BSkyB breaks £1bn profit barrier, Murdoch continues as chairman

Joseph O'Halloran | 29-07-2011

The whole point of Rupert Murdoch’s protracted, expensive and disastrously unsuccessful bid to fully own BSkyB has been made clear as the UK DTH provider has revealed profits of nearly £1.1 million.

Utterly emboldened by its success, BSkyB’s board has also given unanimous backing to chairman James Murdoch despite being totally embroiled in the News International phone hacking scandal and who faces accusations of giving misleading evidence to a UK Parliamentary committee.

But while on board as chairman, Murdoch has been part of a formidable BSkyB team that in what it called somewhat understatedly described as an excellent year for customers and shareholders ended 30 June 2011 generated a profits of £1.073 billion on the back of revenues of £6.597 billion. These represented respective year on year increases of 23% and 16% in a UK economy that has all but flat lined ion terns of growth and one in which many families, the core audience of BSkyB, have seen cutbacks in terms of disposable income.

In addition to breaking the billion pound profit barrier, BSkyB also broke the 10 million customer mark adding 426,000 new subs in the year to total 10,294 million. However, the key churn metric barely moved, down a tenth of a percentage point to 10.4%.

In terms of products, BSkyB showed a total product growth of 784,000 in the last quarter of the year to total 25.4 million, up 17% year on year. HD continued to be hugely successful for the company with Sky+HD customers growing 30% year on year to reach 3.8 million. Connected TV was given a boost with 2.25 million Sky Multiroom customers, an increase of 129,000 customers on year. Triple play customer were up by 6% top trlal just over a quarter (27%) of the company’s base.

Despite such excellent results CEO Jeremy Darroch, Chief Executive, gave a characteristically grounded and nuanced response to what this mean for the business going forward. ““Sky has had an excellent year of delivery for both customers and shareholders. We have stayed focused on executing our plan and customers have responded by rewarding us with more of their business...With that in mind, we will stay focused on getting better on screen, innovating faster and delivering great value...The business has delivered another strong operational and financial performance despite the challenging economic backdrop...While Sky is not immune to tougher economic conditions, we have continued to see good demand across our product portfolio as customers respond to the great quality and value that we offer.”

Clearly glad to be commenting on good news for a change, James Murdoch added: “This has been a year of outstanding operational and financial results for Sky. It is to the credit of Sky’s first-class management team that the company has continued to deliver throughout the offer period that ended earlier this month.”