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Results for the twelve months ended 30 June 2012

Jul 26 2012 12:00AM

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MIDDLESEX, UNITED KINGDOM -- (Marketwire) -- 07/26/12 --

BRITISH SKY BROADCASTING GROUP PLC Results for the twelve months ended 30 June 2012 Adjusted results Reported resultsTwelve months 2012 2011 Variance 2012 2011 Varianceto 30 JuneRevenue GBP6,791m GBP6,597m +3% GBP6,791m GBP6,597m +3%EBITDA GBP1,567m GBP1,405m +12% GBP1,587m GBP1,405m +13%Operating GBP1,223m GBP1,073m +14% GBP1,243m GBP1,073m +16%profitEarnings per 50.8p 41.6p +22% 52.6p 43.5p +21%share (basic) ANOTHER YEAR OF STRONG OPERATIONAL GROWTH AND RECORD FINANCIAL RESULTSRecord financial performance. Revenue up 4.5% to GBP6.791 billion on a like-for-like basis(1). Record adjusted operating profit of GBP1.223 billion, up 14% with continued margin expansion to reach 18.0%, the highest level for six years. Adjusted basic EPS up 22% to 50.8 pence. Full year dividend increased by 9% to 25.4 pence per share. Additional GBP500 million capital return to shareholders via share buy-backConsistent and strong operational growth. Total products increase by 12% to reach 28.4 million. 10.6 million customers choose Sky, up 312,000 on the prior year. Strong customer loyalty with churn of 9.9% in the quarter. Four million customers choose Sky Broadband for great quality and value. Largest and fastest growing triple play customer base in Britain at 3.4 million, up 21%Delivering the best experience for customers. Breadth of sports coverage continues with new rights renewals for Spanish football, British and Irish Lions rugby and Premier League. Our second brand, NOW TV, launched on 17 July to give millions of people easy, instant access to Sky content. Bringing a full suite of Sky services to Irish customers with the launch of Sky Broadband and Talk later this year. Extending Sky Go with eight kids' channels now available including Disney and Nickelodeon; access to 32 live channels and a broad range of on demand content. Free-to-air catch-up service to launch in the autumn to include BBC iPlayer, ITV Player and Demand 5; Sky Anytime+ surpasses one million homes, up 57% on last quarterResults highlightsCustomer Metrics (unaudited) As at As at Annual Quarterly Growth 30-Jun-12 30-Jun-11 Growth to 30-Jun-12Total products ('000s) 28,365 25,375 +2,990 +631 TV 10,288 10,187 +101 +20 HD 4,343 3,822 +521 +121 Multiroom 2,402 2,250 +152 +24 Broadband 4,001 3,335 +666 +138 Telephony 3,768 3,101 +667 +141 Line rental 3,563 2,680 +883 +187Total customers ('000s) 10,606 10,294 +312 +57Products per customer 2.7 2.5 +0.2Other metricsCustomers taking each ofTV, broadband & talk 32% 27% +500 bpsARPU (2) GBP548 GBP538 +GBP10Churn (quarterlyannualised) 9.9% 10.4% -50 bpsAn additional KPI summary table containing further detailed disclosuremay be found in Schedule 1.Business Performance (3)(unaudited)GBP'millions 12 mths to 12 mths to 30-Jun-12 30-Jun-11 MovementRevenue 6,791 6,597 +3%Adjusted EBITDA 1,567 1,405 +12%% Adjusted EBITDA margin 23.1% 21.3% +180 bpsAdjusted operating profit 1,223 1,073 +14%% Adjusted operating profitmargin 18.0% 16.3% +170 bpsAdjusted free cash flow 910 869 +5%Adjusted basic earnings per 50.8p 41.6p +22%share (4)Net debt as at end of period 876 750 +17%1 Like-for-like revenue growth of 4.5% is calculated by removing one week of trading (an estimated GBP100 million of revenue) from 2011 which was a 53 week year.2 Quarterly annualised. Calculations have been restated to include customers taking standalone home communications products and to reflect the impact of the Sky magazine closure.3 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 2.4 Adjusted basic EPS is calculated from adjusted profit from continuing operations for the year. A reconciliation of reported profit from continuing operations to adjusted profit from continuing operations is set out in note 7 to the consolidated financial information.Jeremy Darroch, Chief Executive, commented:"We have delivered recordfinancial results after another year ofstrong operational growth. Our consistent approach of investing whereit matters most to customers and improving efficiency behind the scenesis working extremely well."In what remains a tough economic environment,customers are choosingSky over other providers. We've continued to add new households andexisting customers are remaining loyal and taking more products fromus. More than 9 million homes are now choosing to watch their TVthrough Sky+, we're helping more customers to save money in homecommunications and innovative services like Sky Go are adding even morevalue to their subscription."We continue to transform our financialperformance through disciplineon costs combined with strong revenue growth from three million productadditions and over 300,000 new Sky households during the year. We havedelivered double-digit growth in operating profit, free cash flow andEPS, which has now doubled over the last four years. On the back ofthis sustained strong performance we are increasing