Advanced Television

All eyes on Sky Deutschland results

February 3, 2014

Sky Deutschland will reveal its full-year numbers (to December 31st) on February 6th.  The market is looking for some good news as a balance to a major slide in the broadcaster’s share price over the past 5 weeks. (On December 23rd its price was €8.13. At the close on January 31st shares were priced at €6.64).

Investment banker Morgan Stanley, in a note to clients on January 31st, stated “We think [the results] will be critical for the short-term performance of the shares that Sky Deutschland reiterates its optimism on 2014 at this stage.”

The bank identifies the potential good news, listing five items:

(i) Sky Deutschland is likely to reiterate its confidence that FY2014 subscriber growth will exceed 400k, albeit boosted by 80,000 adds from DT’s Ligatotal

(ii) Sky Deutschland is also likely to be positive on underlying growth trends given that the measures taken in 2013 (ending outbound telesales, reducing discounts, shifting customers onto two-year contracts) are likely to reduce churn and boost ARPU.

(iii) We expect Sky Deutschland to confirm that the focus in 2014 will be more on subscriber growth than on subscriber quality improvement,

(iv) We expect the company to reiterate that it expects to get separate funding for the Plaza deal and that it should remain within its bank facilities,

(v) We observe that Fox owns 54.5 per cent of the equity but is not obliged to disclose movements in its holding until it exceeds 75 per cent or publishes its 20-F. (The USA’s SEC document that must be completed by foreign-based companies where they have shares for sale in the US).

As to hard numbers the bank is anticipating Sky Deutschland to grow subscriptions by 135,000 in Q4, with revenues of €407 million, annualised Churn of 12.2 per cent and monthly ARPU of €34.50.

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