Broadcaster Sky grows audience and revenue after acquiring companies in Germany and Italy

 
James Nickerson
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Sky reports strong revenue growth in first full year earnings report since European acquisitions (Source: Getty)

BT? What BT? Sky's customer demand hit record levels in 2015, despite the company's squabbles with its rival.

The figures

Sky’s group adjusted revenue increased five per cent to £11.3bn in the year to the end of June, compared to £10.8bn a year before.

Profits before tax at the broadcaster increased six per cent to £1.196bn over the year, from £1.129bn the year before.

Earnings per share, however, fell two per cent to 56p across 2014/15 compared to 57.1p in 2013/14.

Customer demand grew 45 per cent - the company added 973,000 new customers.

Investors were impressed: shares rose 2.75 per cent to 1,154.95p in early trading.

Why it’s interesting

Sky showed strong revenue growth in its first full year results since the takeover of Sky Italia and the acquisition of a majority stake in Sky Deutschland, its sister operation in Germany.

UK growth continued to impress: the broadcaster now has 12m customers in the UK and Ireland, owing to its strongest growth in customers in a decade, while churn – the number of people who cancelled their subscription – stood at less than 10 per cent in each market.

It looks like that growth is likely to continue: earlier this month, the company signed a joint three-year agreement with its sister company, News UK, to show Premier League highlights on mobile, tablets and online.

But the broadcaster continues to see trouble ahead, in the form of rival BT's Openreach broadband division, which supplies the "final mile" of broadband to customers. Sky reckons BT does not invest enough in Openreach, meaning customers' broadband isn't as quick as it could be.
Earlier this month it began piling on the pressure for an inquiry into the operation, which regulator Ofcom subsequently bowed to. Although a spin-off of Openreach, which Sky has called for, is by no means a done deal.

What Sky said

Jeremy Darroch, group chief executive, said:

It's clear that the steps we have taken to broaden out our business are paying off. By distributing our content over multiple platforms and launching new products and services, we are now able to offer something for every household.

Looking ahead, we see an expanded opportunity for growth by serving the market broadly with multiple products and services. The investments we have made have given us a strong platform on which to build and we have a clear set of plans to deliver long-term growth and returns for our shareholders.

In short

In-fighting with BT isn't enough to prevent stellar growth at the broadcaster.

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