BSkyB profit up as customers hit 9.6m

BSkyB has posted strong first quarter profits after adding a better-than-expected 96,000 customers, due to strong demand for its broadband and telephone services.

The strong operating performance, which took the total customer base to 9.96m, helped the firm to post revenues up 15 per cent to £1.5bn, in line with forecasts, and adjusted operating profit up 25 percent to £255m Analysts had been expecting adjusted operating profit of £235m, according to a Reuters poll.

Churn, or the percentage of customers who left the service, was steady on last year at 11.2 per cent, while the average revenue generated per user was at a new record of £514.

The amount paid by each customer was boosted by demand for additional products such as HD TV and broadband.

"Operationally, we have made a very good start to the year with 96,000 net customer additions and record take-up of our additional subscription products," chief executive Jeremy Darroch said.

"This performance, combined with our continued emphasis on operational efficiency, is translating into strong financial results."

BSkyB is also engaged in a takeover process, after News Corp proposed to buy the 61 per cent of BSkyB it does not already own. It offered 700 pence per share but BSkyB's independent directors have demanded an offer of over 800 pence.

Manoj Ladwa of ETX Capital said: "BSkyB goes from strength to strength as it reported a solid set of first quarter numbers. The broadcaster is also reaping the benefits of a strategy shift as it increasingly cross-sells to its expanding customer base. Both are factors that are likely to see News Corp either raise its offer quite significantly or walk away."