30th Apr 2008 07:02
British Sky Broadcasting Group PLC30 April 2008 BRITISH SKY BROADCASTING GROUP PLC Interim Management Statement for the nine months ended 31 March 2008 Customer growth up 10%; revenue growth up 10%; on track for full year Operational Performance: Customer growth in line with targets • Net customer growth in the quarter of 56,000 to 8.888 million - New customer additions of 289,000 - Lowest third quarter churn for four years at 10.5% - ARPU increases to £424 • Total gross product sales of 1.2 million in the third quarter included: - Growth in Sky+ households of 262,000 to 3.393 million - Multiroom growth of 40,000 to 1.571 million - HD growth of 43,000 to 465,000 - Broadband growth of 229,000 to 1.428 million - Sky Talk growth of 180,000 to 1.095 million Financial Performance: Strong top-line growth • Revenue increased by 10% on the comparable period(1) to £3,706 million • Gross margin increased by one percentage point on the comparable period to 65%(2) (excluding exceptional item) • Operating profit of £504 million included £127 million of investment in residential broadband and telephony, £20 million of investment in Easynet Enterprise and an exceptional charge of £17 million • Adjusted operating profit of £521 million(3) reflected strong product volumes • Adjusted earnings per share of 17.0 pence (2007: 19.5 pence); basic loss per share of 6.8 pence includes net exceptional items of £415 million(4) Jeremy Darroch, Chief Executive said: "We are reporting a strong set of results today. We are delivering for customersthrough a combination of great quality, value and service. As a result, morecustomers are choosing Sky, they are more satisfied and they are taking moreproducts than ever before. In the third quarter, despite a difficult consumerenvironment, customer growth increased by 10% on last year and third-quarterchurn was at a four-year low. "The success of our strategy is reflected in our financial performance. Revenuegrowth of 10%, increased quarterly profitability and reducing broadband lossesput us on track to achieve our targets." (1) Nine months ended 31 March 2007 (2) Gross margin in the comparable period excludes a one-off receipt of £65 million from a third party channel provider, accounted for within programming costs (3) Adjusted operating profit for the nine months to 31 March 2008, excludes anexceptional item of £17 million relating to EDS legal costs (4) Net exceptional items include £17 million relating to EDS legal costs, an impairment of £474 million relating to the Group's investment in ITV, a £67 million gain relating to an exchange transaction for National Geographic, £5 million gain relating to mark-to-market in derivative financial instruments that do not qualify for hedge accounting and related tax adjustments of £4 million Enquiries: Analysts/Investors: Robert Kingston Tel: 020 7705 3726Francesca Pierce Tel: 020 7705 3337 E-mail: [email protected] Press: Robert Fraser Tel: 020 7705 3036Bella Vuillermoz Tel: 020 7800 2651 E-mail: [email protected] A conference call for UK and European analysts and investors will be held at08.30 a.m. (BST) today. To register for this, please contact Kirsty Flockhart atFinsbury on +44 20 7251 3801. A live webcast of this call and replay facilitywill be available on Sky's corporate website, http://www.sky.com/corporate. There will be a separate conference call for US analysts and investors at 10.00a.m. (EST) today. Details of this call have been sent to US institutions and canbe obtained from Dana Johnston at Taylor Rafferty on +1 212 889 4350. A livewebcast of this call and replay facility will be available on Sky's corporatewebsite, http://www.sky.com/corporate. Results highlights All financial results have been prepared in accordance with InternationalFinancial Reporting Standards ("IFRS"), including comparatives. Customer Metrics'000s 31-Mar-08 31-Dec-07 Net additions--------------------------------------------------------------------------------Total customers(1)(2)(3) 8,888 8,832 56Additional products:Sky+(4) 3,393 3,131 262Multiroom(5) 1,571 1,531 40HD 465 422 43Broadband 1,428 1,199 229Telephony 1,095 915 180Other KPI's:Churn 10.5% 10.0%ARPU £424 £421-------------------------------------------------------------------------------- (1) Includes DTH subscribers in Republic of Ireland. (548,000 as at 31 March 2008, 535,000 as at 31 December 2007.) (2) DTH subscribers include only primary subscriptions to Sky (no additional Sky+ or Multiroom subscriptions are counted). This does not include customers taking Sky's freesat offering or churned customers viewing free-to-air channels. (3) DTH subscribers include subscribers taking Sky packages via DSL throughTiscali TV. (4) Sky+ includes HD households (5) Multiroom includes households subscribing to more