Good morning, everyone. My name is James Bishop. I'm Sky's Company Secretary, and it's my pleasure this morning to help guide us through today's meeting. To all our shareholders, proxy holders, and guests joining today's meeting, thank you for making the time to be with us. Our Chairman, Philip Bowman, will shortly open the meeting. First, I'll take this opportunity to outline a few procedural matters. Today's meeting is being held via Computershare's online meetings platform. The platform enables all virtual attendees to watch the live webcast, see the presentation, and access copies of the company documents associated with the meeting. In addition, shareholders and proxies have the ability to ask questions and to submit votes. I'll now take a moment to outline how you can do this. Questions can be submitted at any time. To do this, please select the Q&A icon to the right of your screen.
Type your question into the field provided. It will be helpful for you to indicate whether your question relates to a resolution or general business, and you can also use this method to indicate if you need technical assistance. Once you have entered your question, press Send, and your question will be immediately submitted. You can do this at any time from now. As I mentioned, you can also use this method to ask for help, and a member of the Computershare team will respond to you directly through the chat function. Alternatively, you can call Computershare on 0800 650 034. While you can submit questions from now on, we will not address them until the relevant time in the meeting. At that point, I will read out your questions for the chair.
We do ask you to ensure your questions are relevant to the meeting, and we encourage you to be succinct and specific. We do have a moderator who will be assisting us by correcting any obvious typos, and in the interest of time, if we receive multiple questions on the same topic, the moderator may choose to group these together into a representative question. As questions can be submitted throughout the meeting, and in the interest of time, we may respectfully choose not to pose a question if it has been covered in the presentations. We will endeavor to answer all shareholder questions during the meeting. However, if we run out of time, we will answer any outstanding questions directly via email after the meeting. Turning now to voting. This will be conducted by way of a poll on all three items of business.
To ensure you have enough time, we will shortly open voting for all resolutions. If you are eligible, you'll be able to cast your vote by selecting the Vote tab to the right of your screen. Once voting has opened, you can select your voting direction on each resolution from the options shown on the screen. You can choose to vote for all resolutions at once or individually by each resolution. You will know that your vote has been cast when the tick appears. You can change your vote by simply selecting the Change Your Vote option, and you have the ability to do this until the time the chair declares that voting has closed. Thank you, everyone, and I will now hand you over to your chair to formally open the meeting.
Thank you, James. Good morning. My name is Philip Bowman, and as Chairman, it is my pleasure to welcome you to Sky's annual shareholders' meeting for 2021. I bid a warm welcome to all shareholders, proxy holders, and other guests who have joined our meeting today, whether in New Zealand or from around the world. I'm advised that we have a quorum present, and I therefore declare our annual shareholders' meeting open. I'm also pleased to officially open online voting. I'm joined today by our Chief Executive, Sophie Moloney, our Interim Chief Financial Officer, Andrew Hirst, James Bishop, our Company Secretary, whom you've already met, and fellow board members, Keith Smith, Joan Withers, Mike Darcey, and Geraldine McBride. Members of Sky's leadership team are also in attendance today, and I also welcome representatives from our auditors, PricewaterhouseCoopers, and our corporate solicitors, Chapman Tripp.
Turning now to the format of today's meeting, I will shortly comment on the 2021 fiscal year, as well as our plans for the current year. I will then pass the virtual lectern over to Sophie, who will provide more detail on the significant progress the management team made in fiscal 2021, including a summary of our financial performance and our priorities for the coming period. We will then move to the formal business of the meeting. There are three resolutions as set out in the notice of meeting, including the re-election of Geraldine McBride. I'll ask Geraldine to make some brief remarks to the meeting at that time. Finally, I will open the floor for questions from you, our shareholders.
James has explained the process for submitting questions, and Sophie and I look forward to the opportunity to engage in a good discussion. When I addressed the virtual shareholder meeting last year, I expressed the hope that we would be able to gather and socialize normally at the meeting this year. Evidently, we cannot with Auckland in lockdown for over 10 weeks and counting. Long-term adverse psychological damage to citizens of repeated lockdowns, coupled with the massive damage to so many businesses and livelihoods across New Zealand, casts a long shadow over today's meeting. Governments across the world need to reflect on the decisions taken to manage this pandemic once the present crisis is passed.
Against this backdrop, I'm pleased to report that so far, Sky has weathered the latest challenges well, and I'd like to thank Sophie and the whole Sky team for its professional and agile response to the latest lockdown. With New Zealanders restricted to their homes for many weeks, Sky has provided more than daily entertainment. We've also informed, comforted, and distracted. From the feedback from some of our customers, Sky has been a key source of companionship and a vital connection to the world. Lifting the rate of vaccination is vital to New Zealand being able to emerge from the current restrictions. We're strongly encouraging every member of our team, as well as our contractors, to get vaccinated.
