First profit for BSkyB since 1998

BSkyB recorded its first annual profit in five years yesterday as a result of strong subscriber and revenue growth in both Britain and the Republic in fiscal 2003.

The firm said 7,000 new Irish customers had signed up for Sky television in the three months to the end of June, bringing its total subscriber base to 286,000.

BSkyB does not publish separate Irish results but, based on the firm's average revenue per user figure for all its operations, Sky is generating annual revenues worth almost £100 million sterling (€142 million) from its Irish subscribers.

Mr Mark Deering, Sky Ireland's managing director, said Sky believed there was still significant growth potential in the Irish market.

"We now have 286,000 subscribers in the Republic, up from 245,000 customers this time last year," said Mr Deering.

"Ireland enjoys the second-highest digital television penetration rate in Europe, the vast majority of subscribers having opted for Sky Digital."

BSkyB, which is part of Mr Rupert Murdoch's global satellite empire, reported strong results for its British and Irish operations.

The firm said its pre-tax profit, excluding goodwill, amortisation and other items, for the year to June 30th was £260 million, up from a loss of £22 million a year earlier. Sky's subscriber base for its satellite platform increased by 133,000 in the quarter to 6.8 million, and remains on target to reach seven million by late 2003.

Turnover grew 15 per cent to £3.19 billion, beating the mean analyst estimate of £3.16 billion.

Earnings before goodwill and exceptional items grew to 10.5p per share, up from a loss of 2.7p at the same time last year.

BSkyB chief executive Mr Tony Ball said Sky should hit the seven million subscriber mark "within weeks" and set a new target of eight million subscribers by the end of 2005.

With the company's digital roll-out complete, its competitors in disarray and its debt load shrinking, BSkyB looks ready to rake in the cash, analysts said.

"For the first year of moving back into profitability, it's quite a big move, and I'd expect to see quite a bit more of it," said Mr Kingsley Wilson, a media analyst with Investec Securities.

Last week Sky won all four packages offered by the English football Premier League for three years from the start of the 2004/2005 season. It paid £1.024 billion for 138 games, below the £1.1 billion it paid under the current contract for fewer games.

The European Commission has asked the Premier League about the bidding process and how Sky won all the packages on offer.

(Additional reporting Reuters)