Sky's growing customers fail to stop profits falling

Broadcasting giant Sky has reported a fall in profit before tax from £642m to £527m for the half financial year 2013/14 compared to a year earlier.

In the six months to 31 December operating profit fell by a hefty 16 per cent.

The company said it was moving through a year of investment, absorbing the step up in Premier League costs.

The broadcaster saw adjusted revenue rise eight per cent to £3.7bn and enjoyed record growth in connected Sky+HD boxes, up 1m in the second quarter to 4.4m. The company's High Definition and Broadband service now reaches 5m homes.

Sky added 3.8m paid-for subscription products, achieving the fastest rate of annual growth in three years. The number of retail customers for the fourth quarter rose by 106,000.

Jeremy Darroch, chief executive, commented:

We had a very good first six months of the year as we reaped the benefits of our broader-based
approach to growth. In a consumer environment that remains challenging, customers continued to choose to take Sky products in ever greater numbers in the run-up to Christmas, with Q2 growth up by over 40 per cent on last year.

The company highlighted its new partnership with HBO and the recently-announced deal with ITV to include a new channel for new UK-commissioned drama.