than one digibox. (Noadditional units are counted for the second or any subsequent Multiroomsubscriptions within one household.) Financial Summary (unaudited) 9 months to 9 months to £'millions Mar-08 Mar-07 % change--------------------------------------------------------------------------------Income statement:Revenue 3,706 3,376 10%Gross Profit(6) 2,411 2,223 8% % Margin 65.1% 65.8%Operating Profit 504 613 -18% % Margin 13.6% 18.2%Exceptional operating items(7) (17) 56 -Adjusted operating profit 521 557 -6%Impairment of available-for-saleinvestment(8) (474) - -(Loss) profit for the period (118) 388 -Cash flow information:EBITDA 684 750 -9%Cash generated from operations(9) 614 732 -16%Net debt(10) 1,912 1,810 6%--------------------------------------------------------------------------------Per share information (pence): 9 months to 9 months to Mar-08 Mar-07 % change --------------------------------------------------------------------------------EPS - adjusted(11) 17.0 19.5 -13%(Loss) earnings per share - basic (6.8) 22.1 --------------------------------------------------------------------------------- (6) Gross profit in the nine months to 31 March 2007 includes a one-off receipt of £65 million from a third party channel provider, accounted for withinprogramming costs. Excluding this, gross margin was 63.9% in the comparableperiod. (7) Exceptional operating items include amounts relating to EDS legal costs inboth 2008 (£17m) and 2007 (£9m), and a one-off receipt of £65 million from athird party channel provider in 2007 (8) Impairment of available-for-sale investment relates to an impairment of £474million relating to the Group's investment in ITV (9) Cash from operations for the nine months to 31 March 2007 includes netexceptional receipt of £56 million (10) Cash, cash-equivalents, short-term deposits, net of borrowings and borrowings related financial instruments (11) Adjusted EPS for the nine months excludes £17 million litigation feesrelating to EDS, an impairment of £474 million relating to the Group'sinvestment in ITV, a £67 million gain relating to an exchange transaction forNational Geographic, £5 million gain relating to mark-to-market of derivativefinancial instruments that do not qualify for hedge accounting and related taxadjustments of £4 million OVERVIEW Customer growth continues to be strong despite a difficult consumer environmentand we are on track for our target of 10 million customers in 2010. We continueto focus on quality growth. Increasing new product penetration means that overhalf of our customers now take at least one additional product. A reduction inshort-term viewing package discounts and the implementation of an installationcharge across all products are contributing to the long-term health of thebusiness. While these actions impact gross additions, the benefits can be seenin customer loyalty, with third quarter churn of 10.5% at its lowest level forfour years, and good growth in ARPU, which reached £424. Key operational highlights for the three months to 31 March 2008 ("the quarter")were: • Net customer additions of 56,000 up 10% year on year • The lowest third quarter churn for four years at 10.5% • ARPU of £424 in the third quarter, up 4% year on year • More than half of customers now take an additional product • Sky+ additions of 262,000 increasing penetration of Sky+ to 38% of customers • Sky Broadband additions of 229,000 customers to 1.4 million and Sky Talk additions of 180,000 to 1.1 million customers, maintaining our position as the fastest growing broadband and home telephony provider in the UK The financial performance for the nine months to 31 March 2008 ("the period")was in line with our expectations. Revenue increased by 10% to £3.7 billion,driven by growth in both TV customers and sales of additional products. Adjustedoperating profit of £521 million, a decline of £36 million, reflects ourcontinued investment in residential broadband and telephony, the loss of relatedfees and advertising revenue from the non-carriage of our basic channels oncable, and the additional cost this year of the new Barclays Premier Leaguecontract. Statutory operating profit of £504 million includes £127 millioninvestment in our broadband and telephony services, £20 million of investment inEasynet Enterprise and £17 million of exceptional legal costs. In accordance with IAS 39 "Financial Instruments Recognition and Measurement("IAS 39"), the results for the quarter reflect a further impairment charge of£131 million relating to the Group's investment in ITV plc, taking the total forthe period to £474 million. The impairment charge has been treated as anexceptional item and was determined with reference to ITV's equity share priceat 28 March 2008. OPERATIONAL REVIEW Total product sales exceeded four million