Sky Reports Revenue Gains in First-Half Results

LONDON: Sky recorded revenues of £6.4 billion ($8.1 billion) for the six months ended December 31, 2016, reflecting a gain of 12 percent, but its operating profit took a hit following an increase in Premier League costs.

Operating profit at the European pay-TV giant slipped to £679 million ($856.3 million) after a £314 million ($395 million) increase in costs for British Premier League football.

Revenues from the U.K. and Ireland rose 5 percent to £4.3 billion ($5.4 billion). Germany and Austria contributed £907 million ($1.1 billion), a 31-percent gain. Revenues from Italy rose 30 percent to £1.2 billion ($1.5 billion).

“We have delivered a strong first half performance across the group, continue to make significant progress against our strategy and remain on track for the full year,” said Jeremy Darroch, group chief executive. “Across the half we have continued to drive customer and product growth in all our markets, adding over 500,000 new customers—faster growth than last year—and selling two million products. That means, in the past three years and since the Skys have come together, we’ve now added 2.5 million customers and total products are up almost 25 percent. This has resulted in sector leading revenue growth of 6 percent, which we’ve achieved despite some pressure on discretionary consumer spending across Europe and a decline in the U.K. advertising market.”

Darroch continued, “We remain confident in our strategic plans and have made significant progress against them. We’ve launched Sky Mobile in the U.K., delivered further enhancements to the customer experience across the group and extended our reach in Europe’s largest TV market with the launch of Sky Sports News free-to-air and Sky 1 in Germany and Austria. Whilst churn in the U.K. has remained higher than planned, we have a full set of actions to address this, including replicating the success of our Italian loyalty program which has resulted in reduced churn. We enter 2017 focused on giving more quality, choice and value to our customers. In the U.K. we plan to launch our Sky TV service without the need for a satellite dish for the first time, at the same time as pushing ahead in the £15 billion [$18.9 billion] mobile market. We are continuing to build our European TV production studio with 100 original series going into production this year. And we will broaden our businesses further with the launch of Sky Store in Germany and Austria and the full rollout of our targeted advertising service, Sky Adsmart, in Italy and Ireland. Whilst we expect the backdrop in our territories to remain uncertain, we are on track as we enter the second half of the financial year and we remain focused on delivering our clear strategy for growth.”