News Column

British Sky Broadcasting Group PLC Q3 2012 Results

May 2 2012 12:00AM



MIDDLESEX, UK -- (Marketwire) -- 05/02/12 --

BRITISH SKY BROADCASTING GROUP PLC Unaudited results for the nine months ended 31 March 2012 Adjusted results Reported resultsNine months to 2012 2011 Variance 2012 2011 Variance31 MarchRevenue GBP5,078m GBP4,833m +5% GBP5,078m GBP4,833m +5%EBITDA GBP1,161m GBP1,030m +13% GBP1,192m GBP992m +20%Operating profit GBP908m GBP790m +15% GBP939m GBP752m +25%Earnings per 37.8p 30.5p +24% 39.7p 30.3p +31%share(basic) CONSISTENT EXECUTION DELIVERING STRONG GROWTHStrong financial performance* Revenue up 5% to GBP5.1 billion* Adjusted operating profit up 15% to GBP908 million* Adjusted operating margin expansion of 160 bps to 17.9%* Adjusted basic EPS up 24% to 37.8 pence* Completed GBP387 million of GBP750 million buyback programmeBritain's favourite triple play provider* Total quarterly net product growth of 904,000 to 27.7 million* 78,000 net new households in the quarter to reach 10.55 million customers* Largest base of triple play customers in Britain at 3.2 million, up 24% year-on-year* Strongest ever quarter for home communications with 702,000 net broadband, telephony and line rental product additionsConsistently delivering the best experience for customers* Ensuring continued excellence in sports coverage with successful launch of Sky Sports F1 HD and new long term agreements in golf and cricket* Bringing the best HD and 3D experience of the Olympics to Sky customers* Leading broadband service getting even better with free out-of-home WiFi and launch of fibre products* Huge choice of on demand content extended and now available to over five million Sky TV homes* NOW TV on track for launch in first half of calendar 2012, widening the availability of Sky content on broadband-connected devicesResults highlightsCustomer Metrics (unaudited) Quarterly As at As at Annual Growth to 31-Mar-12 31-Mar-11 Growth 31-Mar-12Total products ('000s) 27,734 24,591 +3,143 +904 TV 10,268 10,147 +121 +15 HD 4,222 3,686 +536 +159 Multiroom 2,378 2,237 +141 +28 Broadband 3,863 3,161 +702 +212 Telephony 3,627 2,916 +711 +220 Line rental 3,376 2,444 +932 +270Total customers ('000s) 10,549 10,223 +326 +78Products per customer 2.6 2.4 +0.2Other metricsCustomers taking eachof TV, broadband & talk 31% 26% +5%ARPU (1) GBP546 GBP537 +GBP9Churn (quarterlyannualised) 10.1% 10.4%An additional KPI summary table containing further detailed disclosuremay be found in Schedule 1.Business Performance(2)(unaudited)GBP'millions 9 months to 9 months to 31-Mar-12 31-Mar-11 MovementRevenue 5,078 4,833 +5%Adjusted operating profit 908 790 +15%% Adjusted operating profitmargin 17.9% 16.3% +160 bpsAdjusted EBITDA 1,161 1,030 +13%Adjusted free cash flow 601 615 -2%Adjusted basic earnings pershare (3) 37.8p 30.5p +24%(1) Quarterly annualised. Calculations have been restated to include customers taking standalone home communications products and to reflect the impact of the Sky magazine closure.(2) A reconciliation of adjusted operating profit and adjusted EBITDA from continuing operations to reported measures as well as cash generated from continuing operations to adjusted free cash flow from continuing operations is set out in Appendix 3.(3) Adjusted basic EPS is calculated from adjusted profit from continuing operations for the period. A reconciliation of reported profit from continuing operations to adjusted profit from continuing operations is set out in note 4 to the consolidated financial information.Jeremy Darroch, Chief Executive, commented:"We have made a good startto 2012. In what remains a tough economicenvironment, strong and consistent execution of our plan has deliveredgood growth across our product range. We have grown revenues by 5%while holding prices flat for customers and delivered a recordnine-month operating profit of GBP908 million alongside 24% growth inearnings per share. The decision to focus our marketing on homecommunications has paid off with our fastest quarter of growth sincelaunch and confirmation that Sky is now Britain's favourite triple playprovider."More households are choosing Sky and taking more products from usbecause we're constantly looking to improve the quality and value thatwe offer. Already in 2012, we've launched an entirely new channeldedicated to Formula 1, given millions of households access to a hugechoice of on demand TV and made our market-leading broadband serviceeven better with the launch of our fibre products and free out-of-homeWiFi. Looking ahead, we will continue to improve our service for allSky customers as we believe this is the best way to build a largerbusiness and continue to increase returns for shareholders."OVERVIEWWe