in the period, a record level ofdemand, and up by around 40% on the comparable period. Demand for Sky productsremained strong among both existing Sky TV customers and new customers joiningSky. During the quarter, 42% of additions to Sky+, 24% of additions to Sky HDand 41% of additions to Sky Broadband were new customers to Sky. Third quarter net customer additions increased by 10% to 56,000 with improvedchurn more than offsetting lower gross additions, which in the third quarter ofthe prior year benefited from the launch of "See, Speak, Surf". Customer loyaltyis benefiting from specific actions we have taken, with third quarter churn of10.5% at its lowest level for four years. We continue to manage and target ourbusiness towards 10 million customers in 2010. Loyalty and customer satisfaction is also benefiting from strong take-up ofadditional products such as Sky+, Sky Broadband and Sky Talk, with over half ofcustomers now taking an additional product. Sky+ continued to show strong growth, increasing by 262,000 in the quarter, to3.4 million customers or 38% penetration of our customer base. Multiroomhouseholds grew by 40,000 in the quarter, now 18% of the base. Sky HD grew by43,000 to 465,000, 5% of the base. During the quarter, we added a further threechannels to our high definition ("HD") service: Sky Movies Premiere HD, SkySports HD3 and Rush HD. FX HD launched in April, bringing the total number of HDchannels available on Sky to 18, providing customers with a far greater choiceof HD viewing than any other TV platform. Sky Broadband added a further 229,000 customers to take the total to 1.4 million(1) maintaining its position as the fastest growing broadband provider in the UK. As at 31 March 2008, 88% of Sky Broadband customers were on our network and around two-thirds of these on-net customers are taking a paid-for product. For the second year running, the uSwitch "Broadband satisfaction awards" recognised the quality and value offered by Sky Broadband,honouring Sky with the "Best Deal for You" and "Joint Best value for Money" awards. Sky Talk surpassed one million customers during the quarter with net additionsof 180,000 to reach 1.1 million. At 31 March 2008, 57% of Sky Broadbandcustomers also took Sky Talk. Sky Talk also received recognition of its servicein the recent uSwitch "Home Phone Customer Satisfaction Awards 2008". Consumersranked Sky Talk, the newest entrant in the home phone sector, as the besttelephony provider and winner of seven out of eleven categories including "Bestoverall customer satisfaction" and "Most likely to be recommended". As the rapid progress of Sky Broadband and Sky Talk continues, there remains asubstantial opportunity for further growth, with less than one in ten Skycustomers taking the combination of TV, broadband and telephony at the end ofthe third quarter. Our content offering performed strongly throughout the quarter and was supportedby investment in content-focused above-the-line marketing to communicate thebreadth and quality of our programming. The Easter weekend was particularlystrong; Sky Sports achieved its highest ever viewing for the Barclays PremierLeague in its Grand Slam football weekend on 23 March 2008 and Sky One achievedoutstanding audience figures with both original programming and US acquisitions."Ross Kemp in Afghanistan" and US drama "Lost" both consistently achievedaudiences of over one million, while the adaptation of Terry Pratchett's "TheColour of Magic" reached over two million viewers with its first episode, makingSky One the third most watched channel in Sky homes over Easter. During the quarter, Sky Sports secured a new three-year agreement for livecoverage of the UEFA Champions League from the 2009/10 season. Under the newcontract, Sky Sports will show more live matches than ever before, with anincrease in both the number of games and match nights. In addition to the liverights, we have also secured cross-platform rights for mobile and broadband andhighlights packages. During the quarter, Sky made significant contribution in the areas of enrichingprogramming, education, the environment and accessibility of the arts. In April,Sky News was awarded a BAFTA for the quality of its news coverage of the Glasgowairport attack and continues to set the pace of innovation in 24 hour breakingnews. Sky News remains the only British television news service that does notreceive any public subsidy. At the first anniversary of the launch of auto standby, the UK-pioneeredsoftware has been downloaded to more than four million Sky+ and HD set-topboxes. To date, it has saved our customers more than £16 million on theirelectricity bills and 52,000 tonnes of CO2, more than Sky's entire directoperational footprint of 45,555 tonnes CO2. Sky Learning launched 'Sky Learning Explorer' in