The board is very supportive of initiatives by management to work with other major businesses to drive the get vaccinated message, including the use of our different platforms and talent to reach as wide an audience as is possible. Our involvement in the campaign to trial rapid antigen testing alongside key Auckland businesses is another area of focus. Viewership has been high across our Sky Box, as well as our Neon and Sky Sport Now streaming services. While the lockdown at level four temporarily restricted our ability to meet the installation needs of new Sky customers, churn rates have continued to reduce on the 12.2% compared to 12.6% a year ago. Sophie can provide more color on this as needed.
That said, we are acutely aware that the COVID restrictions have been particularly hard for our commercial customers in the hospitality and accommodation sectors, and we continue to support these customers through these difficult times, valuing the long-term strength and symbiosis of these partnerships. Despite the many external challenges, our results for the first quarter of our financial year remain in line with the board's expectations and the guidance provided at the time of our FY 2021 results announcement back in August. Against this background, let us briefly reflect on the previous financial year. It was encouraging to present a result in August that exceeded the board's earlier expectations. Part of the outperformance arose from underlying operating improvements and part from one-off items.
The delivery of a strong result suggests the transformation strategy that we outlined over the past year, including in my remarks to you at last year's ASM, is beginning to bear fruit. It also reflects the hard work of the Sky team under the leadership of Sophie, who became Chief Executive on December 1st last year, and who has worked tirelessly for our business and for you, our investors. It is encouraging to see the management team under Sophie's leadership so committed to our customers and with such determination to reposition our business in a rapidly changing media sector. Sophie will take you through the details of the last year, but I'd like to make some observations from a board perspective.
We have a clear strategy, one that is tailored to the unique characteristics of the New Zealand market, but also draws on our knowledge of and relationships with comparable businesses, including Sky in the U.K. and Foxtel across the Tasman. Sky has a clear and unique role to play as the preferred aggregator of content for New Zealand customers and as a trusted partner for local and global counterparties. At its core, Sky is an entertainment company connecting our customers with the great sport and entertainment they love through the delivery mechanism that works for them, and with the strategic advantage of being able to reach New Zealanders wherever they live in this country.
We've recalibrated our strategy as Sky looks to transition to growth and believe that success will be achieved by focusing on four pillars: nurturing and growing our Sky Box and streaming customers, being the preferred partner for key rights holders, content creators, and distributors, growing existing and new revenue streams while reducing operating costs aggressively by challenging our historic operating practices. Finally, creating a culture and an environment where the Sky crew are empowered to deliver their best. Everything we do is informed by customer insight, and data is the cornerstone of our decision-making. As a board, we're seeing an enhanced level of strategic assessment and reporting from the executive team as a result of this firm focus on customer insight and the investment we have made in data analytics over the past two years.
Looking to the future, I see 2022 as an inflection point in terms of business performance. It is a year of investment to fuel future growth. Delivering the new hybrid Sky Box is critical to our plans to cement Sky's role as the preferred aggregator in the New Zealand market. Developing Sky Broadband is another key area of investment. The executive team is firmly focused on successfully executing these projects, and the board is monitoring the initiatives closely, given past experience with complex technology projects. Equally important is the ongoing review of our operating model to adjust this to changes in the marketplace. Management has already developed and delivered significant sustainable cost savings, and is focused on delivering further improvements in the second half of FY 2022 and beyond.
As outlined at the June Investor Day, our three-year targets also show a firm focus by management to reshape the business, grow revenues, and reduce the cost base, while continuing to deliver positive free cash flow. Put simply, execution is the key word for FY 2022. We have the strategy, we have the content that matters to our customers, and we must now deliver. Earlier this year, we initiated a process to monetize all or part of our property holdings at Mount Wellington. While the level 4 lockdown restrictions forced Colliers to delay the sale process, I can report that good progress has been made in recent weeks. The response from the market confirms that the board made the correct decision to reframe the scope of the property offer to include all of our buildings on the site.
Management, supported by external consultants, are finalizing a property strategy that includes significantly downsizing our Mount Wellington footprint, a higher profile presence in the Central Auckland site, alongside a commitment to an Anywhere Works program that enables many of our crew to work flexibly between their homes and the company's sites. Once implemented, we will provide a workspace that supports cultural change, facilitates new ways of collaboration and working, and better meets the needs of our team. Several shareholders have asked for more clarity on the board's strategy for capital management, including the possibility of reinstating regular dividends or a possible share buyback. The board is committed to recycling capital, to reinvest in areas of the business that create the most value for our customers, and ultimately, our shareholders.
