Strong profits for BSkyB in tough market
BSkyB has released its unaudited results for the three months ending 30 September 2011, showing overall revenue growth of 9% to £1.66 billion, with adjusted operating profit up 16% to £295 million.
With the financial situation in the country it has become harder to attract new subscribers to the company, so in recent quarters, it has shifted its focus from trying to add new subscribers, to focusing on cross-selling products and this has helped the business post strong growth in first-quarter profits.
Sky sold a total of 683,000 additional products in the quarter and added 77,000 new customers, while more than 1.6m customers signed up to Sky Go in its first three months since launch.
| As at 30-Sep-2011 | As at 30-Sep-2010 | Growth | Quarterly Growth to 30-Sep-2011 | |
|---|---|---|---|---|
| Products | ||||
| Total Products | 26058 | 22586 | 3472 | 683 |
| TV | 10213 | 9956 | 257 | 26 |
| HD | 3925 | 3154 | 771 | 103 |
| Multiroom | 2295 | 2158 | 137 | 45 |
| Broadband | 3485 | 2802 | 683 | 150 |
| Telephony | 3248 | 2570 | 678 | 147 |
| Line Rental | 2892 | 1946 | 946 | 212 |
| Customers | ||||
| Total Customers | 10371 | 9979 | 392 | 77 |
| Other Metrics | ||||
| Customers taking each of TV Broadband and Talk | 28% | 23% | 5% | n/a |
| ARPU | £535 | £510 | £25 | n/a |
| Churn (quarterly annualised) | 11.10% | 11.20% | n/a | n/a |
Jeremy Darroch, chief executive of Sky, commented: “In tough market conditions, our move to more broadly based growth and multiple products is serving us well. New customers are choosing Sky over other providers, existing customers are taking more from us and our financial performance is accelerating, with another quarter of double-digit growth in operating profit, EPS and free cash flow.”
Analysing the figures, Daniel Kerven at BankofAmerica Merrill Lynch comments: “Sky sold 683,000 additional products with strong growth in home communication products driven by Sky’s value proposition, the benefits of a single bill and Sky Anytime+, with triple play penetration of the base reaching 28%.
“Importantly, total home additions were 77k, and included 51k standalone broadband homes (either gross adds or triple play subs spinning down from TV). Standalone broadband allows Sky to maintain profitable customer relationships in difficult market conditions, with the opportunity to upsell in the future.
“The economy has hit subscription sales. In the three months to September, it added 26,000 new customers against the 96,000 signed up in the same period in the previous year. Net households (boosted by broadband) went up by 77,000, to reach 10.4 million overall.”
As the BBC’s Robert Peston pointed out on Twitter this morning: “Sky taking £535 on average from each of its 10.4m customers, rise of 5%. Striking performance when disposable income squeezed remorselessly”