have once again delivered a strong operational and financialperformance in the third quarter and first nine months driven by oursustained customer focus and the growing breadth of our product range.We are continuing to add to the customer experience through ourinnovation while maintaining our tight focus on costs. This hascontributed to double digit growth in adjusted operating profit, growthin adjusted basic earnings per share of 24%, and expansion of ouradjusted operating margin by 160bps to 17.9%.Consumers are still facing a tough economic environment but customersare continuing to take more products from us as they recognise thegreat quality and value that Sky offers. We had our strongest quarterever for home communications with 702,000 net product additions and Skyhas now become Britain's favourite triple play provider. Net productadditions of 904,000 in the three months to 31st March 2012 ("thequarter") were higher than both the prior year and the second quarter,and took the total base to 27.7 million, up by 13% year on year. Withinthis growth, we added 78,000 net new customer households. Churn at10.1% was slightly lower than the prior year.This operating performance has allowed us to deliver another strong setof financial results. Revenue growth was 5% in the first nine monthsdespite freezing prices for customers and this, combined with our focuson efficiency, translated into 15% growth in adjusted operating profitand 24% growth in adjusted basic EPS. In addition, we have returnedGBP387 million to shareholders to date through our on-going GBP750million share buyback programme.OPERATIONAL REVIEWOperational PerformanceWe added 904,000 total net products in the quarter, growing the base by13% year on year to reach a total of 27.7 million products. Withinthis, weadded 78,000 net new households with 63,000 new standalonebroadband customers and 15,000 TV customers. Our total customer base isnow 10.55 million, of which 281,000 are standalone broadband customers.We have delivered growth across all product categories and customersare now taking an average of 2.6 products each, double the figure offive years ago.We are continuing to see strong demand for home communications withrecord net new product additions of 702,000 during the quarter,including 212,000 broadband, 220,000 telephony and 270,000 line rentalnet new customers. Our continued strong growth in home communicationshas taken the number of customers with each of TV, broadband andtelephony ("triple play") to 3.2 million, up 24% year on year. Tripleplay penetration of our customer base has now reached 31%. During thequarter, we also added 277,000 customers to our own network, meaningthat 63% of our customers are now fully unbundled and, as a result, wecontinue to improve the economics of our home communications business.Total HD customers reached 4.2 million, with 159,000 net additions inthe quarter, an increase on the 138,000 net additions in the secondquarter. This reflected continued strongdemand for the product aswell as the launch of our new Sky Sports Formula 1 HD channel (nowincluded at no extra cost with an HD subscription). Our multiroom basealso grew by 28,000 to 2.4 million.ARPU grew to a new high of GBP546 in the quarter, with the impact ofthis year's price freeze more than offset by our success in selling ourhome communications products to new and existing customers. While theeconomic environment remains tough, we also saw good customer loyaltywith churn falling to 10.1% (from 10.4% last year) as customerscontinue to recognise the value of our product range.We continue to enhance our broadband service, providing further valueto our customers. In April, we launched our WiFi hotspots from TheCloud service, giving internet access free of charge to Sky BroadbandUnlimited, Sky Fibre Unlimited and Sky Connect customers in over 10,000hotspots across the UK, including major outlets such as Pizza Express,Caffe Nero, Eat and Pret A Manger. We are currently adding over 200 newlive hotspots each week and new contracts with Greggs and LondonOverground were agreed during the quarter. We also launched our newfibre service in April, givingcustomers access to download speeds ofup to 38Mb and 76Mb for GBP20 and GBP30 a month, respectively.Great customer service remains central to our offering. We remainfocused on improving product reliability and are providingever-improving levels of issue resolution. By continuing to encouragecustomers to interact with us online we have also reduced our cost toserve in our contact centres, with call volumes per customer in thequarter down 10% versus the same period last year. Our progress inmaking our customer service even better has again been validated byOfcom - their latest survey on broadband complaints showing that Skyreceived the lowest level of complaints of any fixed broadband providerin the UK.ContentWe have had another quarter of strong on-screen performance as wecontinue to invest in our entertainment channels and build on ourtraditional strength in sports, news and movies.We are continuing to invest in original British comedy and drama andsaw strong performances from some of our key commissions, notablyTreasure Island, the second biggest drama commission ever broadcast onSky 1, and Ruth Jones' new comedy-drama Stella, which was the best UKcomedy launch series in multi-channel history in terms of audience. Thereturning series Got to Dance and Mad Dogs also performed well, as didthe US dramas Hawaii-Five-0, Spartacus and Touch. Forty-threeentertainment shows in the quarter generated an audience of at leastone million viewers, more than double the number in the same quarterlast year. Our success is being recognised by the industry: Sky 1 wasnamed Channel of the Year at the Broadcast Awards 2012 for the firsttime ever, while Darren Boyd won Best TV Comedy Actor at the BritishComedy Awards for his performance in Spy.As part of our previously announced commitment to original Britishcontent, we are investing in feature-length British films fortelevision with two distinct and complementary strands: new films forfamily audiences on Sky Movies and the best new documentary films onSky Atlantic. In addition, we recently acquired the rights to broadcastall twenty-four James Bond films in high definition, as well as theupcoming film, Skyfall. The deal will come into effect in October 2012,coinciding with the 50th anniversary of the film franchise.During the quarter we launched our dedicated Formula 1 channel, SkySports F1, which has been very well received. The HD version (SkySports F1 HD) contributed to the strong performance of HD productadditions in the quarter. The coverage has been critically acclaimed,offering over 500 hours of programming, extra video and data throughthe interactive 'Race Control' and streamed coverage on mobile, onlineand tablet devices, with 5.9 million viewers having watched the channelto date. Throughout the season Sky TV customers who subscribe to SkySports 1 & 2 or the HD channels mix will have access to liveuninterrupted coverage of all 20 Grand Prix, including all practice andqualifying sessions, as well as our weekly Friday night magazine showand Steve Rider's legends series, available at no extra cost. This isyet another example of Sky investing in fantastic content to provideeven better value for our customers while creating another reason forothers to consider pay TV for the first time.Looking ahead to the summer of sports, we have signed innovativeagreements with the BBC and Eurosport which will mean that Sky homeswill have access to the most comprehensive coverage of this summer'sOlympics in HD and 3D. We will create 48 new channels (24 SD and 24 HD)specifically for the Olympics, meaning that Sky+ homes will be able torecord the widest possible choice of Olympic events at a time thatsuits them. In addition, more than five million homes with Sky+HDset-top boxes will be able to watch the coverage in stunning highdefinition. Eurosport will also broadcast over 100 hours of the Gamesin 3D on Sky 3D.We are continuing to grow our content relationships with channelpartners through Sky 3D, the UK's first and only dedicated 3D TVchannel which is enjoyed by over a quarter of a million Sky homes. Aswell as our agreement with Eurosport for the Olympics, we will beworking with ESPN for the second year running to bring the FA Cup Finalin 3D to Sky 3D homes.During the quarter we added further to the breadth of our sportsoffering through long-term agreements in cricket and golf. We havesecured the rights to show all ICC tournaments to 2015, including theCricket World Cup, as well as an agreement to show the European Tour to2018, including the Saturday and Sunday of the showpiece PGAChampionship at Wentworth and The Scottish Open (previously held by theBBC).New Products and ServicesWe remain focused on improving portability of content by givingcustomers seamless access to Sky content on the move. Our services havebeen well-received and we have added to them further during thequarter.Sky Go continues to grow. We broadened the distribution in February,making it available on the Android platform, now the most popularsmartphone platform in the UK. We also increased the channel line-up inthe quarter with the addition of Sky 1, Sky Living, Sky Atlantic, SkyArts 1and Sky Sports F1. This enhanced offering has contributed to SkyGo reaching 2.6 million unique users in the quarter, up 24% from thesecond