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Sky on a high as its profits and subscribers soar
Nick Goodway, Evening Standard31 Oct 2008
While other media companies batten down the hatches for recession, British Sky Broadcasting today reported a 21% rise in first-quarter profits.
Subscriber numbers rose by 87,000 in the quarter, taking its subscriber base above nine million for the first time.
Chief executive Jeremy Darroch said: "TV becomes more important when people are tightening their belts and going out far less.
"Our packages start from 57p a day [£17 a month] and even our top package [£47 a month] costs less than one family night out. We are finding that people are choosing to upgrade their TV to make the most of their time at home. Our high-definition package, for example, has just had its best-ever quarter."
Sky's profits rose to £182 million on revenues up 5% at £1.25 billion. Earnings rose by 22% to 6.1p a share.
Darroch said: "Looking ahead, the consumer environment will remain challenging and we are well positioned to manage the business accordingly."
He also said Sky would decide by the end of next month whether it will launch a High Court appeal against the Competition Commission ruling that it must sell down most of its 17.9% stake in ITV which it bought to block a merger with Virgin Media.
Darroch said the rebranding of the digital broadcasters main channel Sky1 in August had been very succesful with a "raft of programme successes" including Hairspray The School Musical, Ross Kemp on Gangs, Prison Break and Bones.
Sky1 broke through the 600,000 audience barrier 12 times in the quarter compared with seven times in the previous one.
One area of concern was a £10 million drop in advertising revenues to £68 million. But compared with rivals advertising is a small part of the broadcaster's revenues. Retail subscriptions amount to £972 million. Average spend per customer rose by £19 to £430 a year.
Darroch said: "The economic climate is tougher than it has been for many years and like all companies we face uncertainty. But we have built a healthy and relatively resilient subscriber base and are adding more customers and selling more products to them."