Subject to satisfactory completion of the property sale process, the board will finalize a capital management strategy and provide details of this at the time of the interim results announcement in February 2022. I commented in my annual report letter that we'd commissioned Propero Consulting to undertake an independent board evaluation. Following discussion of the output of this review, the board has agreed to appoint at least one new director during FY 2022. A formal process managed by an external search firm has been commenced. In conclusion, I'll now ask our Chief Executive to present her report on 2021 and the opportunities and the challenges that she sees for 2022 and beyond. Before I do this, I wish to reiterate my thanks and those of my board colleagues, for your continued interest and support for our business as Sky shareholders.
The board and the executive team are very focused on the task to transform and reposition this business with a firm focus on growing revenue, reducing costs, and executing on our strategy to exceed the expectations of our customers, our partners, the community, and you, our investors. Sophie, over to you.
Thank you, Philip, and good morning, everyone. I'm Sophie Moloney, and it's my privilege and pleasure to address you today as your Chief Executive. I join Philip in thanking you for your support in the past year, and I welcome the opportunity to share with you our plans for the business in the coming period, as well as our review of the past year. We're on a transformation journey here at Sky, and we are clear on the game plan for success. My focus, and that of my entire team, is to execute on that plan with determination. Now, I have a few things to share with you today in that regard, but first, I'll take a few moments to recap on FY 2021. You will have seen the details in our results presentation in August and in our annual report. I'll only focus on some key points.
We were pleased to report strong EBITDA and NPAT that were both slightly above the increased guidance range provided to the market. As noted on this slide, revenue was NZD 711 million. EBITDA was NZD 186 million, and net profit after tax was NZD 47.5 million, with operating costs of NZD 538 million, which was a pleasing 8% improvement on the prior year. As the chair indicated, the strong results were in part due to underlying operating improvements and in part from one-off items, including the sale of OSB, our outside broadcast unit, as well as some COVID-related content cost savings. Adjusting for these items, our net profit after tax was still ahead by 15% against the prior year.
I'm proud to say that we ended the year with a superb 955,168 customer relationships, of which well over 500,000 are our valuable Sky Box customers. My key message at the half year and now is that while these results are good, we can and must do better. This coming year is an inflection point for Sky, of the positive kind, as we look to transform the business, absorbing higher programming rights fees and at the same time growing revenues and reducing operating costs. More on that shortly. Our 4 key strategy pillars involve our customers, our content, our people, and of course, our financial performance, which I've just touched on. Let's briefly look at this year's achievements in the other three areas, starting with our customers.
FY 2021 saw us deliver pleasing growth of 16% in our underlying customer numbers. We have made significant progress towards stabilizing our Sky Box base, with 15% growth in customer activations and further positive improvement in customer churn, as the chair has already mentioned. At the same time, we're also seeing a continuation of the impressive growth in our streaming services with a 57% increase in streaming customers on a like-for-like basis, with both Neon and Sky Sport Now going from strength to strength. Earlier this year, we had the highly successful launch of Sky Broadband, built for entertainment, with customer satisfaction scores remaining very positive right through the first billing cycle. Maintaining high levels of satisfaction on broadband really matters. In a highly competitive market, customers have options.
A strong focus on execution excellence has meant we are exceeding our customers' expectations as we look to build a sustainable long-term business. Turning to our content. It's been immensely satisfying to have secured key strategically important rights deals with, among others, the NRL and NZRL on the sports side and WarnerMedia HBO on the entertainment side, the latter being secured just in time for the recent level four lockdown. For the first time in a long while, we're in a position where there are no significant content rights renewals looming. We have secured the rights that matter for our customers, and it's great to be heading into a period where our focus is on delivering our superb content to our customers and adding value to our partners rather than chasing down significant rights deals.
I can safely say that our success in renewing and securing these multi-year deals is not just about the size of a check. It's also about Sky's credibility as a trusted multi-platform content partner. Rather than hearing from me, please hear directly from some of those key partners.
Well, Sky's been an amazing partner for Rugby over the last 25 years, obviously, and they've allowed us to do a whole lot of things in enabling the game to, you know, reach bigger and broader markets. We've created fantastic competitions off the back of our partnership with Sky, and also been able to invest into the community game and see more and more people be engaged with the game. Well, it's a great partnership. You know, it's a long-standing partnership which has been a win-win for both organizations over a long period of time. Seeing the growth in, you know, production techniques and the way the game's presented now, as opposed to 25 years ago, has also been a great leap forward. They are committed to always improving, driving things around innovation and technology and wanting greater, you know, customer experience.
