New Mexico and Victorville from later this month.
The arid conditions and specialist storage facilities will keep the aircraft in a condition that will enable them to be returned to service within six-to-eight weeks, if required.
Climate change has the potential to cause chaos in the US financial system new report warns
A damning new report released in the US has warned the far-reaching consequences of climate change have the ability to create chaos in the financial system and severely disrupt the American economy.
The report by the US Commodity Futures Trading Commission, the first of its kind by a US government entity, calls for Congress to swiftly impose a price on carbon and urges financial regulators to “more urgently and decisively” work to understand and blunt the looming economic damage from climate change.
“Climate change poses a major risk to the stability of the U.S. financial system and to its ability to sustain the American economy,” the US Commodity Futures Trading Commission’s climate subcommittee warned.
The CFTC, which regulates some financial markets, is made up of three Republican and two Democratic commissioners. The climate change advisory committee includes representatives from banks, environmental groups, investors and a major oil company.
The report warns of potentially “serious financial system stress” that could hurt the US economy by limiting access to credit.
“Over time, if significant action is not taken to check rising global average temperatures,” the report said, “climate change impacts could impair the productive capacity of the economy and undermine its ability to generate employment, income, and opportunity.”
Environmental groups involved in the report stressed the urgent need for action.
Rental bargains galore in the Big Apple
There was a time when trying to find affordable rental accommodation in the city that famously never sleeps was notoriously difficult.
Now, it seems the situation has completely flipped.
The number of empty rental apartments in Manhattan has almost tripled compared with this time last year as more New Yorkers have abandoned the city in favour of more pandemic-friendly localities.
Last month, more than 15,000 rental apartments were empty in Manhattan, up from 5,600 a year ago, according to a new report on the state of New York’s inner-city rental market. The inventory of empty units is the largest ever recorded since data started being collected 14 years ago, the report said.
Analysts say the rental market is the best barometer of overall strength in Manhattan’s real estate market, since rentals account for 75 percent of apartments and that market reacts more quickly to demand changing than the sales market.
Experts say the migration from the city to the suburbs during the Covid-19 crisis has been fuelled in large part by Manhattan renters leaving the city.
“The rental market is weak and getting weaker,” the report’s authors said.
Hopes for a rebound anytime soon are looking increasingly unlikely. Although rental prices have come down — median rental prices fell 4 percent in August — the discounts are not steep enough yet to lure new renters back to the city. The average rental price for a two-bedroom apartment in Manhattan is still around US$4,750 a month.
Landlords are being forced to offer ever-larger incentives to try to entice renters, including offers of up to two months free rent.