29th Jan 2016 11:22
LONDON (Alliance News) - Sky PLC said Friday it has reappointed James Murdoch, son of Rupert Murdoch, as chairman, succeeding Nicholas Ferguson, as the television broadcaster reported revenue growth for its first half and strong customer growth in its second quarter.
Murdoch was previously chief executive of Sky between 2003 and 2007 and chairman between 2007 and 2012. Martin Gilbert, chief executive officer of Aberdeen Asset Management, has been appointed deputy chairman. Andrew Sukawaty to replace Gilbert as Sky's senior independent director.
The reappointment of Murdoch, four years after leaving the role amid the News Corp phone hacking scandal, left analysts somewhat puzzled. Jefferies said the move "is obviously an intriguing development".
For the half year to end-December, Sky posted a pretax profit of GBP414 million, down from GBP1.21 billion a year before, mostly as a result of exceptional profits from the sale of the company's stake in ITV PLC in the year comparative period not repeating.
However, operating profit also slipped to GBP524 million from GBP536 million a year before, mostly as a result of costs related to the company's acquisition and integration Sky Deutschland and Sky Italia. Stripping out GBP223 million in costs related to the acquisitions, as well as restructuring charges, operating profit grew to GBP747 million from GBP667 million, beating market expectations.
Revenue rose to GBP5.72 billion from GBP4.30 billion as a result of the enlarged size of the business following the acquisitions of Sky Deutschland and Sky Italia, although this also drove up operating expenses to GBP5.19 billion from GBP3.77 billion.
On a like-for-like basis, including the results of the Italian, German and Austrian businesses for the full prior period, revenue rose 5% to GBP5.72 billion from GBP5.44 billion.
The company added 337,000 new customers across all of its markets during the quarter, taking its total retail customers as of the end of the quarter to 21.48 million, up from 20.61 million a year before.
Sky highlighted a "very strong performance" in the UK and Ireland, adding 205,000 customers, including a further 146,000 television customers. In Germany and Austria, it added 120,000 customers in the quarter and saw revenue rise 10%.
In Italy, the company said it had traded well in a "highly promotional environment", with heavy discounting from competitors and a loss of its Champions League rights. Revenue declined 3% in this market.
Programming costs increased 4%, as the company benefited from the absence of costs for the Ryder Cup and Champions League in Italy and the UK. However these savings were partially offset by a hit from a change in the amortisation profile of content rights in Germany, and investment in programming elsewhere.
Sky proposed an interim dividend of 12.6 pence per share, up from 12.3p a year before.
Looking ahead, the pay-TV company outlined a number of product developments and updates it will roll-out during 2016, including a redesign for its on-demand streaming service NOW TV and a new NOW TV streaming box, as well as its next generation Sky Q suite of products, due to be released on February 9.
"We have had another very strong half as we continue to transform Sky, broadening our business and expanding into new markets and customer segments. This strategy is delivering today and opening up significant growth opportunities for the future. We are pursuing those opportunities with energy and purpose," said Chief Executive Jeremy Darroch in a statement.
"We're excited about 2016 and we start the year with good momentum. With an outstanding set of new initiatives and products for our customers, we are well positioned to deliver further strong growth and returns for shareholders," Darroch added.
Shares in Sky were up 2.0% at 1,062.00 pence Friday morning, one of the best performers in the FTSE 100.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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