We're constantly reinventing ourselves and we're constantly driving each other to be better.
Got a brilliant try by Ioane. He is unstoppable.
Here we go.
Hi, I'm Glen Kyne, General Manager for Discovery New Zealand. We've had a long and successful partnership now with Sky for 26 years. More recently, we've brought some innovation to screens, bringing a premium sporting moment and State of Origin onto Three, which delivered incredibly strong results for both Three and Sky. As we look forward, we're finding new ways of working together. At the heart of that is expanding content into new audiences while still super serving the Sky audience. Here at Discovery, we're also expanding our content footprint. At the heart of that is our relationship with Sky, a trusted, active, and long-term partner who will continue to play a big role in everything that we do.
Sky have been incredible partners of Rugby League and the NRL for a number of years now. We've developed a very close relationship over the last couple of years. There's gonna be a lot of innovation that we see rolled out with the production and the screening of NRL games in New Zealand, and I'm excited to see this innovation roll out as Sky New Zealand take our fans even closer inside the stadium.
This is remarkable.
This deal is important for us because it's a partnership, not a media rights deal. This partnership means that together, the NRL, New Zealand Rugby League, the Warriors, and Sky New Zealand can work as one to grow Rugby League in New Zealand. We know over 1 million people are interested in our game in New Zealand, but importantly, we wanna grow participation, we wanna create meaningful pathways for boys and girls, for men and women who play our game. We're incredibly excited for what the next six years holds for both of us together.
Did you miss me? I know I've missed you.
Well, that's new.
WarnerMedia and Sky New Zealand have enjoyed a long and successful relationship over many years. In the past decade, Sky New Zealand has been the dedicated and trusted home of our incredible HBO content, and our new multi-year deal now allows us to expand that content offering to include HBO Max original content, along with Warner Bros.' blockbuster features and first-run series and of course, CNN and Cartoon Network.
It's showtime.
This is an incredibly dynamic and interesting time in the TV landscape, and we're really excited by Sky's innovative and dedicated strategy to bringing the world's best content to Sky and Neon customers. Together, Sky New Zealand and WarnerMedia will deliver some of the most anticipated titles to New Zealand audiences, from Succession-
The revolution will be televised.
to the Game of Thrones prequel, House of the Dragon. Our partnership with Sky New Zealand is one of the most important in the APAC region, and we look forward to many more successful years working together.
One exciting aspect of the Warner deal that we just heard about from Michael is an agreement between Sky Originals and the New Zealand-based arm of Warner Bros. International to collaborate on four co-productions. It's great to be able to work together with a globally recognized brand to produce quality local content and to support the New Zealand creative sector. This continued investment in Sky Originals confirms the important role we have to play as a local Kiwi business in creating content ourselves. Telling New Zealand stories for and about New Zealanders is a special privilege for Sky Originals and for our free-to-air channel, Prime. We're grateful for the funding support Prime and Sky Originals receive from New Zealand On Air and look forward to more collaborations in the coming period as Sky refocuses its efforts on this vital free-to-air channel available to all New Zealanders.
Now last, but certainly not least, let's talk about our people. I was impressed and inspired by the way our teams handled the COVID-19 disruptions in the FY 2021 year. Of course, we're back dealing with similar restrictions now. The drive to continue to deliver for our customers and to keep the show on the road is truly humbling. While there's more to be done, we're making good progress towards being a place where all of our crew are empowered to do their best work. That has included the collaborative process with our crew to create our Sky values, and there remains a real focus on becoming a more inclusive workplace.
Now, in terms of people being able to do their best work, it was hugely exciting to see the success of our creative promos team at the Promax ANZ Awards late last week, with multiple entries picking up richly deserved recognition. Those of you who watched our FY 2021 results will have seen our More video that was one of the promos that received a Gold Promax at those awards. Now, as I reflect on FY 2021, I firmly believe we have the runway we need to succeed. On that note, let's start looking ahead at our financial performance and targets for FY 2022 and beyond, starting with revenue. FY 2022 is the first time in a number of years that we're talking about a return to revenue growth here at Sky.
Our target for the coming year is revenue growth of up to NZD 35 million, which is a strong step towards the three-year goal of NZD 75 million-NZD 100 million annually by FY 2024. This revenue growth comes from improvements across the business from Sky Box and streaming, the recovery of Sky Commercial and Sky Advertising, subject to the current COVID outbreak, and a significant contribution from new business revenues, including Sky Broadband. We also expect to see streaming revenue growth outstripping the decline in Sky Box revenue for the first time in FY 2022. We remain very focused on stabilizing and then, with our new box, growing the Sky Box base. Our second key focus in FY 2022 is reducing our operating costs and doing so in a sustainable and permanent way.
