Billion dollar profit for BSkyB

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LONDON -- Satcaster BSkyB posted full-year net profit of £499 million ($1 billion) for the 12 months ending June 30, down from £551 million the previous year, on revenue of £4.6 billion ($9.4 billion), compared with £4.1 billion for the year-ago period.

Announcing its overall annual financial highlights, Sky said that operating profit for the full year totaled £815 million ($1.7 billion) on earnings before interest, taxation, depreciation and amortization of £1 billion ($2 billion).

The satcaster, which has spent heavily on marketing over the year to promote its television, telephony and broadband platform against aggressive competition from rivals including Virgin Media and BT Vision, said marketing expenditure rose £112 million ($227.8 million) over the year to £734 million ($1.5 billion).

Earlier this month, Britain's most successful pay television company announced in a trading statement that subscriber figures had climbed 90,000 to 8.6 million.

Programming costs remained flat at £1.5 billion ($3.1 billion), with £842 million ($1.7 billion) spent on sports rights. Movie costs were down £25 million ($50.1 million) at £285 million ($579.7 million) while news and entertainment costs were £184 million ($374.2 million).

CEO James Murdoch hailed the year as "one of enormous importance and change for us," that had encompassed the rollout of its broadband and phone services as well as the addition of HD services to Sky's television portfolio.

"This expanded product range is now attracting new customers to Sky at a very healthy pace as well as deepening our relationships with existing customers," he said.

"The team has delivered a strong financial performance whilst building the foundations for future growth," he added. "Continued successful execution of our strategy gives us confidence that we are well placed to capitalize on the significant opportunities available to us."

Analysts said the results were ahead of expectations and were optimistic about growth prospects in the coming year.

"Encouragingly, the company suggests that this operational momentum has continued into Q1 for the new financial year," UBS analyst Daniel Kerven said in an investment note. "In our view, Sky has the best product and pricing in the triple play space, which should drive strong operational momentum."


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