BSkyB beats forecasts with record profits
BSKYB yesterday shrugged off the furore surrounding its parent firm News Corp to post a record profit for the nine months to March.
As rumours swirled about the firm’s future following a parliamentary report criticising News Corp and owner Rupert Murdoch, BSkyB delivered operating profit of £908m. Pre-tax profit rose 27.5 per cent to £899m.
“We have made a very strong start to 2012, making good progress right across the board,” said chief executive Jeremy Darroch. “We’re delivering good growth, not just in new households, but with our other products as well, despite the difficult economic backdrop.”
The media group gained a net 904,000 subscriptions in the first quarter of the year. Sky now has 27.7m subscriptions on its books, with the average customer taking 2.6 products, up 0.2 on a year ago as the firm’s “triple play” focus on phone, broadband and TV bundles takes hold.
Average revenues per customer rose by £9 to £546 despite a freeze in subscription fees. Overall revenue rose five per cent to £5.1bn.
“The results were pretty solid, slightly ahead of our forecasts with good momentum throughout the business,” Peel Hunt analyst Patrick Yau said. “There is the new Now TV product launch to look forward to, and the investment in content seems to have translated into better customer traction.”
While the results came in slightly above analyst forecasts, many fretted that the uncertain outcome of Ofcom’s probe into Murdoch’s ownership of 39 per cent of BSkyB, was weighing the firm down.
“The headlines have been pretty aggressive towards News Corp, and they could see this as unnecessary stress. Ofcom’s decision could be the catalyst for a sale,” Charles Stanley analyst Richard Nunn told City A.M..
While it is far from certain that Ofcom will order a sale, Nunn put Apple and Google in the frame as potential buyers, given their large cash piles. Others also pointed to rival TV groups ITV and Virgin as logical fits.