BSkyB boasts 4.5% revenue rise
BSkyB has released its results for the 12 months to the end of June, with 631,000 additions to reach a total of 28.4 million. The broadcaster added 57,000 new Sky households, including 37,000 standalone home communications customers and 20,000 TV customers.
Sky customers are now taking an average of 2.7 products each, double the level of five years ago. ARPU increased by £10 on last year to £548. Sky posted a quarterly annualised churn of 9.9%. The broadcaster added 138,000 broadband, 141,000 telephony and 187,000 line rental products. As a result, Sky closed the year with 3.4 million triple play customers, up 21%.
Group revenue increased by £194 million to £6,791 million – with like-for-like revenue up 4.5%. Retail subscription revenue increased to £5,593 million, with subscription revenue up 4%. However, advertising revenue was 4% lower year on year at £440 million (2011: £458 million). Looking ahead, Sky expects TV advertising to remain challenging and forecasts an overall market decline in the second half of 2012.
Results highlights include:
- Revenue up 4.5% to £6.791 billion on a like-for-like basis
- Record adjusted operating profit of £1.223 billion, up 14% with continued margin expansion to reach 18.0%, the highest level for six years
- Adjusted basic EPS up 22% to 50.8p
- Full year dividend increased by 9% to 25.4p per share
- Additional £500 million capital return to shareholders via share buy-back
Operational growth
- Total products increase by 12% to reach 28.4 million
- 10.6 million customers – up 312,000 on the prior year
- Churn of 9.9% in the quarter
- Four million customers choose Sky Broadband
- Largest and fastest growing triple play customer base in Britain at 3.4 million, up 21%
Customer experience
- New rights renewals for Spanish football, British and Irish Lions rugby and Premier League
- A second brand, NOW TV, launched on 17 July to give millions of people access to Sky content
- Bringing a full suite of Sky services to Irish customers with the launch of Sky Broadband and Talk later this year
- Extending Sky Go with eight kids’ channels now available including Disney and Nickelodeon; access to 32 live channels and a broad range of on demand content
- Free-to-air catch-up service to launch in the autumn to include BBC iPlayer, ITV Player and Demand 5; Sky Anytime+ surpasses one million homes, up 57% on last quarter
Jeremy Darroch, chief executive, said: “We have delivered record financial results after another year of strong operational growth. Our consistent approach of investing where it matters most to customers and improving efficiency behind the scenes is working extremely well.
“In what remains a tough economic environment, customers are choosing Sky over other providers. We’ve continued to add new households and existing customers are remaining loyal and taking more products from us. More than nine million homes are now choosing to watch their TV through Sky+, we’re helping more customers to save money in home communications and innovative services like Sky Go are adding even more value to their subscription.
“We continue to transform our financial performance through discipline on costs combined with strong revenue growth from three million product additions and over 300,000 new Sky households during the year. We have delivered double-digit growth in operating profit, free cash flow and EPS, which has now doubled over the last four years. On the back of this sustained strong performance we are increasing returns to shareholders with the eighth consecutive year of growth in the ordinary dividend and we intend to seek approval for a further £500 million of share repurchases.
“Looking ahead, we will continue to deploy capital consistently to achieve our goals. We will invest sensibly in areas where customers see value – in getting better on screen and improving our products and services – and maintain a strong focus on operating efficiency and cost control to underpin our investments and deliver increasing returns for shareholders.
“This month, we have seen how our growth is leading to positive results for the UK as a whole. First, our contribution to the wider UK economy has been quantified in a new report by independent consultants Oxford Economics. It finds that Sky contributes over £5 billion a year to UK GDP, and supports nearly 120,000 jobs and a £2.3 billion contribution to tax revenues. In the last 12 months, we have created 2,200 new permanent jobs at Sky as we continue to invest in customer service, programme production and technology innovation.
“Second, we are proud to have played our part in the wonderful achievement of Team Sky and Bradley Wiggins, who created sporting history this week by becoming the first British winner of the Tour de France. Our support for Team Sky forms part of our broad partnership with British Cycling to get more people cycling regularly through inspiration from elite success and participation in grassroots activity, including our successful programme of Sky Ride events.
“These are good examples of the important economic and social contribution that a successful British company can make and we hope to do even more in the future.”
Read the full Sky results statement here.