quarter (2.1 million).Over five million Sky customers can now access a huge range of ondemand content via Anytime+ after we made the service available to allHD boxes irrespective of their ISP. In addition, we introduced anenhanced new Sky+HD box in the quarter, adding even more flexibilityfor customers by increasing in-home storage capacity from 0.5TB to 1TB.Alongside the existing 1TB of personal storage, there is now a fulladditional terabyte of space dedicated to Sky Anytime showing the bestof the week's Sky TV and Movies. We also launched Sky Store in January,our on demand rentals service, giving customers a choice of over 1,000movies, including new releases just out on DVD and a whole library offavourites, all available to rent instantly.Launch of NOW TV service in 2012In March we announced that our new over-the-top internet TV servicewill be called NOW TV and is on track to launch in the first half ofcalendar 2012. The growth of broadband-connected devices is opening upnew opportunities to retail our content directly to additionalconsumers, and this service will sit alongside our current subscriptionpay TV service and be aimed at the 13 million UK households who do notcurrently subscribe to pay TV. NOW TV will provide instant access tosome of our most popular content with no dish and no contract required,and will be available on a wide range of devices. The service willinitially offer access to our movie content but will soon expand toinclude sport and entertainment, with customers able to pay monthly oron a simple pay-as-you-go-basis. This will be a new way for us toappeal to consumers who love great content but may not want the fullSky service, while offering us another new opportunity for customergrowth.The Bigger PictureAs part of our commitment to making a positive contribution to thecommunity, we delivered a number of initiatives this quarter throughour Bigger Picture programme, which focuses on environment, sport andthe arts.To support our Sky Rainforest Rescue campaign in partnership with WWF,we launched a new TV advert during the quarter to highlight howcustomers can join in and contribute to helping protect the rainforest.We also supported WWF's Earth Hour in March with a weekend of dedicatedenvironment programming across Sky channels, including the premier ofthe 3D documentary Secret Life of the Rainforest.Through our partnership with British Cycling, which aims to increaseparticipation in the sport, our pro cycling team 'Team Sky' began theirthird year on the road with their best start to a season to date withBradley Wiggins winning the Paris-Nice and last week's Tour deRomandie. We are also delighted to be announcing the extension of ourground-breaking partnership with British Cycling today for a furtherfour years to the end of 2016, building on our support for the sportfrom grassroots to elite. Our activity has already seen almost 700,000people take up cycling regularly to date.In February, we announced the first Sky Arts Ignition Series projectwith Sky funding the creation of a brand new work of art by renownedvideo artist Doug Aitken in partnership with Tate Liverpool.In recognition of our work across the Bigger Picture, we have increasedour score on Business in the Community's (BitC's) CorporateResponsibility Index, achieving 98% and once again earning a Platinumrating. Sky had the highest score in the Media and Entertainmentsector.FINANCIAL SUMMARYWe have delivered a strong financial performance in the nine months to31 March 2012 ("the period"). Revenue growth of 5% combined withcontinued progress on costs led to a 15% increase in adjusted operatingprofit to GBP908 million. Our focus on efficiency contributed to anabsolute reduction in other operating costs, contributing to furtheroperating margin expansion of 160 basis points to reach 17.9%. Togetherwith the recognition of some historic tax losses in the period,adjusted basic EPS was up by 24%.Unless otherwise stated, all figures and growth rates included withinthe financial section exclude exceptional items and are from continuingoperations.RevenueGroup revenue increased by 5% to GBP5,078 million (2011: GBP4,833million), with good growth in both retail and wholesale operations morethan offsetting continued headwinds in advertising and Sky Business.Retail subscription revenue grew by 4% to GBP4,172 million (2011:GBP4,009 million), with strong demand from customers for our productscombined with an overall larger customer base. This increase was alsodespite our decision to freeze subscription prices.Wholesale subscription revenue increased by 10% to GBP259 million (2011:GBP236 million) as demand for our channels and their HD versionscontinued to increase across other platforms.Advertising