BSkyB profit advances on HDTV
Published 29/07/2010 | 14:52
British Sky Broadcasting Group, which rejected News Corp’s proposed bid for full ownership last month, said annual adjusted operating profit rose 10pc as more clients signed up for high-definition television service.
Earnings before interest, taxes and exceptional items in the year ended June 30 increased to £855m (€1bn) from £780m a year earlier, slightly ahead of analysts’ average estimate of £852.9m.
Sales rose 10pc to £5.9m, the Isleworth, England-based company said in a statement.
“It’s been a very strong quarter for high definition,” Chief Executive Officer Jeremy Darroch said on a conference call.
“It’s establishing itself as the new standard for television, especially for sports and movies.”
BSkyB in June rejected a £7.8bn offer from Rupert Murdoch’s News Corp for the 61pc of the UK’s biggest pay-TV operator it doesn’t already own.
BSkyB spurned the 700 pence a share bid and said it wanted at least 800 pence. Investors said Murdoch’s bid doesn’t reflect the company’s increasing cash flow after investment in football rights, US films and high-definition content.
BSkyB’s independent directors, led by Nicholas Ferguson, chairman of SVG Capital, said they may accept an offer of more than 800 pence a share.
There is a “significant gap” between News Corp’s proposal and the company’s value, Ferguson said last month.
The company said today it signed an agreement with Time Warner’s HBO pay-TV service to exclusively show all new HBO series including director Martin Scorsese’s “Boardwalk Empire” show.
Financial terms weren’t disclosed. Total costs for programming and content rose 9pc to £1.9bn.
BSkyB shares dropped 0.6pc to 715.5 pence at 9:53am in London trading.
Growth in high-definition services may “pause for breath,” Darroch said. About 30pc of subscribers have taken the high-definition service so far, he said.
BSkyB, which has 9.86 million customers, is aiming for 10 million by the end of 2010. The company attracted viewers to high-definition services after cutting installation prices for set-top boxes.
Full-year free cash flow, excluding the company’s settlement with EDS, advanced 23pc from a year earlier to £626m, after rising 17pc in the nine months ended March 31.
The company added 90,000 net new customers in the fiscal fourth quarter, and a net 429,000 of its customers signed up for high-definition services.