Strong HD Demand Leads to Profit Hike for BSkyB

LONDON: BSkyB’s operating profits rose 10 percent in the second quarter, after the British pay-TV giant added more than 400,000 new subscribers to its HD service in Q2.

BSkyB reported that 30 percent of its 9.86 million customer base now has the Sky+HD service. The 429,000 customers who signed up in Q2 represents a 47-percent increase over the same period last year. In total BSkyB added 90,000 net new customers, on track to reach its target of 10 million subscribers by year’s end. For the quarter, 119,000 new broadband customers signed up, for total customer base of 2.6 million. BSkyB said that 20 percent of customers now take a "triple play" package of TV, broadband and telephony services, a 36-percent increase from a year ago.

Revenue rose 11 percent to £5.9b billion ($9.2 billion) in the second quarter. Operating profits reached £855 million ($1.33 billion).

Jeremy Darroch, the chief executive at BSkyB, said: "We’ve had another good quarter to bring our financial year to a strong close. Customers are choosing Sky in ever greater numbers, not just for TV but across our entire product range. High definition goes from strength to strength, with more than twice as many customers as a year ago. At the same time, customers are choosing broader bundles of services, with one in five now taking all three of TV, broadband and telephony. Overall, customers are taking 45-percent more additional subscription products than a year ago."

“Strong customer demand is increasingly reflected in our financial results, with double-digit growth in each of revenue, operating profit and cash flow. Earnings per share are up 20% to a record 31.1p and we are proposing a further 10-percent increase in the full year dividend, which has now doubled over the last five years."

He added: “It has been a good year for Sky but we stay focused on the challenge ahead. The economic outlook remains uncertain and, against that backdrop, we’ll pursue the consistent set of priorities that have served us well so far. Executing on these plans will build a larger, more profitable business for the long term.”