Sky Ends Subscriber Woes With Massive Q2 Rise
Satellite TV giant BSkyB has announced its interim results, pleasing investors with revelations of 192,000 new subscribers in its second quarter, 25% year on year operating profit growth and a 44% increase in earnings per share to 12.1 pence.
The results will be a welcome relief for Sky’s chief executive, James Murdoch, who was the company’s subscriber rate slow dramatically last year as it repeatedly failed to hit self-set targets for growth of 100,000 new customer per quarter (see Sky Profits Rocket Despite Slowing Subscriber Rates).
Commenting on the company’s return to good fortune, Murdoch said: “The business delivered a strong set of financial results in the first half year with good sales and profit growth. During the quarter, we launched a number of important initiatives consistent with the long-term growth strategy we outlined in August 2004. We have a full programme of work ahead of us in 2005, including the continued roll-out of our segmentation project and implementation of new customer management systems.”
He added: “We will continue to develop these and other initiatives in pursuit of our long-term strategic goals and targets.”
Today’s interim results also reveal a strong performance for Sky’s premier entertainment package, Sky+, with households equipped with the PVR technology increasing by 168,000 in the quarter to 642,000.
Sky has placed much emphasis on its PVR system, with Sky Media’s managing director, Nick Milligan, lauding the technology at Media Research Group conference in Madrid (see Sky Introduces New Products At MRG Conference).
The broadcast boss stated that those homes which purchase the product deliver a dramatic reduction in churn, a phenomenon which cable TV operator will soon hope to replicate with its own-branded PVR, specifically designed to put pressure on Sky+ (see Telewest Targets Sky With PVR Set-Top Box).
Elsewhere, Sky saw multiroom households increase by 116,000 in the quarter to 473,000 and increased its total revenue by 10% to £1,945 million. Profit after tax was also up, rising by 18% to £154 million while earnings before goodwill and exceptional items increased by 44% to £234 million.
The broadcaster has also predicted that its average revenue per user (ARPU), one of the key barometers of its profitability, would rise to around £400 by the end of 2005. During a conference call with investors Murdoch said: “On ARPU, we think we’ll continue to progress towards the 400 stg target and we’ll be there or thereabouts by the end of the calendar year. After that, it’s hard to predict due to the future mix of products and customers. We’ll continue to report ARPU, but won’t be benchmarking it against a particular target.”
Sky is due to introduce several new products this year, as well as extending the capabilities of its Sky+ PVR the company has mooted the creation of portable media devices, jokingly referred to as “SkyPods” by Nick Milligan, the devices will capitalise on Sky+ recorded content by making it portable. The company is also developing a wireless radio attachment for its set-top-boxes to allow viewers to enjoy digital radio received through Sky around the house (see Sky Introduces New Products At MRG Conference).
Sky: 08702 40 40 40 www.sky.com
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