BSkyB results for the twelve months ended 30 June 2010

Thursday, 29 July 2010 09:11

Strong operational performance delivering strong financial results. High levels of customer demand continue in the fourth quarter

Net growth of 90,000 to reach 9.860 million customers

Strong take-up of additional subscription products with 958,000 net additions to reach 11.7 million

Another excellent quarter for Sky+HD with 429,000 net additions; reaching 30% penetration

Investment in standout content: multi-year partnership will make Sky the home of HBO in the UK; new slate of original comedy for Sky1 HD; acquisition of Living TV Group completed; HD line-up reaches 43 channels

One in five customers now taking each of TV, broadband and telephony, up 36% year on year; broadband and telephony profitable in the quarter

Increased returns and double-digit growth across the board

Adjusted revenue up 11% to £5,912 million; reported revenue up 10%

Adjusted EBITDA of £1,192 million, up 11%

Adjusted operating profit up 10% to £855 million; reported operating profit up 35% to £1,096 million

Record adjusted basic EPS of 31.1 pence, up 20%; basic EPS of 50.4 pence up 238%

Fourth quarter adjusted operating margin expands to 15.5%, moving through investments in HD and broadband

Adjusted free cash flow up 23% to £626 million; free cash flow including one-off receipts up 69% to £800 million

Full year dividend increased by 10% to 19.40 pence per share, doubled in five years

Jeremy Darroch, Chief Executive, said:

"We've had another good quarter to bring our financial year to a strong close. Customers are choosing Sky in ever greater numbers, not just for TV but across our entire product range.

"High definition goes from strength to strength, with more than twice as many customers as a year ago. At the same time, customers are choosing broader bundles of services, with one in five now taking all three of TV, broadband and telephony. Overall, customers are taking 45% more additional subscription products than a year ago.

"Strong customer demand is increasingly reflected in our financial results, with double-digit growth in each of revenue, operating profit and cash flow. Earnings per share are up 20% to a record 31.1p and we are proposing a further 10% increase in the full year dividend, which has now doubled over the last five years.

"Today we're announcing new plans to bring even more standout content to customers. A multi-year partnership will make Sky the exclusive home of new HBO programming and we're looking forward to a new slate of original UK comedy on Sky1 HD and the launch of 3D TV to residential customers on 1 October. The recent acquisition of the Living TV Group will help us to broaden our entertainment offering still further in the future.

"It has been a good year for Sky but we stay focused on the challenge ahead. The economic outlook remains uncertain and, against that backdrop, we'll pursue the consistent set of priorities that have served us well so far. Executing on these plans will build a larger, more profitable business for the long term."

OPERATIONAL REVIEW

The business performed well in what continues to be a tough consumer environment, with strong demand for our products across the board.

Net customer additions for the quarter to 30 June 2010 ("the quarter") were 90,000, bringing the total base to 9.860 million. Within this, gross additions were 348,000 and churn for the quarter was 10.5%, bringing the figure across the year to 10.3%, flat on the prior year.

We continue to see good success in our multi-product strategy, with net additional subscription product sales of 958,000 in the quarter, taking the cumulative 12 month figure to 3.6 million, up 21%. HD was a key driver of this performance, with net additions more than doubling year on year. In addition we continue to grow our share in broadband and telephony and, today, one in five of our customers takes each of TV, broadband and telephony – from a standing start four years ago. As customers reward us with more of their business, ARPU reached a new high of £508, up 9% on the prior year.