BSkyB breaks £1 billion profit barrier
BSkyB has reported pre-tax profits of £1 billion in the year to the end of June, as the company announced a £750 million share buy-back to appease investors following News Corporation’s failed attempt to take full control of the satellite broadcaster.
BSkyB, which also announced today that it will share the live rights for Formula One from 2012 to 2018 with the BBC, said that Rupert Murdoch’s News Corp will participate in the share buy-back programme but that its 39.1% stake in Sky will remain unaffected.
The broadcaster reported a revenue increase of 16% to £6.6 billion in the year, with earnings before interest, tax, depreciation and amortisation up 19% to £1.4 billion.
The company’s full-year operating profits increased 23% to £1.07 billion – allowing the company to break to £1 billion profit mark for the first time in its history.
The company also announced a 20% rise in the full-year dividend to 23.28p, and a final dividend of 14.54p – a total cash payment of £253 million.
“This has been a year of outstanding operational and financial results for Sky,” said James Murdoch, who was given unanimous backing to remain as chairman after a board vote on Thursday, despite his involvement in the phone-hacking crisis surrounding News International.
Although Jeremy Darroch, the BSkyB chief executive, said: “The issues around News of the World were appalling and unacceptable… there are a number of inquiries going on and they will establish the facts. [The] board will have a watching brief on all aspects of our business, including externally.”
In response to claims that the BSkyB board is too heavily controlled by News Corp, Darroch said: “The majority of the board are independent directors, in terms of voting they control the board.” He announced the departure of two directors – Allan Leighton and David Evans, who will retire later this year.
BSkyB has net debt of £750 million (as at 30 June).
BSkyB added a total of 71,000 customers in the quarter to the end of June, and 426,000 for the 12-month period, taking the total customer base to 10.3 million.
The company said that it added 40,000 TV customers for the three months to the end of June and 327,000 for the year.
BSkyB added 174,000 broadband customers in the quarter – Darroch claimed that the company attracted 73% of all the net additions of UK households who signed up for a broadband service from a provider in the quarter – and 711,000 for the year.
However, the company saw its ARPU drop for the first time in five years during the quarter – down £5 to £539.