BSkyB H1 rev up 6% to ?3.4 bn

MUMBAI: UK pay TV service provider BSkyB has posted a revenue of ?3.4 billion for first half of the fiscal ended 31 December 2011, up six per cent over the earlier year.

BSkyB reported its highest ever first-half adjusted operating profit, up 16 per cent to ?601 million.

Efficiency programmes delivered lower operating costs. Adjusted operating margin was up 160 basis points to 17.9 per cent. Adjusted free cash flow was also up by 12 per cent to ?495 million.

BSkyB experienced continued growth in products and customers in the quarter. Total net product grew to 26.8 million, up 13 per cent. It added 100,000 new households to reach 10.471 million customers.

BSkyB said it had a good response to price freeze; customer loyalty was strong in a tough economic environment with
churn of 9.6 per cent. There was also a continued improvement in product mix with more than three million customers taking all three of TV, broadband and telephony, up by 26 per cent year on year. Customers are responding to innovation with 2.5 million users of Sky Go to date.

Plans for 2012: The company is bringing more content for customers, including home grown comedy and drama and a new channel dedicated to Formula 1.

BSkyB has done agreements to add BBC iPlayer and ITV Player to Anytime+. It is also offering free access to 10,000 WiFi hotspots to Sky Broadband Unlimited customers. Fibre broadband will be available to 30 per cent of UK households from April, offering up to 40Mb broadband speeds and unlimited usage for ?20 a month.

BSkyB will also launch a new Internet based pay TV service aimed at new customers. It will create 1,300 Sky jobs across the UK and Ireland over the next two years.

Sky CEO Jeremy Darroch said, ?We expect the environment to remain tough in calendar 2012. No consumer business can be immune to these conditions and we will manage any short-term headwinds as they emerge. Staying focused on the long-term opportunity, we?ve got a strong set of plans to keep delivering for customers and shareholders. This will be an outstanding year on screen, including more original British productions and a new channel dedicated to Formula 1, and we have exciting products in the pipeline that will create more ways to access our content and more reasons to join and stay with us.?

The company delivered a strong first half performance with good growth in customers and products and record financial results.

"We saw growth in every product category, with a particularly strong performance in home communications. As a result, customers are now taking an average of 2.6 products, up 13 per cent on last year, and Arpu continues to rise, reaching a new high of ?544," said Darroch.

Outlook: Sky does not expect any material improvement in the macro backdrop in calendar 2012, with strong consumer headwinds anticipated in the early part of the year.

"While remaining cautious in respect of the economic outlook, we continue to expect that the strength and flexibility of our business will deliver further progress. Our growth will stay broadly-based, increasing product penetration and adding new households where it makes sense. We will also continue to invest in core areas for customers and we have a strong set of plans for the year ahead, including more great content, a strong product pipeline and the launch of an entirely new internet based pay TV service aimed at new customers. Alongside that, we will maintain our focus on operating efficiency because this underpins our ability to keep investing for customers," said Darroch.