BSkyB races to £1bn despite feeling the consumer pinch

Net new TV subscribers were 40,000 in the last quarter against 90,000 a year ago.

"Last year we were going like a train," said chief executive Jeremy Darroch. "Growth in absolute terms is a bit down on last year."

Darroch pointed out Sky did gain a further 30,000 customers who took broadband only.

Churn, the rate at which subscribers quit, was also better than expected at 10.4%.

"The big picture is tough market but good performance," said the Sky boss, who was unveiling a 23% surge in operating profits to £1.07 billion for the year to June.

Revenues jumped 16% to £6.6 billion as customers buy more services, underlining why Rupert Murdoch's News Corp wanted to buy the 61% of BSkyB it did not already own, until the hacking scandal forced the bid to be abandoned.

Darroch came up with a string of announcements to please the City:

a £750 million share buyback;

a 20% hike in the dividend to 23.28p;

a seven-year deal, signed just before 7am today, which will see Sky screen all Formula 1 races live for the first time.

The board, which met yesterday, gave unanimous backing to chairman James Murdoch despite questions about his judgment at News International. But Sky confirmed it will refresh the board, with long-serving directors Allan Leighton and David Evans quitting.

Some in the City had called for a buyback of as much as £2 billion to reward investors who have seen shares slump by more than 15% from 850p because of the axed bid.

But analysts cheered the results. "Sky has delivered," said Citigroup, which has a target price of 999p.

Numis increased its target to 850p and Bank of America Merrill Lynch is sticking to 940p.

The shares rose 4p to 720p.

News Corp is expected to make a fresh bid, perhaps next year, after the scandal abates.

Darroch said hacking was "entirely repugnant" but added: "Let's be clear. Sky and News International are entirely different companies."