High definition lifts earnings at BSkyB

SHARES in BSkyB rose yesterday after the broadcaster posted a surge in full-year pre-tax profit, driven by record levels of new subscriptions as cash-strapped customers stayed at home.<br /><br />The dominant pay-TV firm said that its customer base had grown at its fastest rate for five years &ndash; with the addition of 462,000 subscribers over the period &ndash; thanks to &ldquo;strong demand&rdquo; for its high definition (HD) service and its TV, broadband and phone packages.<br /><br />&ldquo;This is the year where HD TV moved centre-stage,&rdquo; said BSkyB chief executive Jeremy Darroch, adding that the firm now has 1.3m HD subscribers.<br /><br />BSkyB reported pre-tax profit of &pound;456m in the year, up from &pound;60m in 2008, as revenues grew eight per cent to &pound;5.4bn.<br /><br />However, the leap in profit was partly caused by favourable comparatives, as the previous year&rsquo;s financials had included a large impairment cost of &pound;616m that BSkyB took on the value of its stake in ITV, the commercial broadcaster.<br /><br />The impairment on the investment this year came in at &pound;191m, helping the figures substantially.<br /><br />The number of customers leaving was broadly level at 9.9 per cent, and the lure of HDTV and cheaper packages meant that the average amount each customer paid rose to a new high of &pound;464 per year.<br /><br />Darroch said he still expected the consumer environment to remain challenging but that BSkyB was well-placed as customers stayed at home. He also reiterated the broadcaster&rsquo;s opposition to a report by industry watchdog Ofcom which said it should provide access to its channels to competitors for a regulated fee.<br /><br />Sky increased the full-year dividend by 5 per cent to 17.6 pence, its fifth successive year of increases. Its shares gained 5.2 per cent to close at 546p.