We noted in the results presentation that we're targeting at least NZD 10 million-NZD 15 million of non-programming cost savings per annum within three years, and I've challenged myself and the team to ensure that this is the very minimum that we deliver. Reducing our cost lines, including CapEx, is a crucial part of our transformation journey as we strive to secure sustainable free cash flow levels, which can lead to better capital management and shareholder returns, as the Chair also referenced in his earlier remarks. Now, right now, we're undertaking a rigorous exercise to test every dollar we spend at Sky. I've brought in the former CFO of Foxtel, James Marsh, to provide an expert external eye as we drive ourselves to reimagine every cost line, especially any and all third-party spend.
I've been impressed with the way that Foxtel has achieved sustainable cost management without compromising on their customer promise. I'm pleased to be able to tap into that experience to explore what we can achieve here at Sky in New Zealand. It's my expectation that we'll have completed the scrutiny of the budget by the end of this quarter, and I'll share any findings and deeper cost savings at that time as appropriate. In any event, as the Chair mentioned in his address, despite the curveball of COVID-19, we're tracking well after the first quarter of the financial year, and we remain on track to meet our guidance. The third key area of focus for FY 2022 to support both revenue growth and a lower cost operating model is the delivery of our new Sky Box.
This is a crucial part of our strategy to be the preferred content aggregator in the New Zealand market, and we're on target to have it in customer homes in the middle of the 2022 calendar year. It's much more than a box upgrade. It's the center of Sky's new connected entertainment experience that seamlessly brings together all Sky and free-to-air content alongside popular content apps. The combination of satellite and internet technology delivers the ultimate in high quality, reliable video and audio to every connected home in New Zealand. Having access to all of your favorite sports and entertainment in one place with one remote that can be activated by voice is the game changer that our customers tell us they're looking for. Now here, we have a sneak peek view of what the new box will look like from the outside.
I'm sorry this is a virtual meeting today, as I was hoping to show you this prototype in the flesh, so to speak, but this image will have to suffice. This is the form factor we've already signed off, and our customers helped choose the fresh white finish. Now, I might add, I've had the opportunity to listen to the recent Foxtel strategy presentation and noted the emphasis they are placing on their new iQ5 box to super serve their satellite base. While our strategies are not identical, as the markets we serve have unique characteristics, it's good to see our friends across the Tasman also focusing on strengthening the base with an impressive new box. I look forward to providing further updates on our future technology roadmap in the next reporting cycle.
Before I close, I want to touch briefly on three additional areas that are important to us and which I believe are important to you as our investors too. The first is our commitment to being a good corporate citizen and continuing to give back to the communities in which we operate. There is much we already support through sponsorships and other mechanisms, and I now want to see us bring these existing and new initiatives under an overarching program of Sky for Good and Sport for Good. Now, this is not about a big above-the-line spend, but about how the utilization of our platforms, our talent, and working closely with our key partners can deliver for the greater good. I look forward to sharing more on these initiatives in the coming period. The second is also about being a good corporate citizen in the environmental space.
As I committed in my annual report letter, I've established a team to lead our sustainability journey, including reporting on our progress in FY 2022. I know that commitment to reporting and improving on environmental factors is valued by many investors as well as our customers and team, and we commit to doing a better job of letting you know what Sky is doing in this important area. The third is about rewarding our loyal customers, some of whom have been with us since we launched 31 years ago. Like much of what we now do, we've asked our customers through our Sky Nation panel what they would value in this space. In the coming period, we'll deliver a series of initiatives to thank and recognize those Sky Box customers who are the strategic strength of our business.
Just as it's important to thank our customers for their ongoing loyalty and support, I want to acknowledge and thank our people for their commitment and hard work. In particular, I'd like to thank Andrew Hirst for ably fulfilling the CFO role on an interim basis as we undertook a recruitment process. As we recently announced, I'm delighted to have secured Tom Gordon as our new Chief Financial Officer, who will join the Sky team in December. May I also take a moment to thank each of our board members for their guidance, strategic input, and dedication to our business, and my personal thanks to the Chair in particular, for his superb support to me, no matter the time or day or night. Finally, and perhaps most critically, I confirm my belief that if we deliver value to our customers, our crew, and our partners.
We will in turn deliver value to you, our investors. I'm absolutely committed to executing on our plan and achieving or exceeding the outcomes we've outlined today, and I want to thank you all for your continued support. Now back to you, Chair.
