BSkyB Adds 150k New Subs In Q3, Strong Financials

Analysts had predicted that there would be between 137,000 (Merrill Lynch) and 153,000 (Morgan Stanley), with Lehman Brothers forecasting 145,000 (see Morgan Stanley Expects 153k New Sky Subs In Q3). The group now has 6.7 million satellite customers and is on schedule to hit its target of 7 million subs by the year-end.

Churn – the proportion of customers leaving the service – fell to a record low of just 9.3%, despite the introduction of price increases during the period. Average revenue per user (ARPU) rose by 7% to £364 per year.

Pre-tax profits at the group reached £65.8 million, ahead of Merrill Lynch’s forecast of £49.5 million (see BSkyB Is ‘Haven Of Growth’ In Uncertain Media Sector). Revenues were also ahead of expectations at £838.1 million. Merrill had forecast £799 million and Lehman Brothers £800 million.

Advertising revenues at Sky were also healthy, up by 15% to £204 million in the nine months to 31 March. Operating profits rose by 96% to £254 million.

Commenting on the results, chief executive Tony Ball said: “We are reporting another strong set of results today. In what is normally a quiet period we have delivered healthy subscriber growth and an operating profit which has almost doubled year on year, thanks to strong revenue growth and sustained cost control. We remain on track to hit all of our targets.”

Shares in BSkyB were up by 0.5p at 681.5p by mid-morning today.