BSkyB profit lift increases pressure on NewsCorp

BSkyB posted a 24% increase in profit for the nine months to March, placing further pressure on News Corporation to increase its bid to take over the company.

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Operating profitincreased to £790m for the financial year to date. Sky added 51,000 new customers in the third quarter, bringing its entire customer base to more than 10.1 million.

Total revenue for the nine months across all products and services climbed 12.8% year on year to £1.65bn

The average amount spent per customer increased 8% to £544 per year as over a quarter now sign up to all three products: TV, telephone and broadband.

Advertising revenue increased 41% to £348m, which the broadcaster says benefited from its increased share of the TV advertising sector and the consolidation of the sale of airtime on Living TV.

Marketing spend increased by £69m to £893m including major campaigns to launch video on demand product Sky Anytime+ and new channels Sky Atlantic and Sky Living. The broadcaster is set to spend more than £1bn on marketing for the year.

BSkyB chief executive Jeremy Darroch says the business delivered a good performance despite a “tough consumer environment” and adds that the outlook will remain cautious for the rest of the calendar year.

News Corp is currently waiting for culture secretary Jeremy Hunt’s clearance on its bid to take over the 61% of BSkyB it does not already own. Hunt is expected to announce his decision to approve the deal “imminently”.

Another strong financial performance by BSkyB will heap more pressure on Rupert Murdoch’s company to increase its initial offer of 700p per share, equivalent to £7.8bn.

Analysts expect News Corp will now have to pay 850p per share in order to acquire the group.

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