Thank you, Sophie. We'll now move to the formal business of the meeting. There are two resolutions and one special resolutions for shareholders. The ordinary resolutions relate to authorizing the board to fix the auditor's remuneration and the re-election of Geraldine McBride as a Director. While the special resolution relates to amending the company's constitution. These resolutions are set out in the notice of meeting, and you will also find them in the voting section of the online platform, as James described earlier. There will be an opportunity to ask questions on any of the resolutions via the online platform. Given the virtual nature of today's meeting, I think it will be simpler if we take any questions after I've introduced all three resolutions. Accordingly, if you wish to ask a question, please identify which resolution it is in relation to.
As I mentioned at the beginning of the meeting, voting today will be conducted by way of an online poll. We've been accepting votes throughout this meeting, and voting will close after discussion is finished on the final item of business. I'll give you notice shortly before voting will close. The first resolution to be considered by this meeting relates to auditor remuneration, and I now move the ordinary resolution that the board be authorized to fix the auditor's remuneration for the ensuing year. As a reminder, there will be an opportunity to address any questions on this and the other resolutions once all three resolutions have been put to the meeting. The second resolution to be put to the meeting is the re-election of Geraldine McBride as a Director.
Since Geraldine joined the board in September 2013, and since November 2020, serves as chair of the People and Performance Committee. Geraldine retires in accordance with NZX Listing Rule 2.7.1 and ASX Listing Rule 14.4, and being eligible, offers herself for re-election. The board has determined that Geraldine is an independent director and unanimously supports her re-election. I'd now like to invite Geraldine to address the meeting.
Hi, everyone. I'm here today to seek re-election as a director of Sky Television in what is now my final term. You will have heard Philip and Sophie talk about the execution of our strategy for growth and the ongoing transformation of Sky. My expertise and experience as director continues to be put to good use as I have a deep and global background in customer experience, technology platforms, AI, which is artificial intelligence, data, and how these can be applied as part of Sky's business transformation. I work in this space globally across many industries, including media. In terms of governance, I also chair the People and Performance Committee, working to ensure our measures and rewards and our people capabilities are well-aligned to our business strategy and delivering shareholder value. I have extensive experience in cultural transformation and what it takes to deliver business transformation successfully.
People, capabilities, engagement, measures, and rewards are critical.
Company's constitution in the manner described in the explanatory notes with effect from the close of this annual meeting. James, have there been any questions received specifically relating to the resolutions to be put to the meeting?
Thank you, Philip. At this stage, there are no questions relating specifically to the resolutions. I'll just pause briefly just to check that none come through subsequently, so just take a moment. Philip, I can confirm that we have no questions relating to the resolutions.
Thank you, James, very much. Ladies and gentlemen, that concludes our discussion on these items of business, and in a minute, I will close the voting system. Please ensure that you have cast your vote on all resolutions. To allow you to do this, I will now pause for 60 seconds. Will be released to the NZX and ASX later today. We will now open the meeting to general questions. James, could you please share the questions that have been received?
Yes, certainly, Philip. The first question we have is: why did you consolidate the shares 10 for one? It's been done overseas, and it never works out. Your shares may have been penny dreadful going backwards. Please explain.
I think the simple answer to this is we raised a significant amount of capital at a very low price. Following that, the board considered the situation in conjunction with its advisors and believed that it would be appropriate to consolidate shares. I think there is a certain degree of stigma in terms of a company where the share price is particularly low. There are some institutions, for example, in some jurisdictions who are not prepared to buy shares on that basis. I think what we wished to do was to reduce the number of shares in issue and going forward. I mean, quite clearly, in terms of the mathematics, it's a zero-sum game. On the other hand, going forward, I think it rebases the share price at a more realistic level.
Of course, all shareholders were treated entirely equally, so no one was disadvantaged by doing this.
Thank you, Chair.
James, next question.
The next question is: as a customer service company, why is it taking Neon over 7 days to address a streaming issue that limits users' access to only noncaptioned material?
James, thank you for that. I think that's a question I need to pass to the Chief Executive. Sophie, over to you.
Thank you, Chair. Yes, I acknowledge that we have had an issue with the closed captioning, and that we need to be more proactive in sharing with customers when we have this issue. We are actually reliant on a third-party provider whom we are working with. I acknowledge the feedback, and I think the learning for me and the team is let's notify early, and we will be communicating as soon as this issue is resolved. We can do better, but it's certainly well on the roadmap to be fixed. Updates will be coming. Thank you, Chair.
Thank you, Sophie. James, next question.
