Sky profit dips as subscriber figures rise

BSkyB has added 92,000 subscribers during the quarter to take its total base to 8.98 million viewers, but its operating profit has fallen 11% year-on-year for the 12 months to the end of June. Sky says subscriber growth in the last quarter was its highest for five years.

The media company’s operating profit was £724m compared to £815m in the previous 12 months. However, Sky revenues increased 9% year-on-year to £4.9bn. Sky took a £616m writedown on the value of its holding in ITV, based on the commercial broadcaster’s share price on June 27 of 47.5p. It paid £940m for the 17.9% stake in November 2006.

Sky says the appeal of its digital TV recorder Sky Plus is drawing new customers, with more than half of new customers added during the quarter taking it. Annualised churn also fell to its lowest level in three years, by more than two percentage points year-on-year to 9.8%. The number of broadband subscribers grew 200,000 during the quarter to 1.63m.

Chief executive Jeremy Darroch says: “We have continued to grow strongly in a more difficult consumer environment. More customers are choosing Sky for a broader range of products and are staying with us for longer.”

However, Sky is gloomy about advertising revenues. The company says it expects an overall decline in the TV advertising market in the second half of 2008. Sky’s ad revenues fell 7% year-on-year to £328m and wholesale revenues from other operators for Sky Channels fell 13% to £181m.

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