Sky TV is looking to boost revenue and customer numbers with the development of revenue sharing with partners and the introduction of a new Sky box.
Photo: Supplied / Richard Parsonson
In a presentation to investors, the pay TV company said technology was transforming its business, with 86 percent of its system in the cloud.
Sky TV's investment is focused on software for such things as data analytics.
The introduction of the upgraded Sky box follows a few months of customer testing.
The box was easier to use, with a voice enabled remote control, and could be bundled with other content services and apps, the company said.
The new boxes are expected to be in homes by the middle of next year, with a customer target of 150,000 to 200,000 by the end of 2024.
The company hopes the investment in new boxes will help it stabilise customer numbers and revenue streams over the next two to three years.
Sky expects investment in the new boxes will fall within 7 to 9 percent of its capital investment envelope.
Streaming is expected to boost revenue, but at a more modest rate than in recent years, while other revenue, such as advertising, is expected to return to pre-Covid levels.
Low share price bringing unsolicited approaches
Sky also said potential takeover offers or partnerships have been put to the company because of its low share price.
Chief executive Sophie Maloney said the company had been challenged by big changes in digital entertainment and media, which had increased the cost of obtaining broadcasting rights.
However, she said the company was meeting those challenges.
"I do not believe the current share price correctly reflects the underlying value of the company, and it is in that context that I note that over the course of the year Sky has received a number of unsolicited approaches around potential transactions, all of which have been highly conditional and incomplete."
She said the company was open to partnering, but the board was yet to receive any formal offer.
"Naturally, we're open to strategic partnerships that do create shareholder value. And as such, we've appointed [brokerage firm] Jarden to review any such approaches.
"There is no guarantee that any approach will lead to a formal proposal, or in fact, to any transaction, but we are open to opportunities for a partnership that will secure further value uplift for our shareholders."
Sky TV confirmed it expected to be meet or slightly exceed the top end of its net profit guidance for the year ended in June, which was between $37.5 - $45.0 million.
The share price was trading about 17 cents a share early this afternoon.
Photo: Supplied / Richard Parsonson
It expected revenue to be between $695 million and $715m this year, down from $747.6m last year.
The company made a net loss of $157m in the year ended June 2020, but was expecting a net profit of $37.5m to $45.0m this year.
Sky plans to cut non-programming operations by $15m a year, with expected savings of at least $10m to $15m by 2024.
The company has locked in key programming costs for the next two to three years. This is expected to peak by 2024, before settling back to 45 to 50 percent of revenue.