Next question is: Do you ever think about, let alone talk about, your long-suffering shareholders? I watched several of your presentations without seeing them mentioned. Just how-
A fair question for shareholders to ask, who've been shareholders for a very long time, given the decline in the company's share price. I would, however, just make the observation that over the past year since the last annual general meeting, in fact, the share price has gone up around 30%. I think the question of value destruction has its roots in history. I don't think anyone is blameless for this. On the other hand, in this particular industry, and for too long, I think the company continued down the strategic path, which while it had been relevant many years previously, was increasingly unsustainable. The challenge that the board has currently, and I had when I came in as Chairman, was a real need to reposition this business and rethink the strategy.
That is a challenging thing to do, and it's particularly challenging for a business that has and has consistently been successful for many years by doing the same thing. The reality is new competitors have entered the market, the cost of rights has gone up, technology has changed, and the company was slow to adapt to that. We're doing that today. I believe we are beginning to deliver positive results from that. I think the company is certainly invigorated with Sophie's leadership, and we have made some real progress. We have a clear strategy, as I said in my early address. It is a source of enormous frustration to me, and I know to other board members as well as Sophie, that the share price remains so depressed. I think the reality is, as I said in my address, this year is a year of inflection.
We are investing for future growth. This will be the first year that we are budgeting to grow our revenue for many years. I believe over time and with patience, and that is why certainly that this will be rewarded with share price appreciation. In terms of those who have held these shares for many years, it is a sad picture and one that I can understand people have significant concerns over. James, next question.
Next question is: have we sold the streaming arm or RugbyPass? A footnote in the annual results seems to indicate Fortune purchasing RugbyPass, so I'd like to know if we have sold the business and whether the board and management still think it was a great investment.
Sophie, I think it would be useful perhaps for you to give a little bit of background to RugbyPass and indeed what the current status is and what the current strategy is.
Yes. Thank you, Chair. I readily acknowledge the significant purchase that was made in 2019 RugbyPass. At the time, we were in a fight for the rugby rights. We saw RugbyPass as a key strategic asset. At that stage, it was, you know, mainly the streaming business that we bought into. Obviously, not long after the acquisition, COVID hit, there was no live sport, and we had to take the decision to really look at the investment we're making on the streaming side. You're right, that one aspect of the streaming part of the business, particularly in the Asia PAC area, we disposed to an entity called Premier Sports. However, we still have streaming capability in RugbyPass to give comfort. In fact, we supported New Zealand Rugby with Super Rugby Aotearoa to get that to European audiences.
That's part of the business. We still have that IP. We can still deliver streaming. What we've looked to do is really bring the cost right down and focus on the audience side of the business. At the moment, the way that we had originally intended, it is a conversation that is ongoing right now to give comfort. We've brought the cost base right down, and we're thinking about what's the long-term future of RugbyPass. I hope that helps clarify, Chair.
Thank you, Sophie, very much. James, on to the next question, please.
Can you please comment on the property next door at 34A Leonard Road, Mount Wellington, as this appears to?
Leading the project in terms of looking at monetizing the Mount Wellington site. Andrew, over to you, please.
Sure. Thanks, Chair. Yeah, the shareholder is correct in the sense that the properties at Leonard Road, which we know as studios 2 and 3, are on a cross-lease title. That was part of the reason that we pivoted from a sale of just those 2 sites to the full site as a result of market feedback. Essentially, the process we're running at the moment is to sell the entire site with the cross-lease in place, and ultimately let a new owner determine the best strategy for unwinding or dealing with the cross-lease.
Andrew, thank you very much. James, another question.
Yes. What happened with the M&A possibilities that Jarden had been reviewing?
I think the simple answer to that is that the industry, as you know, we've commented in annual reports and certainly in various other by bringing technology. The process is ongoing. If there is anything that becomes concrete, clearly we have an obligation to report that under the continuous disclosure regime. At the current moment, there's nothing further to add. Another question.
Sophie commented on the Foxtel outsourcing operating model.
Over to you.
Thank you, Chair. I think I was talking about broadly the Foxtel strategy. Yes, you're right. In terms of some of the moves that they've made to manage their cost base, they have looked at offshoring and outsourcing models that make sense. That is certainly something that we will be having a look at. Just one of the interesting dynamics that we're thinking about at the moment, given the COVID impact on borders and getting talent into New Zealand for you as investors, is that by working with the former CFO at Foxtel, who's instrumental in taking out significant cost in that business, we're gonna be hopefully adapting best learnings from that. Obviously, in our own market, that's unique characteristics, as I talked about.
We think it does provide us with an exciting opportunity as we look ahead. Thank you, Chair.