the quarter, which directscustomers to programming linked to eight GCSEs, seven A-levels and eight adultinterests and passions. Sky has also signed an innovative agreement with OpenUniversity to offer customers free introductory courses. At a time of concern over funding for arts organisations and the price ofattending performances, Sky has provided unique opportunities to attend a numberof cultural events. Through our partnership with the English National Opera,thousands of Sky customers were able to attend a performance for just £5, andhundreds of local school children were offered educational workshops. (1) An additional 28,000 business and professional services were registered to the UK Online service which are not included in this figure FINANCIAL SUMMARY Our financial performance for the period demonstrates strong top-line growth andpositions us well as we exit our 2008 financial year. The underlying strength ofour Pay TV business is helping to offset the expected impact of the new BarclaysPremier League contract and the non-carriage of our basic channels on cable. Inaddition, the peak level of broadband investment is now behind us. EBITDA,excluding exceptional items, remained strong at £701 million, an increase of £7million on the comparable period. Adjusted operating profit was £521 million(2007: £557 million) and statutory operating profit of £504 million included£127 million of investment in residential broadband and telephony, £20 millionof investment in Easynet Enterprise, and exceptional legal costs of £17 million. Revenue Revenue growth remained strong, increasing by 10% year on year to £3,706 million(2007: £3,376 million), driven by continued product and customer growth. Grouprevenue included £176 million from residential broadband and telephony (2007:£41 million), and £130 million from Easynet Enterprise (2007: £117 million). Retail subscription revenue increased by 12% on the comparable period to £2,808million (2007: £2,514 million). Underlying growth was primarily driven by a 5%increase in the average number of DTH customers and ARPU growth of 6% over thenine month period. ARPU increased by £3 from the prior quarter, with theincreased penetration of paid-for products offsetting the £4 decline ofnon-recurring revenue related to the Hatton pay per view event in the secondquarter. Wholesale and advertising revenue reflected the non-carriage of our basicchannels on Virgin Media's cable network. Wholesale subscription revenue fell by£26 million to £136 million (2007: £162 million) and advertising revenuedecreased by £10 million to £248 million (2007: £258 million). Sky Bet revenue of £35 million (2007: £34 million), increased by 3% on thecomparable period, benefiting from the consolidation of 365 Media Group plc(acquired in January 2007) and growth in internet sports betting and TV games.In particular, Sky Poker has performed strongly since its launch in February2007. Installation, hardware and service revenue was £212 million (2007: £167million), up 27% on the comparable period. This increase reflects the stronggrowth in product sales and broadband additions, as well as the addition of astandard installation fee across all products. Other revenue of £267 million (2007: £241 million) increased by 11% on thecomparable period. The majority of this increase was driven by growth in EasynetEnterprise revenues and the first time consolidation of Amstrad (acquired inSeptember 2007). Gross margin Gross profit was £2,411 million for the period, generating a gross margin of 65%(2007: 66%). Excluding the one-off receipt of £65 million from a third partychannel provider in the comparable period, gross margin increased by onepercentage point on the comparable period. Programming costs of £1,295 million (2007: £1,153 million), increased by £142million. Excluding the one-off receipt of £65 million in the comparable period,programming costs increased by £77 million. This increase was primarily due tohigher Barclays Premier League costs and investment in entertainment channels,partially offset by foreign exchange benefits. Other operating costs Operating costs excluding programming, increased by £297 million on thecomparable period to £1,907 million (2007: £1,610 million) and include broadbandand telephony operating costs of £297 million, £150 million of EasynetEnterprise costs and £17 million of exceptional legal fees. Excluding thesecosts, other operating costs increased by £137 million on the comparable period,reflecting continued strong demand for products. Marketing costs for the period increased by £23 million to £569 million (2007:£546 million). This reflected the upfront cost of meeting strong Sky+ demand,higher above the line marketing spend and the costs of servicing an overalllarger subscriber base, partially offset by