Sky Network Television posted a 25.5 percent increase in full year net profit to $97.7 million, as viewership, subscriber numbers and average revenue per subscriber rose.
The result for the year to the end of June compared with $77.9m the year before and was achieved on operating revenue up 6.5 percent to $658.8m.
A fully imputed final dividend of 7 cents per share is to be paid, giving a total dividend for the year of 14cps, compared to last year's total dividend of 10cps.
Sky chief executive John Fellet said viewership was up 8 percent, while Sky's subscriber base grew by 5.3 percent over the previous year, to a new high of 748,576. Sky was now in 46 percent of New Zealand homes. As of yesterday, Sky's subscriber count was 752,405.
But annual gross churn -- a measure of the proportion of subscribers dropping Sky -- increased to 14.9 percent from 13.4 percent last year, reflecting difficult economic conditions.
Sky said its share of television viewing in homes increased from 25 percent in 2007 to 27 percent in the latest year. That share of viewing was achieved from the 46 percent of households with access to Sky.
The figures also show a fall in the percentage of subscribers buying the $80.80 a month package of start up and movies and sport, down to 39 percent from 43 percent, while penetration of the $63.05 start up and sport was up to 35 percent from 33 percent.
Penetration of the $66.58 start up and movies was flat, while the "other" category -- mainly the $46.78 start up only -- was up to 18 percent from 16 percent.
An analysis of Sky's revenue showed the main category of residential subscriptions up 8 percent to $515.6m, reflecting a 5.3 percent increase in subscribers and a 2.6 percent increase in average revenue per subscriber.
Advertising revenue rose 4.9 percent to $66.5m, with Prime revenues up 15.7 percent to $26.5m and pay television advertising revenue down 1.2 percent to $40m.
Operating expenses were up 3.5 percent to $470.1m, while as a proportion of revenue they were down to 71.4 percent from 73.4 percent.
The free-to-air channel Prime had an average 5.3 percent share of the television audience, Sky said.
During the last year six new channels were launched -- Sky Sport Highlights, Sky Movies Greats, Crime and Investigation Network, Vibe, CNBC and Fashion TV -- all of which contributed to an increase in Sky's share of total television viewing.
In June, Sky finished an upgrade of its television station in Panorama Rd, Mt Wellington to a server based high definition (HD) multi channel facility, and last month started broadcasting in HD.
At the same time, Sky also launched a next generation personal video recorder, for which more than 13,000 orders had been taken.
Overall, capital spending rose 47 percent to $119.5m from $81.4m the year before, with $42.6m spent upgrading Sky's television station -- $30.3m more than spent the previous year.
Sky's position as the home of New Zealand sport had been enhanced with the launch of the new trans-Tasman netball competition in April, and the acquisition of the rights to the 2010 Winter Olympics in Vancouver and the 2012 Summer Olympics in London, Mr Fellet said.
Sky shares were down 6c around mid-afternoon to $4.97, having ranged between $6.02 and $4.06 in the past year.