BSkyB Posts Record Fiscal-Year Operating Profit, Quarterly TV Sub Growth Slows

LONDON - U.K. pay TV giant BSkyB on Thursday reported improved fiscal full-year financials, including a record operating profit, but slower quarterly subscriber gains than in the year-ago period.

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The satellite TV firm, in which Rupert Murdoch's News Corp. owns a 39 percent stake, added 20,000 subscribers in the latest quarter, which was its fiscal fourth quarter, compared with 40,000 in the same period of 2011. It also added 37,000 home communications users in the latest period, up from 31,000 in the year-ago period.

Analysts had on average expected 15,000-20,000 pay TV subscriber additions.

The company announced a new $500 million ($774 million) stock buyback program.

For its full fiscal year ended June 30, BSkyB reported about 100,000 subscriber additions to end June with 10.288 million pay TV users.

The company's full-year operating profit amounted to a record £1.2 billion ($1.86 billion), up 14 percent from the year-ago period. Revenue for the year rose 3 percent to £6.8 billion ($10.5 billion).

Calculated fourth-quarter results included an adjusted operating profit gain to £315 million ($491 million), ahead of the £295 million ($460 million) analyst consensus.

“We have delivered record financial results after another year of strong operational growth," CEO Jeremy Darroch said. “In what remains a tough economic environment, customers are choosing Sky over other providers. We’ve continued to add new households and existing customers are remaining loyal and taking more products from us. More than 9 million homes are now choosing to watch their TV through Sky."

The company on Thursday also said it would brings its telephone and broadband services to Ireland later this year.

Discussing his outlook, Darroch said he expects no economic improvement in the U.K. over the next year. "We remain pretty cautious on the outlook for advertising," partly due to the London Summer Olympics, the CEO said. Advertising revenue, which accounts for only a single digit percentage of the firm's overall revenue, declined 3.9 percent at BSkyB for the most recent year.

Darroch also discussed a new, costly three-year English Premier League rights deal that BSkyB recently struck, but declined to comment on telecom giant BT's plans after it bought two packages, including about half of all high-profile matches. Overall, the EPL deal was "a good outcome" for BSkyB, Darroch said. With sports programming costs being one of the firm's largest cost factors, "we now have greater certainty," he said.

Email: Georg.Szalai@thr.com
Twitter: @georgszalai