lower subscriber additions. Thirdquarter marketing costs fell by £7 million with a lower rate of above the linespend in both broadband and pay TV, partially offset by the higher cost ofstrong growth in Sky+ volumes. Subscriber management costs of £548 million increased by £81 million on thecomparable period. This increase was primarily driven by a full nine monthsinvestment in residential broadband and telephony, and the first timeconsolidation of Amstrad. The remaining increase was due to the cost of higheryear on year product sales, which has a corresponding benefit to installation,hardware and service revenue. The remaining other operating expenses increased by £193 million to £790 million(2007: £597 million) primarily due to the inclusion of residential broadband andtelephony and Easynet Enterprise. Administration costs of £395 million includeda £17 million exceptional charge relating to the legal costs of the Group'sclaim against EDS, a full nine-month's of consolidation of Amstrad and 365 Mediacosts and higher depreciation following our investments in infrastructure andsystems. Exceptional items In accordance with IAS 39, following a review of the carrying value of theGroup's investment in ITV plc at 28 March 2008, we have recognised a furtherimpairment loss of £131 million for the quarter, totalling £474 million for theperiod. This was determined with reference to ITV's equity share price at 28March 2008 (the last trading day of the Group's reporting period). As previously reported, in December 2007, Sky effectively exchanged its 50%share in the National Geographic Partnership UK for 21% interests in NationalGeographic Channel (NGC) Network International, LLC, and NGC Network LatinAmerica, which resulted in a gain on disposal of joint ventures of £67 million. The Group reported an exceptional charge of £17 million within administrationexpenses (2007: £9 million) relating to legal costs from the Group's claimagainst EDS, which provided services to the Group as part of the Group'sinvestment in CRM systems software and infrastructure. We currently expect toincur exceptional costs of around £21 million in total for the 2008 financialyear in respect of this claim. Earnings Adjusted earnings per share of 17.0 pence (2007: 19.5 pence) reflected ourinvestment in residential broadband and telephony, higher costs of the newBarclays Premier League contract and the impact of the non-carriage of our basicchannels on cable. Statutory loss per share of 6.8 pence (2007: earnings per share of 22.1 pence)included an impairment charge of £474 million relating to the Group's investmentin ITV, £17 million of legal costs, £5 million gain on mark-to-market ofderivative financial instruments and related tax adjustments of £4 million, anda gain on disposal of a joint venture of £67 million. The issued share capital at the end of the period was 1,753 million (2007: 1,753million). Cash flow The financial position of the Group remains strong, with £614 million ofoperating cash flow generated year to date, which, when combined with existingcash balances is sufficient to meet all of our operating and repaymentrequirements falling due within the current and next financial years. At 31March 2008 the Group had net debt of £1,912 million, including cash and cashequivalents on the balance sheet of £751 million. A working capital outflow of £70 million (2007: £18 million) was higher than thecomparative period due to the new Barclays Premier League contract and otherprogramming prepayments. Capital expenditure was £247 million and included £79million investment in residential broadband and Easynet Enterprise. Acquisitionspend was £71 million, and mainly related to the Group's acquisition of Amstradplc, acquired in September 2007. Use of measures not defined under IFRS This press release contains certain information on the Group's financialposition, results and cash flows that have been derived from measures calculatedin accordance with IFRS. This information should not be read in isolation of therelated IFRS measures. Forward-looking statements This document contains certain forward-looking statements within the meaning ofthe United States Private Securities Litigation Reform Act of 1995 with respectto the Group's financial condition, results of operations and business, andmanagement's strategy, plans and objectives for the Group. These statementsinclude, without limitation, those that express forecasts, expectations andprojections with respect to the potential for growth of free-to-air and pay-TV,fixed line telephony, broadband and bandwidth requirements, advertising growth,DTH subscriber growth, Multiroom, Sky+ and other services penetration, churn,DTH and other revenue, profitability and margin growth, cash flow generation,programming and other