revenue was 4% lower year on year at GBP334 million (2011:GBP348 million). This reduction results from a combination of a loweroverall TV advertising market and higher payments to the third partypay TV channels represented by Sky Media in the period, due to improvedratings for their channels.The performance of our media partners hascontributed to our share of total UK advertising revenue increasing to20.9%. In the fiscal third quarter we performed in line with themarket, which we estimate was broadly flat.Installation, hardware and service revenue was lower year on year atGBP76 million (2011: GBP89 million), reflecting fewer engineer visits asa result of our work to increase the reliability of set-top boxes andthe introduction of a free installation for customers moving home.Other revenue was 57% higher at GBP237 million (2011: GBP151 million).The increase includes GBP46 million from the sale of set-top boxes toSky Italia, for which the corresponding cost is recognised in subscribermanagement and supply chain. Excluding this, other revenue was up by28% benefiting from continued strong performance in Sky Bet and theinclusion of GBP14 million from the consolidation of 'The Cloud'acquired on 23rd February 2011).Direct CostsProgramming costs increased by 5% to GBP1,709 million (2011: GBP1,621million). More than half of the year on year increase was attributableto entertainment costs, which included a full nine months of SkyAtlantic programming as well as increased investment in original UKcontent. Third party channel costs were GBP22 million higher as a resultof launching a further four HD channels in the period and 15% growth inHD customers. Sports costs were higher year on year with the first timeinclusion of the Formula 1 channel, and movies costs were broadly flat.Direct network costs increased by 22% to GBP510 million (2011: GBP418million) due to increased scale in the business and the 28% growth inhome communications products. Gross margin of our home communicationsproducts improved as a result of revenue growth and cost savingsachieved, as a greater proportion of customers are unbundled onto ourown network.Other Operating CostsWe have delivered another strong performance in costs, where efficiencyprogrammes have contributed to a 3% reduction in other operating costsfor the period to GBP1,951 million (2011: GBP2,004 million) and 310basis points of margin improvement year on year.Marketing costs fell by 11% to GBP797 million (2011: GBP893 million) asa result of our decision to close the printed Sky customer magazine,fewer gross additions in the period, and a reduction in above-the-lineadvertising costs.Subscriber management and supply chain costs increased by GBP51 millionyear on year to GBP483 million (2011: GBP432 million). The largestcontributor to the increase was the cost of sales of set-top boxes toSky Italia (corresponding revenue recorded within other revenue) fromwhich we both derive both scale benefits and a small positive profitmargin. Excluding the impact from these box sales, subscribermanagement and supply costs increased by 2% year on year, a lower ratethan customer volume growth.Transmission, technology and fixed network costs were GBP5 million lowerat GBP288 million (2011: GBP293 million) as a result of favourablenegotiations with suppliers and improved broadcasting efficiency due tothe move to tapeless production within Sky Studios.Administration costs fell by GBP3 million to GBP383 million(2011:GBP386 million) with a lower non-cash IFRS 2 'Share-based payment'charge and associated National Insurance costs than in the prior yearas a result of the phasing of our share-incentive plans.EarningsOn an adjusted basis, profit before tax was GBP853 million (2011: GBP727million), which included the Group's share of joint ventures andassociates' profits of GBP25 million (2011: GBP26 million) and a netinterest charge of GBP80 million (2011: GBP89 million).Adjusted taxation for the period was GBP198 million (2011: GBP195million),benefitting from the recognition in the third quarter ofapproximately GBP26 million of tax losses, largely inherited at thetime of the acquisition of Sky's core network, formerly part ofEasynet, in 2006. As a result of this, and the lower statutory rate ofcorporation tax announced in the Budget on 21 March 2012, we now expectthe full year adjusted tax rate to be around 24% (2011: 27%).Adjusted profit for the period was GBP655 million (2011: GBP532million), generating an adjusted basic earnings per share fromcontinuing operations of 37.8 pence (2011: 30.5 pence).Over the period the weighted average number of shares excluding thoseheld by the Employee Share Ownership Plan for the settlement ofemployee share awards was 1,734 