Sky Posts 6-Percent Hike in Quarterly Group Revenue

LONDON: Sky has reported that its first-quarter group revenue is up 6 percent to £2.8 billion ($4.3 billion), with profit up 10 percent to £375 million ($580 million).

Jeremy Darroch, Sky's group chief executive, commented: "We have made a strong start to the year with customers responding well to the quality and breadth of our content, products and services. As we continue to place customers right at the heart of our business, we are focused on offering the very best content at the same time as anticipating customers' evolving needs, delivering the programs that they love across multiple platforms and devices.

"This approach has delivered an excellent financial performance in the quarter, with further broad-based revenue growth of 6 percent, translating into a 10-percent increase in operating profit. This performance was driven by strong demand across the group. We added over 130,000 new customers in the quarter, up 7 percent on the previous year, which means that we've added almost a million new customers over the past 12 months, up 51 percent year on year. Our total product base now exceeds 54 million, and within this, broadband growth in the U.K. had a stand-out performance this quarter, up 77 percent year on year.

"Our investments in content are driving a great performance on screen, with highlights this quarter including record viewing of Sky Atlantic in the U.K., of the Bundesliga in Germany and the X Factor in Italy. We are building scale in our own world-class original content, as well as securing key rights, including multiyear deals with Disney and SANZAR southern hemisphere rugby.

"We want to make the viewing experience even better for all our customers. Following the success of our proven connected home strategy in the U.K. and Ireland, we are beginning to roll this out across our other territories. We now have almost 10 million connected households across the group, driving over 750 million views to our connected services this quarter alone.

"As these results show, we are delivering against a clear set of plans across Europe, and are well positioned for the growth opportunities ahead."

There were 134,000 new customer additions (up 7 percent on the prior year), and 937,000 new paid-for subscription products.

In the U.K. and Ireland, there was customer growth of 77,000, up more than 50 percent year on year and the highest rate of Q1 customer growth for four years. Churn of 9.8 percent was down 110 basis points year on year, its lowest Q1 level for 11 years. Revenue was up 7 percent to £2 billion ($3.1 billion), which drove a 20-percent increase in profit to £358 million ($553 million).

In Germany and Austria, Sky added 94,000 new customers. Churn was down 40 basis points year on year to 9 percent, aided by the impact of 24-month contracts. Revenue was up 11 percent to £336 million ($519 million), though the group recorded a loss of £8 million ($12.4 million) as the result of increased Bundesliga and Champions League costs and the change in amortization profile.

Against a challenging economic backdrop, Italy saw a loss of 37,000 customers. Churn remained at 10 percent. Revenue was down 4 percent to £454 million ($701 million), largely due to lower customer numbers. Profit was down £8 million ($12.4 million) year on year to £25 million ($39 million).