Sky rises on better-than-expected results

By David Anderton | Tue, 31/01/2012 - 11:17

British Sky Broadcasting (BSY) shares performed strongly on Tuesday after the company posted better-than-expected half-year results.

The subscription-based television provider announced a 16% rise in first-half adjusted operating profit to £601 million, alongside the addition of 100,000 new households - bringing total project reach to just below 10.5 million customers.

Setting out plans for the year ahead, the company highlighted its plans to add the BBC iPlayer and ITV Player to its Anytime+ product offering - as well as the addition of a new channel dedicated to Formula 1.

"It has been a strong first half with progress on all fronts. While these are tough times for many consumers, our customers are staying loyal and more households continue to join us," said Jeremy Darroch, chief executive of BSkyB. "We expect the environment to remain tough in calendar 2012. No consumer business can be immune to these conditions and we will manage any short-term headwinds as they emerge."

Sky's bundle packages, containing calls, internet and television, have become increasingly popular with a year-on-year growth of 26% bring just over three million customers into the full-service bracket. The broadcaster also reported a positive response to recent product price freezes, enacted in order to tackle customer retention issues in a worsening economic climate.

The company also announced the launch of a new internet-based pay TV service, targeted at the 13 million UK households that do not currently use a subscription service to watch TV, which is set to take advantage of the increasing range of devices consumers own that connect to the internet.

This offering is set to provide on-the-go instant access to Sky Movies on a pay-as-you-go basis. The project will initially offer movies but will also expand to offer sports and entertainment. From a cost basis the web application will not require additional infrastructure investment and is set to reach customers who are not keen to commit to a full-service subscription.

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