Thank you, Sophie. Perhaps I just add that, of course, Sophie talked earlier about the OSB, Outside Broadcasting. The board considered the future of that in great detail, and we took the decision to outsource a significant part of the Outside Broadcasting capability. A key factor in that was the fact that it avoided essentially capital expenditure of some NZD 50 million over the course of the next few years. It's given us more flexibility, I think, in terms of day-to-day operations as well. It's an area we will certainly look at, but we will look at carefully before taking any decisions. James, further question.
What number of broadband subscribers do you have now, and are they profitable? What competitive advantages do you have in broadband over the big telcos?
I think in terms of the number of broadband subscribers, this is very early days. What I am prepared to say is that the number of weekly additions is ramping up, over the course since the launch. In terms of a competitive advantage, I think, Sophie, that's one for you to answer, please.
Sure. Thank you, Chair. Our competitive advantage right now is that we have Wi-Fi technology that we've brought into the home. The quality of the broadband service, once you have it installed, is very, very good. So far so good. You know, the CSAT scores, customer satisfaction, as we said, right through the first billing cycle, are very impressive. As we've shared with the board, and the board's given us the feedback, you only get an opportunity to launch a new product like this once. We believe we've done it very successfully, and that customer advocacy is gonna keep coming through. You know, I have a household with three boys and PlayStations and much contention on the network.
You know, we don't have to talk about Wi-Fi anymore being on Sky Broadband. At this stage, we see the quality of our broadband delivery being our competitive advantage, coupled with obviously the content offering that we have. Thank you, Chair.
Sophie, thank you again. Very straightforward is that the board will update the market on capital management at such time as a transaction relating to the Mount Wellington property has been consummated or develop its capital management strategy then when it has the full facts of what the balance sheet looks like. The commitment that I gave earlier today is that we will update the market at the time of the interim results announcement in February 2022. The answer is yes. I mentioned we've given consideration to dividends, we've given consideration to share buyback. There will be no further information on this until the interim results announcement next year. James.
Thank you, Philip. You rejected an opening offer of NZD 0.23 per share, a pre-consolidation from private equity about a year or so ago. Given the flagging SP, by that I assume they mean share price, do you regret rejecting it out of hand and not entering negotiations? You probably would have ended up with a deal at NZD 0.26 or NZD 0.27 per share.
I think the answer to that is very straightforward. We did receive an approach. It was very preliminary. It was very draft. It hardly got to a stage where there was a formal proposal. From that perspective, I think I can't really comment further on what is essentially a hypothetical. Another question.
Thank you. With a reduction in non-programming OpEx and a reduction in CapEx, how will the relocation and technical infrastructure upgrade required in the move from Mount Wellington to the new Auckland site?
Migrated a significant amount of the processes and the technology we use, actually, from Mount Wellington into the cloud. The whole operating paradigm is shifting rapidly. Against that backdrop, perhaps, Sophie, you could add a bit more.
Thank you, Chair. I suppose the first thing to say is we're not trying to lift and shift what we have, Mount Wellington into a new Auckland site. Just for clarity, we're taking a floor in an existing building, and that will form part of our property. We have the Albany site, we'll have this floor in downtown Auckland, and we're going to do a leaseback on the core operating facility of Studio One. But we've done an extensive review with the board in terms of the longer term, what does the technology roadmap look like? Exactly as the chair has articulated, we're moving into the cloud.
We think we're making a very considered decision as the right thing to do, not just in terms of the talent we want to be attracting, but as part of that cultural transformation that we're on at Sky. Hopefully that helps to give comfort that we're not gonna be moving studios downtown if that was the concern. Thank you.
Thank you, Sophie, very much. James, next question.
Thank you, Chair. Are there any.
I think Sophie again, that's one for you.
Thank you, Chair. I can share with you that certainly the new box is capable of 4K or ultra-high definition, and that with our satellite connectivity, that helps with the cost of serve. One of the things that we're you know, looking across the ditch again to see how this has gone for Foxtel, it's, there's not as much content as you might think, and there is more cost to deliver in this way, but certainly will be an opportunity. The technology roadmap, including the new box, certainly supports it. Thank you, Chair.
Thank you, Sophie. James, any more?
Chair, that appears to be our last question in relation to general business. I might just pause very briefly just in case.
Yeah, I think that's a good idea.
No, there, that appears to be the end of our questions for today. Thank you, Chair.
Very good, James. Thank you very much for moderating those so efficiently. Before I close the meeting, I would like to thank all of you who have attended today, not just for being at this virtual meeting, but also for your continued support of Sky. As we have outlined today, I think there are exciting times ahead, and I want to just leave you with, you know, the absolute assurance that the management and the board of this company are focused on generating value for shareholders and getting the share price up from the levels it is at the moment. I think that is the final comment for today. Thank you again for being here, and I declare the meeting closed. Thank you all.