Sky 'set for a profits leap' as money gets tighter

"Our basic £26-a-month package is less than the cost of taking a family to the cinema, which people can see is good value," said chief executive Jeremy Darroch. He also said more and more Sky customers are taking more than one service from the group, whether it is TV, internet or telephone on the basis of saving money by bundling things together.

Darroch also predicted that the group will start growing profits again next year after a year in which it has had to take the costs of huge internet expansion and a much more costly package of Premier League football.

Sky's revenues rose 10% to £3.7 billion in the nine months to end-March with operating profits dropping from £613 million to £504 million. At the pre-tax level they slumped from £556 million to just £20 million, primarily because of another writedown on the value of Sky's 17.9% stake in ITV.

The stake cost just under £1 billion 18 months ago when Sky effectively blocked Sir Richard Branson's attempt to merge Virgin Media with ITV but since then it has written the stake down by £474 million. Darroch declined to say whether he had received any offers for the shares.

Sky has been ordered to sell its stake down to a maximum of 7% and its appeal against that ruling should be heard in June.