costs, subscriber acquisition costs and marketingexpenditure, capital expenditure programmes and proposals for returning capitalto shareholders. These statements (and all other forward-looking statements contained in thisdocument) are not guarantees of future performance and are subject to risks,uncertainties and other factors, some of which are beyond the Group's control,are difficult to predict and could cause actual results to differ materiallyfrom those expressed or implied or forecast in the forward-lookingstatements. These factors include, but are not limited to, the fact that theGroup operates in a highly competitive environment, the effects of laws andgovernment regulation upon the Group's activities, its reliance on technology,which is subject to risk, change and development, failure of key suppliers, itsability to continue to obtain exclusive rights to movies, sports events andother programming content, risks inherent in the implementation of large-scalecapital expenditure projects, the Group's ability to continue to communicate andmarket its services effectively, and the risks associated with the Group'soperation of digital television transmission in the U.K. and Ireland. Information on some risks and uncertainties are described in the "Risk Factors"section of Sky's Interim Report on form 6-K for the period ended 31 December2007. Copies of the Interim Report on form 6-K are available on requestfrom British Sky Broadcasting Group plc, Grant Way, Isleworth TW7 5QD or fromthe British Sky Broadcasting web page at www.sky.com/corporate. Allforward-looking statements in this document are based on information known tothe Group on the date hereof. The Group undertakes no obligation publicly toupdate or revise any forward-looking statements, whether as a result of newinformation, future events or otherwise. Appendix 1 - Customer and Market Data Third quarter as Second quarter as Third quarter as at 31 March 2008 at 31 December 2007 at 31 March 2007 DTH homes(1)(2)(3) 8,888,000 8,832,000 8,492,000 Total TV homes in the U.K.and Ireland(4) 27,156,000 27,093,000 26,837,000 DTH homes as a percentage of 33% 33% 32%total U.K. and Ireland TV homes Cable - U.K.(5) 3,532,000 3,478,000 3,386,000Cable - Ireland 556,000 565,000 566,000 Sky+ homes(6) 3,393,000 3,131,000 2,167,000 Multiroom homes(7) 1,571,000 1,531,000 1,297,000 HD homes 465,000 422,000 244,000 Sky Broadband 1,428,000 1,199,000 457,000 Sky Talk 1,095,000 915,000 355,000 DTT (freeview only) - U.K.(8) - 9,575,000 8,370,000 (1) Includes DTH customers in Republic of Ireland of 548,000 as at 31 March 2008 (2) DTH customers includes only primary subscriptions to Sky (no additional Sky+or Multiroom subscriptions are counted). This does not include customers takingSky's Freesat offering who do not subscribe to an additional Sky service orchurned customers viewing free-to-air channels (3) DTH homes include subscribers taking Sky packages via DSL through Tiscali TV (4) Total U.K. homes estimated by BARB and taken from the beginning of the monthfollowing the period end (latest figures as at 31 March 2008). Total Irelandhomes estimated by Ireland's Central Statistics Office (5) Cable subscriber numbers exclude Tiscali TV and the historic comparatives havebeen restated to reflect this (6) Sky+ homes include HD households (7) Multiroom includes households subscribing to more than one digibox. (Noadditional units are counted for the second or any subsequent Multiroomsubscriptions within one household) (8) DTT homes (Freeview only) estimated by OFCOM. Latest data available is at 31December 2007. Prior year figures have been restated (previously sourced fromBARB) and relate to unique TV households Appendix 2 - Glossary Useful definitions Description Adjusted earnings per share Adjusted profit divided by the weighted average number of ordinary shares during the year. Adjusted operating profit Operating profit before taking account of exceptional items. Adjusted profit for the period Profit for the period adjusted to remove mark-to-market movements in derivative financial instruments that do not qualify for hedge accounting and exceptional items. ARPU Average Revenue Per User: the amount spent by the Group's residential subscribers in the quarter, divided by the average number of residential subscribers in the quarter, annualised. Churn The number of DTH subscribers over a given period that terminate their subscription in its entirety, net of former subscribers who reinstate their subscription in that period (where such reinstatement is within a twelve month period of the termination of their original subscription), expressed as a percentage of total subscribers. Customer A subscriber to a DTH service. DTH Direct-to-home: the transmission of satellite services with a reception through a mini-dish. EBITDA