Strong British and German demand boost maiden Sky results

Strong British and German demand boost maiden Sky results
Updated 04 February 2015

Strong British and German demand boost maiden Sky results

Strong British and German demand boost maiden Sky results

LONDON: Strong demand for pay TV in Britain and a record jump in German customers helped Sky Plc post better-than-expected first-half profit in its first results as a European group.
Sky, which formed from the combination of Britain’s BSkyB, Sky Deutschland and Sky Italia to serve 20 million customers in Europe, said it had also seen a significant decline in the number of people leaving the platform.
The firm’s shares rose 3 percent on the back of a 16 percent rise in first-half adjusted operating profit, which puts it in a strong position ahead of a key auction of English Premier League live soccer broadcast rights, which starts later this week.
“Alongside our continued strength in the UK and Ireland, the acquisition of Sky Italia and Sky Deutschland gives us an expanded opportunity for growth,” CEO Jeremy Darroch said. “Both businesses had a strong quarter.”
Having seen off a string of challengers to now dominate its home market, BSkyB in June embarked on a plan to enter Germany, Austria and Italy by buying Rupert Murdoch’s assets in those markets, countries where pay TV is not yet as popular, or profitable.
The first set of results as a combined company showed the group may have got its timing right.
Finance Director Andrew Griffith said Germany was the fastest growing pay-TV market in Europe as customers started to accept the merits of paying for programs instead of just taking free-to-air channels.
Sky added 204,000 new customers in Britain and Ireland in the second quarter, its highest growth in nine years. In Germany, it signed up 214,000 customers, 55 percent more than a year earlier and taking the German retail customer base past the 4 million mark. Italy had its best growth in 12 quarters, helped by fewer customers leaving the platform.
Darroch said the main driver of profit growth had come from Britain, with a small rise in Italy canceling out a small fall in Germany.
In total, Sky posted first-half adjusted operating profit of 675 million pounds ($1 billion), well ahead of forecasts of 644 million pounds in a consensus provided by the company.
Analysts said the strong results should give the shares a lift, following a period in which concerns over how much Sky will have to pay in the British soccer rights auction have weighed on sentiment.
“The strength of this update may cause some upward revisions to the market consensus, which currently stands at a hold,” Hargreaves Lansdown Stockbrokers said.