million. The number of shares at theend of the period was 1,709 million.Cash Flow and Financial PositionAdjusted free cash flow was GBP601 million (2011: GBP615 million) due tothe first time inclusion of rights payments made to Formula 1 at thestart of its season, a one off benefit in the prior year due to the VATincrease on 1st January 2011, and the quarter end falling a week laterthan in the prior year.Net debt as at 31 March 2012 was GBP723 million (2011: GBP817 million).Shares repurchased to date under the approved GBP750 million sharerepurchase plan totalled GBP387 million, of which GBP220 million wascompleted in the third quarter. The interim dividend payment of GBP157million was paid to shareholders on 24th April 2012.Exceptional ItemsReported operating profit of GBP939 million included a net benefit ofGBP31 million being a break fee from News Corporation offset by relatedcosts.Reported profit after tax of GBP689 million also included an exceptionalgain of GBP13 million relating to the re-measurement of derivativefinancial instruments not qualifying for hedge accounting (2011: GBP16million gain), a profit on disposal of our stake in Chelsea DigitalMedia of GBP7 million, a GBP5 million charge due to writing off thefees relating to the previous revolving credit facility, and a GBP12million charge relating to the tax effect on exceptional items.CORPORATEAnnouncement of changes to the BoardOn 3rd April 2012, the Board announced that James Murdoch had steppeddown as Chairman of BSkyB and would continue to serve in his capacityas a Non-Executive Director of the Company. Mr Murdoch was succeededas Chairman by Nicholas Ferguson, who was appointed as a Director ofthe Company in June 2004 and previously served as Deputy Chairman andSenior Independent Non-Executive Director. Tom Mockridge, who joinedthe Board in February 2009, was appointed as Deputy Chairman. AndrewHigginson, who has been a Director of BSkyB since September 2004,succeeded Nicholas Ferguson as Senior Independent Non-ExecutiveDirector.With effect from 1st May 2012 the following Board committee changeshave taken place. Daniel Rimer was appointed Chairman of theRemuneration Committee in place of Nicholas Ferguson, who remains amember of the Committee. Martin Gilbert was appointed as a member ofthe Remuneration Committee.Andrew Higginson was appointed Chairman of the Corporate Governance &Nominations Committee in place of Lord Wilson, who remains a member ofthe Committee. Daniel Rimer was appointed as a member of the CorporateGovernance & Nominations Committee. Matthieu Pigasse was appointed as amember of the Audit Committee.James Murdoch was appointed Chairman of the Bigger Picture Committee inplace of Dame Gail Rebuck, who has stepped down as Chairman and as amember of the Committee.With effect from 1st June 2012 Martin Gilbert will be appointed as amember of the Audit Committee.Sky NewsFollowing the close of the quarter, we concluded a review of editorialpractices at Sky News. While there has been no allegation ofimpropriety at Sky News, the Company undertook the review at itsinstigation as part of its commitment to acting responsibly across allareas of our business. Reporting to the Audit Committee, the processinvolved the review of Sky News payment records by our internal auditteam and a review of emails by our external legal advisors, HerbertSmith. These reviews found no evidence of impropriety or cause forconcern.Separately, the Audit Committee has reviewed the Company's approach totwo separate investigations undertaken by Sky News in which a Sky Newsjournalist accessed the email of individuals suspected of criminalactivity. Following a thorough review of each of those cases, we aresatisfied that the action was justified in the public interest andsubject to proper editorial oversight.AcetraxOn 25th April 2012, the Group acquired Acetrax, a small over-the-top(OTT) internet TV provider, which provides a transactional video ondemand service to a wide range of internet-connected devices.Theacquisition will support the continued development of Sky's OTTactivities and further strengthen relationships with connected devicemanufacturers and content providers. Acetrax's gross assets as at 31stDecember 2011 were GBP2.3 million.OfcomOn 26th April 2012, Ofcom stated publicly that it is gathering evidenceas part of its on-going assessment of whether BSkyB is fit and properto hold its broadcasting licences, focusing in particular on events atNews Group Newspapers that it believes may be relevant. The company isengaging with Ofcom in this process and continues to believe that itremains a fit and proper licence holder, as demonstrated by itspositive contribution to UK audiences, employment and the