BSkyB Breakeven Moved Back To 1995

BSkyB is not expected to achieve pre-tax breakeven until 1995, according to a new report by stockbrokers James Capel based on BSkyB’s first full year accounts since the merger of Sky and BSB in 1990.

Turnover was put at a disappointing £288m, some £40m lower than forecast, even though losses through the year had been greatly reduced – £758m was lost in the first 37 weeks of the period since the merger, compared with £188m for the year to June 1992. It is predicted that losses will fall this year to approximately £99m, leading up to a profit in 1995 of £44m. Capel’s assessment of the company’s value remains unaltered, despite continued loss, at £2.1 billion.

As turnover increases BSkyB, along with other cable and satellite operators face higher licence fee demands from the ITC, which bases rates on subscription and advertising revenues, rather than the old Cable Authority system of paying according to the costs of the regulation. BSkyB is currently planning legal action against the ITC over what it considers to be exorbitant fees. It believes that as turnover increases operators will end up paying up to £10m per year; fees for this year are expected to be only £1.5m