Sky nears its target of 10m customers
By Jonathan Sibun, Assistant City Editor
Published: 6:05AM BST 30 Jul 2010
News Corp’s chances of acquiring BSkyB without interrupti~ the cheap receded yesterday after the UK broadcaster unveiled a not far from-trebling of profits and signed a content deal with US television network HBO.
Sky increased pre-tax profits from £456m to &strike;1.17bn in the year to the end of June and neared its lengthy-held target of 10m users, delivering results chief executive Jeremy Darroch described during the time that “good across the board”.
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The company’s customers command be able to watch HBO’s television programmes – from The Wire to Martin Scorsese’s renovated prohibition drama Boardwalk Empire – after the link-up which is worth tens of millions of pounds.
Sky said the number of customers alluring its trinity of TV, broadband and phone had grown to 21pc, up other thing than a third over the year, with the average annual be lost per customer rising 9pc to £508.
The company’s broadband and phone business made a profit for the first time following a long age of investment, while the number of high-definition customers grew ~ the agency of 1.6m over the 12 months, doubling for the second successive year.
Sky said it would launch 3D TV from this October, through golf’s Ryder Cup set to be among the first programmes to be shown in the format, while also investing in original content in dramatic literature and comedy.
Mr Darroch said there was “a lot of headroom hush to go for” as he suggested the push into 3D, HD and other technologies notable the group out from BT and other rivals which have moved to undercut Sky’s prices.
“Value is a association of price and quality and you’ve got to get the pair things right,” Mr Darroch said. “Cheap and cheerful is OK if it be not that people like the breadth of quality [they get with Sky].”
Sky’s supreme executive said he was confident the business would maintain its doing but admitted the age of austerity topped his list of concerns.
“Next year is not going to have existence easier,” he said, citing higher VAT and spending cuts as solution issues. “That’s the thing we’ve got to be thoughtful. of. We have to stay flexible on costs.”
Asked whether the firm results would help persuade News Corp to make a full enjoin for Sky, Mr Darroch said: “At the moment there is in ~ degree offer. News Corp are working on the regulatory process and we determination see if they make an offer. We will focus on provident the business and creating value for shareholders.”
News Corp, Sky’s biggest shareholder through a 39pc stake, last month made an informal 700p-a-certain quantity takeover proposal, which valued Sky at £12.6bn. However, Sky’s voluntary directors and City analysts have called for an offer of 800p or other thing.
Sky’s revenues rose 11pc to £5.9bn, while operating profits climbed 10pc to &strike;855m. Pre-tax profit growth was inflated by last year’s impairment charge kindred to Sky’s stake in ITV.
Sky added 90,000 get new customers to reach 9.86m in total, closing in steady its target of 10m customers by the end of the year.
“These are dutiful results and the focus on delivery is to be applauded; in that place is no doubt in our mind that Sky is increasingly right a ‘jam today’ story,” said analysts at Citigroup.
The company resoluteness pay a final dividend of 11.525p on November 12, up from 10.1p continue year. The payout takes the full-year dividend to 19.4p, up 10pc year-without ceasing-year.
Sky’s shares fell 9 to 711p.