Wednesday 24 January 2018

BSkyB says it is 'fit and proper' as it unveils report profits

Operating profits at BSykB jumped 25pc to £939m in the nine-months to the end of March, on revenue up 5pc to £5.1bn. Photo: PA
Operating profits at BSykB jumped 25pc to £939m in the nine-months to the end of March, on revenue up 5pc to £5.1bn. Photo: PA

BSKYB, the pay-TV group, said it remains a "fit and proper" holder of a broadcasting licence as its reported record nine-month profits.

The satellite broadcaster, where Rupert Murdoch's News Corp may be forced to sell its 39pc stake following a damning phone hacking report by MPs, said it was talking with the regulator Ofcom in its assessment of BSkyB's suitability to air television in Britain.

MPs on the Culture, Media and Sport Select Committee claimed Mr Murdoch was "not a fit person to exercise stewardship of any international company", and that News Corp was "corporately" responsible for "wilful blindness" over the News of the World phone-hacking scandal.

Ofcom, which has the power to revoke BSkyB's valuable broadcasting licence if it decides that any director or controlling shareholder is not "fit and proper", signalled yesterday it would take into account Tuesday's report by MPs.

If the regulator came to the same conclusion as MPs, analysts said the embattled media tycoon will have to sell the stake or watch the £12bn pay-to-view company lose its valuable licence.

BSkyB said on Wednesday: "The company ... continues to believe that it remains a fit and proper licence holder, as demonstrated by its positive contribution to UK audiences, employment and the broader economy, as well as its strong record of regulatory compliance and high standards of governance."

The satellite broadcaster's results revealed its value to Mr Murdoch's media empire by reporting a 25pc jump in operating profits to £939m in the nine-months to the end of March, on revenue up 5pc to £5.1bn.

Profits were lifted by more subscribers turning to the dominant pay-TV group for broadband and phone services. BSkyB now has 10.55m customers after adding 78,000 net new households in the third quarter.

Also boosting profits was £31m from News Corporation as a break fee for its failed attempt to take control of the company.

Solid demand for services such as broadband and phone services, made up for a slowdown in new customers for its television service. The group added 15,000 new customers to the TV service, broadly in line with expectations, but well below the 51,000 it added in the quarter last year.

"We have made a good start to 2012," Jeremy Darroch, the chief executive, said. "In what remains a tough economic environment, strong and consistent execution of our plan has delivered good growth across our product range."

BSkyB has added fewer net new customers to its service in recent quarters, but instead focused on good cost control and selling more products to existing customers to boost its financial performance.

BSkyB shares rose 2.4pc to 707.5p a share in early trading.

Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said BSkyB was "powering ahead" despite other "distractions".

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