BSkyB has reported a before tax downturn of £36 million for the first six months of its financial year to end December, as the value of its almost 18% stake in ITV fell.
For the second half of 2007, revenues were up 11% to just under £2.5 billion, but operating profit dropped a quarter to a better than expected £295 million.
This did not include the £343 million write down on the value of its stake in ITV to reflect the terrestrial broadcaster’s fading share price at the end of 2007.
Last week the government told BSkyB that it must reduce its stake in ITV from 17.9% to under 7.5%. Business secretary John Hutton accepted the Competition Commission’s recommendation to reduce the stake (see Sky Told To Reduce ITV Stake To Below 7.5%).
Sky’s advertising revenue fell by £4 million to £167 million, reflecting that Sky’s basic channels are now not carried on Virgin Media’s cable offering (see Sky’s Profits Could Be Hit By Virgin Channel Row).
Its advertising share for the six months to December 2007 was up year on year by 0.3% to an average of 14.2%.
Sky also today reported that it now has a total of 8.8 million pay-TV customers, with 167,000 net additions made in October, November and December, keeping it on track to hit 10 million by 2010.
The pre-Christmas period is always Sky’s best performing quarter, although take-up was the lowest recorded since Sky became a digital-only service in 2001, down from 183,000 in the same period in 2006.
The company experienced record sales growth of Sky+ boxes, up 16% to 3.1 million. The company said today 3,131,000 households in the UK and Ireland had the service at the end of September, after unprecedented growth of 434,000. This was more than 100,000 up on the earlier record of 327,000, set in the previous quarter.
Sky said it added 64,000 high-definition subscribers, taking its tally to 422,000 at the end of September. Its Sky Talk telephone business grew by a record 236,000 to 915,000.
BSkyB added 260,000 broadband customers to take its total to 1.2 million.
Churn, or the percentage of total customers who dropped their subscription, was reduced to 10%.
Jeremy Darroch, the newly installed chief executive of BSkyB, said: “We have made good progress during the quarter. Our focus on value and quality has delivered a strong level of new customer additions, a 35% year on year increase in product sales, record ARPU, and lower churn. Our business continues to strengthen.
“We enter calendar year 2008 in good shape. A combination of outstanding choice, quality and value leadership leaves us well positioned. An 8% increase in our interim dividend reflects our confidence.”
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