Investors back BSkyB despite drop in profits

 
Oliver Smith
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INVESTORS remained confident in BSkyB yesterday, despite a 18 per cent drop in half year profits, as Britain’s biggest pay-TV broadcaster added over 100,000 new customers during its second quarter.

Shares in Sky closed up 4.4 per cent on the results, which included news of a new deal with HBO to secure exclusive access to blockbuster shows Game of Thrones and Girls until 2020.

Half year profits tumbled to £527m – from £642m in 2013 – in an expected drop following Sky’s £2.3bn bid for Premier League football rights, forced up by BT’s rival bidding.

“Good operating momentum led to an eight per cent increase in revenues for the period [to £3.75bn], excluding revenues from the discontinued retailing of ESPN,” said chief executive Jeremy Darroch.

“We are moving through a year of investment in which we are absorbing the one-off step up in Premier League costs well,”

Subscribers took 873,000 new products in the Christmas quarter, Sky said, up 42 percent year on year and beating analyst expectations of 731,000.

“The group is making excellent progress on its ‘broader field of opportunity’ and in connected TV services. However, the Premier League auction continues to overhang the shares, particularly since the Champions’ League loss,” said Numis analyst Paul Richards.

“The investment case remains clouded by the Premier League auction, due between the fourth quarter 2014 and second quarter 2015.”