ITV Shares Sale, HD Boost Sky Results

LONDON: BSkyB’s pre-tax profit rose from £63 million to £349 million in the third quarter, with the satellite platform’s results boosted by strong take-up of its HD service as well as the disposal of some of its shares in ITV.

Sky reported a £115 million profit on its disposal of a 10.4-percent interest in ITV—after writing down the value of its stake last year. The platform retains a 7.5-percent interest in the British broadcasting group. Overall revenues for the company in the period rose from £1.3 billion to £1.5 billion. Highlights of the period include a net subscriber growth of 62,000, reaching 9.77 million homes. The Sky+HD base now stands at 2.5 million, with 428,000 net additions. Churn for the quarter fell from 10.6 percent to 9.9 percent, and ARPU rose from £452 to £503. For the nine months ended March 31, revenues rose 10 percent to £4.4 billion, with a profit before tax that more than doubled to £707 million. Profit after tax rose from £169 million to £542 million.

“The business has continued to perform very well in what remains a tough consumer environment," said Jeremy Darroch, chief executive of ITV. "Customers are responding to our focus on quality, innovation and value, and success in our multi-product strategy has allowed us to deliver double-digit growth in each of revenue, free cash flow and earnings per share. We have seen a huge response to our decision to cut the upfront cost of high definition, with net additions of 428,000—up 76 percent on the prior year. The number of customers taking all three of TV, broadband and telephony is up 39 percent year on year and, as customers reward us with more of their business, ARPU has surpassed £500 for the first time."

He continued: “Our leading HD box is allowing us to bring more innovation to customers faster and at lower cost. The launch of Sky 3D, Europe’s first 3D TV channel, has got off to a good start, with more than 1,000 venues signed up so far. We’re on track to bring 3D to residential customers later this year along with our new video-on-demand service, Sky Anytime+. All of this will be available through our existing HD box. Today’s results show that our financial performance is accelerating as we move through our investment in broadband and HD. Our focus on delivering an outstanding service for customers positions us well for sustainable growth in shareholder returns.”