broadereconomy, as well as its strong record of regulatory compliance and highstandards of governance.Schedule 1 - KPI SummaryAll figures(000)unless FY09/10 FY10/11 FY11/12stated Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3Total 9,770 9,868 9,979 10,150 10,223 10,294 10,371 10,471 10,549CustomersTotal 20,549 21,597 22,586 23,790 24,591 25,375 26,058 26,830 27,734ProductsTelevision9,770 9,860 9,956 10,096 10,147 10,187 10,213 10,253 10,268Sky+HD 2,510 2,939 3,154 3,497 3,686 3,822 3,925 4,063 4,222Multiroom 2,062 2,121 2,158 2,219 2,237 2,250 2,295 2,350 2,378Broadband 2,505 2,624 2,802 3,006 3,161 3,335 3,485 3,651 3,863Telephony 2,230 2,367 2,570 2,757 2,916 3,101 3,248 3,407 3,627Line 1,472 1,686 1,946 2,215 2,444 2,680 2,892 3,106 3,376RentalOtherMetrics% ofcustomerstaking TV, 20% 21% 23% 24% 26% 27% 28% 29% 31%Broadbandand TalkARPU (GBP) GBP GBP GBP GBP GBP GBP GBP GBP GBP 499 504 510 536 537 538 535 544 546Churn -quarterly 9.9% 10.5% 11.2% 9.5% 10.4% 10.4% 11.1% 9.6% 10.1%annualisedFixedNetworkMetricsOn-net 2,187 2,288 2,450 2,659 2,856 3,045 3,205 3,403 3,636baseMPF base 664 883 1,064 1,247 1,435 1,686 1,869 2,146 2,423SMPF base 1,523 1,405 1,386 1,412 1,421 1,359 1,336 1,257 1,213MPF % 30% 39% 43% 47% 50% 55% 58% 63% 67%SMPF % 70% 61% 57% 53% 50% 45% 42% 37% 33%Off-net 318 336 352 347 305 290 280 248 227baseTotal 2,505 2,624 2,802 3,006 3,161 3,335 3,485 3,651 3,863BroadbandOn-net % 87% 87% 87% 88% 90% 91% 92% 93% 94%New LLUexchanges - 6 94 141 115 28 155 175 57(actual figs)Total LLUexchanges 1,193 1,199 1,293 1,434 1,549 1,577 1,732 1,907 1,964(actual figs)Enquiries:Analysts/Investors:Francesca Pierce Tel: 020 7032 3337Edward Steel Tel: 020 7032 2093Lang Messer Tel: 020 7032 2657E-mail: investor-relations@bskyb.comPress:Robert Fraser Tel: 020 7705 3000Stephen Gaynor Tel: 020 7705 3000E-mail: corporate.communications@bskyb.comClick on, or paste the following link into your web browser, to viewthe associated PDF document. conference call for UK and European analysts and investors will beheld at 08.30 a.m. (BST) today. Participants must register bycontacting Yasmin Charabati on +44 20 7251 3801 or In addition, the live conferencecalls and supporting materials will be available via and subsequently available for replay.There will be a separate conference call for US analysts and investorsat 10.00 a.m. (EDT) today. Details of this call have been sent to USinstitutions and can be obtained from Dana Diver at Taylor Rafferty on+1 212 889 4350. A live conference call and supporting materials willbe available on Sky's corporate website, replay will subsequently be available.Use of measures not defined under IFRSThis press release contains certain information on the Group'sfinancial position, results and cash flows that have been derived frommeasures calculated in accordance with IFRS. This information shouldnot be read in isolation from the related IFRS measures.Forward looking statementsThis document contains certain forward looking statements with respectto the Group's financial condition, results of operations and businessand management's strategy, plans and objectives for the Group. Thesestatements include, without limitation, those that express forecasts,expectations and projection, such as forecasts, expectations andprojections in relation to new products and services, revenue, costs,advertising growth, churn, profit, cash flow, product penetration, ourbroadband network footprint, content, wholesale, marketing and capitalexpenditure and returns to shareholders.Although the Company believes that the expectations reflected in suchforward looking statements are reasonable, these statements are notguarantees of future performance and are subject to risks,uncertainties and other factors, some of which are beyond our control,are difficult to predict and could cause actual results to differmaterially from those expressed or implied or forecast in the forwardlooking statements. Information on the significant risks anduncertainties are described in the "Principal risks and uncertainties"section of Sky's Annual Report for the full year ended 30 June 2011 (asupdated in Sky's results for the six months ended 31 December 2011).Copies of the Annual Report and 31 December 2011 results are availablefrom the British Sky Broadcasting Group plc web page at forward looking statements in this document are based oninformation known to the Group on the date hereof. The Group undertakesno obligation publicly to update or revise any forward lookingstatements, whether as a result of new information, future events orotherwise. This information is provided by RNS The company news service from the London Stock ExchangeEND

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