BSkyB reports slower revenue growth with annual 4.5% increase

British Sky Broadcasting (BSkyB) suffered a slowdown in revenue growth in the year to the end of June, reflecting slowing customer additions and the satellite operator’s price freeze from the previous year.

Revenues climbed 4.5 per cent over the year to £6.79 billion against a 16 per cent rise in the 2011 financial year.

The group reported a 14 per cent jump in operating profits to £1.2 billion. Premier League audiences were up 12 per cent year on year, BSkyB said, with the Manchester City and Manchester United derby bringing in a record 4.29 million viewers.

It added 312,000 customers during the year, against 426,000 in the previous financial year, bringing its total to 10.6 million households in the UK. The annual rate of customer lossedged down to 9.9 per cent, lower than analysts’ expectations of 10.5 per cent.

“In tough economic conditions, our customers are staying loyal to us and taking more services from us,” said BSkyB chief executive Jeremy Darroch.

This improvement in customer loyalty combined with a jump in pre-tax profit encouraged the satellite broadcaster to boost its full-year dividend and launch a £500 million share buyback. The new share buyback scheme would bring the total shares acquired by the group since 2005 to £2.3 billion.

Rupert Murdoch’s News Corp, which has a 39 per cent stake in the pay-TV group, has agreed to participate in the buyback on a pro-rata basis – thereby not increasing its equity share in BSkyB and avoiding action by the takeover panel. BSkyB’s buyback is the second in the past year, following last July’s decision to return £750 million to shareholders after the collapse of News Corp’s bid to take full control of the satellite broadcaster.

The satellite broadcaster’s results coincided with well-received interim results from ITV. The commercial broadcaster reported revenues up 10 per cent to £1.13 billion in the first half, despite a slowing advertising market. – Copyright The Financial Times Limited 2012