BSkyB profit bump puts pressure on News Corp

BSkyB says strong demand for its broadband and high definition television services helped lift profit by 26% in the first-half of its financial year.

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Operating profit increased to £520m in the six months to 31 December, up from £414m in the same period last year.

Net additions for its broadband services totalled 204,000 in the first-half, the fastest growth in more than two years, the media company says, while HD customer numbers increased 68% to 3.5 million.

Across its product and service range, there were 140,000 net additions, taking the company over its long-held 10 million customer target.

The company marketed heavily in the period, marketing-related costs increased by £75 million to £613 million, with big pushes for its broadband services and pay-TV channel Sky Sports.

The strong performance illustrates why News Corp is keen to buy the 61% of Sky it does not already own and why it wants to avoid a six-month probe into competition and plurality concerns.

Culture secretary Jeremy Hunt has given the company time to address these concerns but could still refer the bid to the Competition Commission.

Analysts say that strong results will increase pressure on News Corp to up its £7.8bn bid.

Chief executive Jeremy Darroch says that the company will focus on increasing “value” and offering “better service” in the second-half.

It will launch new channel Sky Atlantic later this week and mobile viewing service Sky Anywhere later this year. Darroch also unveiled plans to open a new contact centre in Sheffield.

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