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

Ocado faces a “crunch” year – should you buy or avoid?
Share tips

Ocado faces a “crunch” year – should you buy or avoid?

Ocado was one of the big winners from the pandemic as customers moved online. But now it’s struggling, and losses are growing. So, asks Rupert Hargrea…
27 May 2022
What to buy as the tech-stock bull market crashes
Tech stocks

What to buy as the tech-stock bull market crashes

The decade-long bull market in tech stocks has come to a rapid halt. Investors need to distinguish solid stocks from speculative ones rather than just…
27 May 2022
Share tips of the week – 27 May
Share tips

Share tips of the week – 27 May

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
27 May 2022
Marks & Spencer shares look cheap – should you buy in?
Retail stocks

Marks & Spencer shares look cheap – should you buy in?

Marks & Spencer shares have been a disappointment for investors for two decades. But with the company now on something of a comeback, Rupert Hargreave…
25 May 2022

Most Popular

The world’s hottest housing markets are faltering – is the UK next?
House prices

The world’s hottest housing markets are faltering – is the UK next?

As interest rates rise, house prices in the world’s most overpriced markets are starting to fall. The UK’s turn will come, says John Stepek. But will …
23 May 2022
Scottish Mortgage Investment Trust has fallen hard. But is now the time to buy?
Investment trusts

Scottish Mortgage Investment Trust has fallen hard. But is now the time to buy?

After a spectacular couple of decades, the Scottish Mortgage Investment Trust has fallen by almost 45% so far this year. Rupert Hargreaves asks if no…
26 May 2022
Is it time to pick up growth stock bargains yet?
Investment strategy

Is it time to pick up growth stock bargains yet?

If you’re thinking of picking up some bargains from the tech stock crash, beware – there are still plenty of “growth traps” out there. John Stepek exp…
26 May 2022