BSkyB has reported a good start to its financial year after ear-marking £5.3bn for Sky Deutschland and Sky Italia with a rise in revenue, profit and subscribers in the first quarter, slightly ahead of expectations.
The British broadcaster increased revenue by six per cent to £1.9bn for the three months to September 30, with operating profit- up 11 per cent to £316m on the same period last year.
Across TV, broadband, phone and its add-on digital services such as Sky Go Extra, Sky added 760,000 new subscribers in total, up eight per cent on the previous quarter, despite increasing competition from rival BT.
The broadcaster’s Ryder Cup coverage was a “standout event of the period”. Sky's dedicated channel for the event, which was held in Gleneagles, was watched by 4.1m people.
Chief executive Jeremy Darroch said it was a strong start to the year:
After a year of investment, we are seeing the returns coming through with good top-line growth of 6 per cent translating into an 11 per cent increase in profits. This strong financial performance was fuelled by continued operating momentum. We are seeing broad customer demand for our products whilst opening up new revenue opportunities.
A breakdown of subscriber numbers showed an additional 46,000 TV customers, 75,000 broadband customers and 105,000 telephone customers in the quarter. Sky said 37 per cent of its customers were now signed up to its "triple pay" bundle of services.
Darroch added that additional connected TV services such as Sky Go and Now TV were driving growth:
The investments that we have made in new connected TV services are delivering growing benefits to our business. We extended our lead as the UK's largest connected TV platform, surpassing six million connected homes. Sky Store more than doubled its revenues and our mobile TV service Sky Go Extra achieved a record quarter of growth. The benefits are clear as connected customers watch more TV, spend more with us and are more loyal.
The deal to buy Sky Deutschland and Sky Italia to create Europe’s largest pay-TV operator announced back in July looks to be on course with approval from regulators and shareholders.
BSkyB Expects the deal to be completed by mid-November.