BSKYB, the satellite TV giant, yesterday said it had increased first quarter profits in “tough” circumstances by squeezing more cash out of existing customers.
The average Sky customer spent £535 in the three months to the end of September, a £25 increase on the same period last year, after the satellite broadcaster boosted the number of subscribers who buy all three of its TV, broadband and telephone packages.
Almost a third of its 10.3m customers now buy so-called “triple play”services, an increase of 29 per cent compared to last year, helping it to grow pre-tax profit by 33 per cent to £307m.
Revenues jumped from £1.53bn to £1.66bn while diluted earnings per share increased from 10.4p to 12.8p.
The number of new subscribers signing up to Sky in the three month period fell to just 77,000, a marked slowdown from the 96,000 it added in the first quarter of its last financial year.
Jeremy Darroch, chief executive, said: “Looking ahead, the environment is likely to remain challenging as a result of the pressures facing consumers in the UK and Ireland.”
Profits were flattered by the inclusion of a £39m break fee paid by News Corp, which was forced to abandon its bid for the BSkyB shares it didn’t own already amid a political storm over phone hacking at its Sunday tabloid the News of the World.
News Corp attempted to buy BSkyB in the expectation it would start generating huge amounts of cash.
In the first quarter, cash generated from continuing operations was up by £131m to £348m while adjusted free cash flow was £96m – a 39 per cent jump compared to last year.