BSkyB’s Good Run Continues With H1 Results

Posting a first half rise in revenues of 17% to £1.8 billion, the satellite broadcaster said that shareholders would receive 2.75p per share. This comes after a long period during which the company elected not to pay out any dividend to shareholders.

Operating profit before goodwill and exceptional items increased by 84% to £283 million and pre-tax profits jumped from £72 million in H1 2002/3 to £246 million this time.

New subscribers The company gained an additional 193,000 satellite subscribers during its second quarter, taking the total to 7.2 million. This is ahead of the 180,000 additions forecast by Merrill Lynch, but slightly behind the 195,000 predicted by Lehman Brothers (see Sky+ Sales Expected To Be Strong In BSkyB Interims). Sky says it remains on track to achieve its target of eight million DTH subscribers by the end of the calendar year 2005.

This continued growth, along with the success of digital terrestrial service Freeview, means that for the first time more than 50% of TV homes now have access to one or more Sky channels.

The proportion of people cancelling their Sky subscription, or churn, remained very low at just 9.4% in the first half. Average revenue per user (ARPU) in Q2 was up 5% year on year and 3% over Q1 to £369.

Sky+ uptake Analysts have been predicting big things for Sky’s personal video recorder (PVR) service, Sky+. The number of subscribers to the system has more than doubled since the launch of a £20 million marketing campaign in October 2003 and stood at 250,000 by the end of the calendar year.

A total of 129,000 new Sky+ customers were added in Q2, significantly ahead of Lehman Brothers’ forecast of 90,000 additions. Sky now remains comfortably on track to hit its target of 315,000 subscribers by the end of June 2004.

Advertising revenues Advertising revenues at Sky rose by 11% to £147 million, significantly outperforming the general market which was broadly flat over the same period. Having already completed the majority of its annual share deal negotiations, the group says it is confident of outperforming the overall advertising market for the remainder of its financial year.

James Murdoch, chief executive BSkyB, said: “These results show a business that continues to improve. We enter our second half with good momentum, robust financial health and a full programme of work.”

Shares in the company were up by 1.0% to 775p by midday today.