BSkyB pre-tax profits rise 8% to £1.69 billion
UK’s largest broadcaster unveils box to link television to internet as competition increases
BSkyB fought back against intensifying competition today by launching a TV box allowing viewers to watch on-demand services. Photograph: David Jones/PA Wire
British Sky Broadcasting Group, the UK’s largest pay-TV broadcaster, unveiled a box to link televisions to the internet and said it will buy back £500 million (€580 million) of shares as full-year sales grew.
Revenue for the year rose 7 per cent to £7.24 billion. Earnings before interest, taxes, depreciation, amortization and some items in the year ended June 30th rose 8 per cent to £1.69 billion pounds, the Isleworth, England-based company said in a statement today.
BSkyB relies on exclusive sports broadcasts and premium movie channels to retain and win subscribers. The company has 14.8 million retail and wholesale customers, a 3.9 per cent increase from the year prior.
BSkyB, about 39 per cent owned by Rupert Murdoch’s 21st Century Fox, unveiled its NOW TV set-top box to connect a TV wirelessly to the Internet, in a bid to reach millions of UK homes that don’t have a pay-TV service.
“The strength of our financial performance is a result of our successful transition to more broadly-based growth and sustained investment,” chief executive Jeremy Darroch said in the statement. The “consumer environment” would remain challenging in the next year, he said.
The shares fell 1.9 per cent to 833.50 pence as of 8.17 am in London. BSkyB’s market value is £13.3 billion.
BSkyB said today it was also increasing its full-year dividend 18 per cent to 30 pence a share. The company, which offers TV, Internet and phone service separately or bundled together, said customers are taking an average of 2.8 paid-for products from Sky and average revenue per user rose £29 in the year to £577.
BSkyB is facing tougher competition on several fronts. BT Group Plc, the biggest fixed-line phone company in the UK, unveiled sports channels in May free for BT broadband customers.
BT said yesterday some 500,000 households have ordered BT Sport, set to debut on August 1st. BSkyB has fought back, bringing on David Beckham to star in a new Sky Sports ad campaign.
It will also broadcast matches on the first day of the Premier League’s soccer season next month free to customers who don’t subscribe to its sports channels already.
“We’ve seen an explosion in on-demand and mobile viewing as more people connect their Sky boxes to broadband and watch TV on laptops and mobile devices with Sky Go,” Mr Darroch said.
Sky Go Extra, the company’s subscription service where users can watch Sky on their mobiles and laptops, had 166,000 customers at the end of the year, five months after it started.
BSkyB also reported a “fivefold” increase in on-demand downloads, it said.