FOXTEL Accelerates Growth in Subscribers and Profits To Record Highs

Thursday, August 9th, 2007

FOXTEL today announced it had achieved record high growth across all key metrics in the year ended 30 June 2007.

FOXTEL’s earnings before interest, tax, depreciation, and amortisation (EBITDA) for the year of $237m were up 40% on last year’s result. FOXTEL posted a record $76m profit (before tax and refinancing charges, after depreciation and interest and including joint ventures) up from last year’s maiden profit of $4m.

At 30 June 2007, FOXTEL had 1,292,000 direct subscribers (including the sales queue), an increase of 13.1% since 30 June 2006. The net increase of 150,000 subscribers represents a 36% increase on the net additions in the previous year. FOXTEL’s total subscriber base, including wholesale customers, grew to 1,443,000 an increase of 12.4% over the 12 month period.

FOXTEL completed the migration of all subscribers to the Digital platform in January 2007, less than three years after the launch of the Digital service to achieve the world’s fastest digital conversion. Over 16% of subscribers have taken up the iQ, FOXTEL’s Personal Digital Recorder, up from 10% at 30 June last year. Over one-third of all new subscribers are taking the iQ.

FOXTEL’s average revenue per user (ARPU) continued to improve, driven by high consumption of FOXTEL Digital services. Penetration of Platinum, the highest package, remained in the mid-40% range with less than 5% of all subscribers electing to take the $36.95 entry price package.

The combination of strong subscriber growth and improved ARPU delivered a 13% increase in subscriber revenue to $1.23b while total revenues reached $1.42b.

FOXTEL continued to deliver improvements in ratings over the year. For the year to 30 June 2007, subscription television achieved a 58.8% overall share of viewing in subscription TV homes, compared with 56.1% share in the corresponding period in 2006. Strong ratings performance continues with a further lift in subscription viewing to a 60.2% share for the first 26 weeks to 30 June 2007.

Subscription television’s share of all TV viewing, including those homes that don’t have the service, increased from 18.5% to 20.8%. In the nation’s largest region of Sydney, subscription TV continued to be the most watched service with a 24.8% viewing share that was greater than any of the commercial or national broadcasters.

The strength of the content offering, combined with the consumer benefits of the iQ has resulted in continued low churn rates with total churn remaining below 12% for the financial year.

FOXTEL Chief Executive, Kim Williams said: “We’ve achieved strong momentum across all areas of FOXTEL’s business. Existing subscribers appreciate the superior entertainment experience they receive from FOXTEL – and more consumers are joining FOXTEL. They are subscribing to more services, choosing to view more of our content and remaining committed to the service like never before. We will continue our investment in expanding our range of exclusive and compelling content, continuing our extension into new delivery mechanisms like broadband and mobile while retaining our strong focus on delivering improved business performance.”

FOXTEL Highlights:

“¢ FOXTEL now provides services to 1.443 million subscriber homes including wholesale customers and subscribers in the sales queue. FOXTEL’s direct subscriber growth was 13.1% for the year to June 07, compared with 10% the previous year.
“¢ FOXTEL’s EBITDA increased 40% to $237m in the year to June 07. Net profit (before tax and refinancing charges but after depreciation and interest and including joint ventures) increased from $4m to $76m.
“¢ FOXTEL is now 100% Digital, only three years after the launch of the FOXTEL Digital platform.
“¢ Over 16% of FOXTEL’s direct digital subscriber base now enjoy the FOXTEL iQ, up from 10% at 30 June 2006. The iQ sell-in rates are higher than 33%.
“¢ FOXTEL has maintained record levels of average revenue per user (ARPU) and churn has remained at below 12% which is world class by subscription television standards.
“¢ Since June 30, FOXTEL has completed an agreement with Network TEN to retransmit the TEN digital signal on FOXTEL’s satellite (in Sydney, Melbourne and Brisbane) and cable platform with planned commencement in September. The agreement will enable consumers to view TEN’s digital signal seamlessly through FOXTEL and access TEN’s schedule and program details via FOXTEL’s electronic program guide, as well as employ the full functionality of the FOXTEL iQ. FOXTEL already has digital retransmission agreements with the ABC, SBS and the Nine Network.
“¢ In July 2007, the Federal Court dismissed in its entirety legal action commenced in 2002 by the Seven Network against FOXTEL and other media companies and sporting organisations.

For further information:
FOXTEL Corporate Affairs
Phone: (02) 9813 7602

Links: Foxtel