Sky bucks downturn to add 94,000 subs

Friday, October 23 2009,

Sky has further bucked the economic downturn to secure 94,000 new customers during the third quarter of this year, including strong growth of its high definition service.

Revenues at the service provider increased by 10% over the three-month period to top 1.38 billion, buoyed by a 15% overall growth in retail subscription revenue.

The addition of 94,000 new subscribers marked an 8% increase year-on-year (factoring customer turnover), with Sky now holding 9.536m customers in total.

Sky also posted 287,000 net additions for its Sky+ HD service - a three-fold increase on 2008 - to reach 1.6m households.

Around 100,000 people signed up to Sky's broadband during the quarter, with 132,000 opting to take its telephony services.

Customers choosing bundled packages - TV, broadband and landline - from the firm now stand at 17% of its base, up by 12% on the previous year.

This strong performance triggered an increase in Sky's pre-tax operating profit by 39.5% to 180m, up from 129m in the same period in 2008.

Speaking about the results, Sky chief executive Jeremy Darroch said: "Our business has made a good start to our 2010 financial year with another quarter of strong results. In what continues to be a tough economic environment, we have increased the number of customers joining Sky.

"High definition has continued to perform very well and more customers are saving money by choosing Sky for each of TV, broadband and telephony. The strong operational performance is reflected in today's financial results."

However, Sky revealed that its programming expenditure grew by 33m over the quarter to reach 439m, mostly due to the additional cost of securing TV rights to Champions League and Scottish Premier League football, along with Rugby Super League.

"We absorbed the short-term costs of customer demand and delivered double-digit revenue growth, 9% growth in operating profit, and 15% growth in EPS," said Darroch.

"As the year continues, we'll maintain a clear focus on our customers and on delivering on our priorities, all with the aim of building a larger, more profitable, and better business."

The company also has high hopes for the expansion of its Sky Player service, which is coming to Xbox 360 this month and IP Vision's Fetch TV next year.