Earnings before interest, taxation, depreciation and amortisation is calculated as operating profit before depreciation and amortisation or impairment of goodwill and intangible assets. Free cash flow The amount of cash generated by Sky after meeting obligations for interest and tax, and after all capital investment and net cash flows relating to our joint ventures and associates. Gross margin Revenue less programming expenses as a proportion of revenue. Gross profit Revenue less programming expense. HD High Definition. Multiroom Installation of one or more additional set-top-boxes in the household of an existing DTH customer. Net debt Cash, cash-equivalents, short-term deposits, net of borrowings and borrowings related derivative financial instruments. On-net Customers subscribing to our unbundled broadband product. Product Any service chosen by a Sky customer. These include DTH, Sky+, Multiroom, Sky HD, Sky Broadband and Sky Talk. Sale A sale is a gross addition of any product. Sky+ Sky's fully-integrated Personal Video Recorder (PVR) and satellite decoder. Underlying Excluding contribution from Sky Broadband and Talk, Easynet Enterprise and exceptional items. Viewing share Number of people viewing a channel as a percentage of total viewing audience. Appendix 3 - Consolidated Financial Information Consolidated Income Statement for the nine months ended 31 March 2008 2007/08 2006/07 Nine months Nine months ended ended 31 March 31 March £m £m Notes (unaudited) (unaudited) Revenue 1 3,706 3,376Operating expense 2 (3,202) (2,763)-------------------------------------------------------------------------------------------|EBITDA 684 750 ||Depreciation and amortisation (180) (137) |-------------------------------------------------------------------------------------------Operating profit 504 613-------------------------------------------------------------------------------------------Share of results from joint ventures and associates 12 9Investment income 38 42Finance costs (127) (108)Profit on disposal of joint venture 67 -Impairment of available-for-sale investment (474) -Profit before tax 20 556------------------------------------------------------------------------------------------- Taxation (138) (168)(Loss) profit for the period (118) 388------------------------------------------------------------------------------------------- (Loss) earnings per share from (loss) profit for the period (in pence) Basic (6.8) 22.1Diluted (6.8) 22.1-------------------------------------------------------------------------------------------|Adjusted basic 17.0 19.5 ||Adjusted diluted 16.9 19.5 |------------------------------------------------------------------------------------------- Consolidated Income Statement for the three months ended 31 March 2008 2007/08 2006/07 Three months Three months ended ended 31 March 31 March £m £m (unaudited) (unaudited) Revenue 1,248 1,156Operating expense (1,039) (938)-------------------------------------------------------------------------------------------|EBITDA 269 264 ||Depreciation and amortisation (60) (46) |------------------------------------------------------------------------------------------- Operating profit 209 218------------------------------------------------------------------------------------------- Share of results from joint ventures and associates 4 3Investment income 19 18Finance costs (45) (39)Impairment of available-for-sale investment (131) -Profit before tax 56 200------------------------------------------------------------------------------------------- Taxation (62) (58)(Loss) profit for the quarter (6) 142------------------------------------------------------------------------------------------- (Loss) earnings per share from (loss) profit for the period (in pence)Basic (0.3) 8.1Diluted (0.3) 8.1-------------------------------------------------------------------------------------------|Adjusted basic 7.3 8.2 ||Adjusted diluted 7.2 8.2 |------------------------------------------------------------------------------------------- Notes: 1. Revenue 2007/08 2006/07 Nine months Nine months ended ended 31 March 31 March £m £m (unaudited) (unaudited) Retail Subscription 2,808 2,514Wholesale Subscription 136 162Advertising 248 258Sky Bet 35 34Installation, Hardware and Service 212 167Other 267 241 3,706 3,376--------------------------------------------------------------------------------- 2. Operating expense 2007/08 2006/07 Nine months Nine months ended ended 31 March 31 March £m £m (unaudited) (unaudited) Programming 1,295 1,153Transmission and related functions 395 278Marketing 569 546Subscriber management 548 467Administration 395 319 3,202 2,763--------------------------------------------------------------------------------- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Sky