BSkyB Back In The Black Following Strong Subscriber Growth

BSkyB saw a welcome return to profit in the first quarter of its financial year as it took advantage of the demise of its main pay-TV rival.

The satellite broadcaster today announced pre-tax profits of £43 million for the three months to September. This compares with a deficit of £23 million in the same period last year and is significantly higher than analysts were forecasting.

Subscriber figures also exceeded expectations with 217,000 new customers signing up to BSkyB during the quarter. Lehman Brothers had been predicting growth of 205,000 and negligible profit. Total revenues increased by 13% to £726 million as a result of the subscription boom and an encouraging 12% rise in advertising revenues.

The surge in new subscriptions follows the collapse of the Carlton-Granada venture ITV Digital which haemorrhaged more than a £1 billion during its short life span and was unable to compete in the digital marketplace. Many of its former subscribers are believed to have switched to BSkyB which has also lured customers from the troubled cable firms, NTL and Telwest.

Sky now has a total of 6.3 million subscribers and commands approximately 62% of the pay-TV market in the UK. With the churn rate down to a record low of 9.4%, the company is well on schedule to reach its target of 7 million subscribers by the end of 2003.

“This has been a record breaking quarter for Sky,” said Chief Executive Tony Ball. “These results provide the foundation for continued strong profit growth this year.”