Wouldnt mind a merger with NZME, especially if we kept their board and ditched ours?
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$2.58 BABY!
WHOOOOO!!!
In the comments section Paul Hughes describes an alternative to on market buyback.
It’s the same alternative that I propose Sky should do.
It is quicker than a buyback and puts money in the pockets of shareholders tax free while also achieving the goal of reducing shares outstanding.
Grabbed a few more shares for my son today.
He now has ~2,400 shares.
Is he going to hit pay dirt soon with Sky and have a big chunk of his tertiary fees paid for by the age of 2?
NZME release digital strategy: https://www.nzx.com/announcements/383041
They have declared a 3c divvy for the HY which is ~$6M.
Their dividend guidance (take note Sky! You can actually provide guidance on these things!) is a total of $8M-$14M. I think they will probably end up doing another 3c divvy at the FY, taking the total divvy to around $12M.
Anyway, NZME (a business that is much smaller than Sky in terms of Earning Power) now has a market cap of $263M - only $53M less than Sky TV!!
Why would this be? Well they are generating tangible returns for their shareholders after paying down debt and investing in their paltforms. Investors have confidence in the management and Board to the extent that the quoted value of NZME is based on a 3.133% yield.
3.133% of 263M is ~$8M! So the market is being conservative with NZME and have valued it on the assumption it meets the lower end of dividend guidance! And it still has a healthy market cap relative to Sky.
That being the case, if Sky gave guidance to only pay $20M in total dividends next year that should push the market cap over $600M while still retaining loads of cash for Sky to do other things.
All I know is that the SP for NZME is up 53% since they declared a dividend. And that 53% increase is based on the lower end guidance of total divvy.
If the same happened for Sky our SP would be $485M ($2.77/share).
And we can't even entertain the possibility of merging with a business like NZME while our shares are valued so low. As it stands currently a merger would be a great deal for NZME shareholders but a terrible deal for Sky shareholders.
Let us hope Pooman and the rest of the Board are watching closely and learning how it is done.
Take a look at the Turners thread and consider where they were a couple of years ago.
That is what SKY need to do. Get some runs on the board.
And then the shareprice should look after itself.
Eventually.