BSkyB Is ‘Haven Of Growth’ In Uncertain Media Sector

BSkyB is expected to add 137,000 digital satellite subscribers in the third quarter of its financial year, with steady growth momentum continuing, according to analysts at Merrill Lynch. The broker describes Sky as a ‘haven of growth’ in an otherwise uncertain media sector and remains positive on the satellite group’s outlook.

However, Merrill says that the 137,000 subs growth forecast is difficult to reconcile with the 90,000 growth to around mid-February that was published with the company’s half-year results at that time.

Sky did not specify the exact period that the 90,000 growth covered and also claimed that it was a gross figure (that is, before churn). Merrill’s figures indicate that it was more likely a net figure, but either way it is “hard to reconcile with our Q3 forecasts,” say analysts.

The broker has also raised its full-year customer additions forecast by 30,000, to close at 6.8 million in the financial year-end in June.

Financially, the Q3 results – due on 13 May – are expected to show pre-tax profits up 327% year on year to £49.5 million. Sales are forecast to grow by 12.9% to £799 million, driven by a 13% rise in subscribers and an 11% rise in advertising revenues. Earnings should rise by 36% to £80.7 million, as costs rise more slowly than revenues.

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