BSkyB Results Beat Expectations With 6.1m Customers Now Signed
BSkyB’s full-year financial results, released this morning, have beaten analysts’ expectations, with 214,000 subscribers added in Q4, taking the total to 6.1 million.
Average revenue per user rose by 11% to £347, whilst churn – the proportion of people leaving the service – remained stable at 10.5%. This churn level is described by ABN as an ‘industry-leading rate’ and is particularly impressive given that it occurs at a time when 75% of subscribers are outside their initial 12 month contract and ARPU is increasing.
Revenues came in at £2.8 billion, up 20%, whilst earnings before interest, tax, depreciation and amortisation (EBITDA) were £273 million, around £20 million ahead of consensus predictions.
Advertising revenues were down by 7% to £251 million, reflecting the broader downturn in the advertising market. By way of comparison ITV’s advertising revenue in the year to June was down by around 12% overall, according to MediaTel-compiled agency figures.
Interactive revenues increased by 100% to £186 million; £95 million came from Sky’s betting service via interactive television, the internet and the telephone.
A strong position BSkyB is now cash-flow positive and is showing rapidly improving operating margins says ABN Amro. It looks set to easily exceed its 2001-set ARPU target of £400.
However, the Office of Fair Trading (OFT) is currently investigating Sky’s wholesale pricing policy, the results of which could impact the broadcaster’s programming sales policy and in turn impact financials. The results of the OFT enquiry are expected in autumn this year.
Shares in BSkyB were up 33½p at 625½p at 11:00am today.
