21st Apr 2015 09:40
(Items published at 0732 and 0833 GMT misstated Sky PLC's operating profit figure, the corrected version follows.)
LONDON (Alliance News) - Shares in broadcaster Sky PLC have hit a 14-year high Tuesday morning, after it posted a rise in operating profit for the first nine months of its financial year, boosted by strong customer growth across its businesses and strong performances from the UK, Ireland and Germany.
The broadcaster posted an operating profit of GBP1.03 billion in the nine months to the end of March, up from GBP854 million a year before, as revenue grew to GBP8.45 billion from GBP8.05 billion.
In the UK and Ireland, revenue was up 6% to GBP5.82 billion from GBP5.49 billion, while revenue in Germany were up 9% to GBP1.04 billion from GBP951 million, offsetting a slight decline in Italy were revenue fell to GBP1.59 billion from GBP1.61 billion.
Sky was expected to post revenue of GBP8.44 billion for the nine months, according to consensus expectations from six analysts provided by the company.
Sky said it had added 242,000 net new customers in its third quarter, taking its total customer base to 20.8 million. Across all three segments of the business, Sky saw a reduction in customer churn on a twelve month rolling basis.
Average revenue per user was flat at GBP47 in the third quarter compared to the previous quarter, after a rise from GBP46 in the second quarter of the year.
On a call with journalists, Chief Executive Jeremy Darroch said that there can often be a lag before customer increases contribute to growth in average revenue per user. Addressing concerns that the company's lower-cost streaming service NOW TV might be hitting average revenue per user, Chief Financial Officer Andrew Griffith said that whilst NOW TV might me slightly dilutive, it is contributing to growth in overall subscriber figures.
Sky said that NOW TV's subscriber base grew 30% on the previous year, although it did not provide comparative figures.
The company said that, whilst it is still "early days", it is making good progress with the integration of Sky Italia Srl and Sky Deutschland AG, and it is on track for its targeted GBP200 million in run-rate synergies by the end of the second full year after the completion of the acquisition.
Sky is planning to launch mobile services with customers through a deal with Telefónica UK Ltd in 2016, in an effort to give it a so-called "quad play" offering, meaning it can offer TV, broadband, mobile and fixed-line telephony. Darroch told journalists that there is "no set date" for the launch, and commented it was more important to get a launch "right" rather than rush it.
Darroch told journalists that Sky's plans in Italy are not "predicated on an economic turnaround", although he cited early signs that the Italian economy is flattening out.
"As these results demonstrate, our teams are working well together right across the new Sky. Five months in, our integration plans are progressing well and we are well positioned for the expanded growth opportunity ahead," said Darroch in a statement.
Shares in the company are trading up 4.2% at 1,096.00 pence, the second biggest gainer in the FTSE 100. The stock last traded this high in February 2001.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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