BSkyB earnings growth slows in post-Christmas lull

Earnings growth slowed slightly for British Sky Broadcasting in its traditionally quiet post-Christmas period, although customer numbers and average revenue per user continued to grow.

Earnings growth slowed slightly for British Sky Broadcasting in its traditionally quiet post-Christmas period, although customer numbers and average revenue per user continued to grow.

Confounding concerns about the maturity of its markets, Sky continued to expand its customer base, with subscription product growth of 715,000 in the third quarter and paid-for subscriptions exceeding 30m for the first time.

Earnings for the nine months to the end of March grew 16% to 43.7p, a slight slowdown from the 17% growth seen in the first six months, although revenues increased 6% to £5.38bn and operating profits were up 9.0% to £994m.

New operating efficiencies levered operating margin up 60 basis points to 18.5%, despite programming costs jumping 9.0% to £1.86bn, with sports accounting for almost half of the increase as the company ramps up its offering in preparation for the launch of rival programming from BT.

Chief Executive Jeremy Darroch said the group's multi-product strategy was delivering strong results.

"Despite the tough consumer environment, we added 715,000 more subscription products in three months, taking the total past 30m for the first time. On the back of this growth, we are creating 550 new jobs to meet demand for our products and serve our growing customer base."

The launch on March 28th of new channel, Sky Movies Disney, the first time that Disney has ever been involved in a co-branded movie channel, was a big hit with customers, with Disney titles accounting for 40% of all downloads through 'On Demand' and attracting 685,000 views across Sky Go in its first weekend.

In the television business, Darroch pointed to continued growth in its internet-connected TV services as customers take advantage of new ways to watch our content.

"The number of internet-connected Sky+HD boxes grew by almost 45,000 every week in the quarter, leading to a fivefold increase in On Demand downloads and 37% growth in movie rentals against last year."

OH

Recommended

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Why investors should be “cautiously bullish” for 2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular

Here’s why you really should own at least some bitcoin
Bitcoin

Here’s why you really should own at least some bitcoin

While bitcoin is having a quiet year – at least in relative terms – its potential to become the default cash system for the internet is undiminished, …
16 Sep 2020
Will a second wave of Covid lead to another stockmarket crash?
Stockmarkets

Will a second wave of Covid lead to another stockmarket crash?

Can we expect to see another lockdown like in March, and what will that mean for your money? John Stepek explains.
18 Sep 2020
James Ferguson: How bad data is driving fear of a second wave of Covid-19
UK Economy

James Ferguson: How bad data is driving fear of a second wave of Covid-19

Merryn and John talk to MoneyWeek regular James Ferguson about the rise in infections in coronavirus and what the data is really telling us.
17 Sep 2020