BSkyB cash juggernaut rolls on in Q1 with £1.7BN revs

Joseph O'Halloran | 01-11-2012

Even in a country that has only just dipped out of recession and where discretionary spending has been squeezed considerably, there is absolutely no stopping BskyB which has shown strong Q1 results, markedly up on 2011.
For the first financial quarter of its year ended 30 September 2012, the UK pay-TV giant posted revenue of £1.715 billion, up 4% year-on-year, and EBITDA and operating profits of £392 million and £310 million, up 3% and 5% respectively on the same period a year ago.
BSkyB attributed what it called the ‘robust’ quarterly performance to broad product growth and strong loyalty. In the quarter, the company sold 533,000 more products to 48,000 more customers, and one in three customers now take the BSkyB triple play offering.
Other revenue increased by 4% to £80 million due to higher Sky Bet revenues, the sub licence of a football World Cup qualifying match to ITV and the first time inclusion of revenues from Parthenon Media Group, now rebranded as Sky Vision. These were partially offset by a £4 million reduction in the sale of set-top boxes to Sky Italia.
Programming costs increased by £54 million to £589 million, with over half of these due to the first-time inclusion of Formula 1 and the popular Ryder Cup with a further £3 million associated with additional Olympic feeds on the Sky platform. Entertainment costs accounted for £17 million of the increase.
Furthermore, BSkyB noted the rise of product lines such as the Sky Go service that allows users to watch its content on smartphones and tablets, and the recently launched NOW TV over-the-top (OTT) on-demand service. Unique users of Sky Go were up 75%, confirming, said BSkyB, its leadership in OTT content delivery. In what will surely give the service a kick, BSkyB confirmed that it is planning to add Sky Sports content to NOW TV by the end of the year.
However and perhaps justifying fully the reason to launch the OTT offering to capture the presumed market of 15 million UK TV viewers without a subscription, total pay subscribers continued to plateau. In all BSkyB now has 10.308 million TV customers up by just 95,000 on a year by year basis and just 20,000 up on the previous quarter.
Growth was stronger for Multiroom (2.423 million, up 95,000) and HD in particular which added just over half a million customers to total 4.468 million.
Commenting on the quarter, chief executive Jeremy Darroch said: “We have made a strong start to the year, delivering another good quarterly performance and continuing to position the business for the long term. Our investment in high quality content and innovative services has delivered excellent levels of loyalty and generated good growth in customers and products. At the same time, we continue to drive improvements in efficiency, reliability and customer service throughout our operations.
"This approach continues to generate strong financial results with good growth in revenues and earnings. Looking forward, whilst we continue to see a challenging consumer environment in the UK and Ireland, we are well positioned to execute our plans for the year.”