BSkyB Results Beat Market Expectations As Subs Hit 6.8m

This is even higher than a revised and upgraded forecast from Lehman Brothers, which claimed that there would be 128,000 additions, ahead of the 100,000 market consensus at that time (see BSkyB Results To Beat Consensus, Says Lehman Brothers). Sky says it is now highly confident of reaching the target of 7 million customers by the end of the 2003 calendar year.

Revenues at the satellite broadcaster rose by 15% across the full financial year to £3.2 billion; revenues specifically from satellite subscriptions were up by 21% to £2.3 billion.

Advertising revenues grew by 13% to £284 million, despite the continuing weak trading conditions which saw the total market rise by just 6% in the period. The group expects this market outperformance to continue for the remainder of the calendar year. Ad revenues comprise 9% of Sky’s total revenues, representing the second largest segment after satellite subscription income.

Significantly, Sky moved into profit for the full year, posting pre-tax profits of £260 million, up from a loss of £22 million last year. This was also above market expectations.

The number of cable subscribers taking up premium Sky channels continues to fall, with cable TV revenues down by 11%. Cable revenues account for 6% of Sky’s total revenue.

Churn – the proportion of people leaving in the period – fell again to 9.4%. It has now been below 10% for four consecutive quarters.

Average revenues per user (ARPU) came in at an annualised £366, up 5% on last year, largely as a result of price increases. Interactive revenues were up by 17% year on year.

Commenting on the strong results, chief executive Tony Ball said: “Over the last five years Sky has grown significantly, doubling its revenues and almost doubling its DTH subscriber base. With only half of households signed up to digital television, there is still plenty of growth potential in the UK.”

Shares in BSkyB were down by 1.2% at 10.00am after a small gains earlier in the morning.