returns toshareholders with the eighth consecutive year of growth in the ordinarydividend and we intend to seek approval for a further GBP500 million ofshare repurchases."Looking ahead, we will continue to deploy capitalconsistently toachieve our goals. We will invest sensibly in areas where customers seevalue - in getting better on screen and improving our products andservices - and maintain a strong focus on operating efficiency and costcontrol to underpin our investments and deliver increasing returns forshareholders."This month, we have seen how our growth is leading topositive resultsfor the UK as a whole. First, our contribution to the wider UK economyhas been quantified in a new report by independent consultants OxfordEconomics. It finds that Sky contributes over GBP5 billion a year to UKGDP, and supports nearly 120,000 jobs and a GBP2.3 billion contributionto tax revenues. In the last 12 months, we have created 2,200 newpermanent jobs at Sky as we continue to invest in customer service,programme production and technology innovation."Second, we are proud tohave played our part in the wonderfulachievement of Team Sky and Bradley Wiggins, who created sportinghistory this week by becoming the first British winner of the Tour deFrance. Our support for Team Sky forms part of our broad partnershipwith British Cycling to get more people cycling regularly throughinspiration from elite success and participation in grassrootsactivity, including our successful programme of Sky Ride events. We allhope that success at the Tour de France will add fuel to Britain'scycling boom and inspire a whole new generation to get on theirbikes."These are good examples of the important economic and socialcontribution that a successful British company can make and we hope todo even more in the future."OPERATIONAL REVIEWSky has delivered another year of strong operational growth and recordfinancial results. Despite the tough economic environment, morecustomers are choosing more of our products than ever before withalmost three million net product additions to reach a base of 28.4million, up 12% on the prior year. We added 312,000 new households toreach 10.6 million customers, of which 32% now take our triple-play oftelevision, broadband and telephony. Customer loyalty remains strongwith annualised churn of 9.9% in the fourth quarter, reflectingincreased take-up of our products and strong rates of overallsatisfaction with our service.Alongside our strong operating performance we have delivered recordfinancial results with double-digit growth in each of operating profit,EPS and adjusted free cash flow(1). Like-for-like revenue growth of4.5%(2),combined with our focus on cost efficiency, translated into 14%growth in adjusted operating profit and 22% growth in adjusted basicEPS to reach 50.8p, now double the level of four years ago. The finaldividend of 16.2 pence per share is 11% higher year on year, resultingin the eighth consecutive year of growth in the full year dividend.Operational PerformanceWe continued to see strong demand for our products with 631,000additions in the quarter to reach a total of 28.4 million. We added57,000 new Sky households in the quarter, including 37,000 standalonehome communications customers and 20,000 TV customers.Following good growth across all product categories, our customers arenow taking an average of 2.7 products each, up from 2.5 a year ago anddouble the level of five years ago. ARPU increased by GBP10 on last yearto GBP548, as the impact of this year's price freeze was more thanoffset by success in selling more products to new and existingcustomers. While the consumer environment remains challenging,customers are responding to the quality and value of our offering withquarterly annualised churn of 9.9%; lower than both the prior quarterand the prior year.We delivered another good quarter in home communications as customerscontinue to choose Sky over other providers; we added 138,000broadband, 141,000 telephony and 187,000 line rental products. As aresult, we closed the year with 3.4 million triple play customers, up21%, to extend our lead as the nation's favourite triple-play provider.We continue to make good progress in unbundling. During the quarter, weadded 165,000 customers to our own network such that 69% of our on-netbroadband customers are fully unbundled. Through the unbundlingprocess, we can further improve the economics of our homecommunications business.Today we are announcing plans to launch home communications services inthe Republic of Ireland later this year, making our high quality, greatvalue broadband and telephony available to an additional 1.6 millionhomes. We have reached a wholesale agreement with BT Ireland allowingus to bring greater choice to customers and allowing them to take theirentertainment and communications services from one trusted provider.Pricing will be announced closer to launch but we will offer customersa great value proposition at attractive ongoing economics for ourbusiness.Our 'Summer of Sport in HD' campaign combined with the continuedsuccess of our Sky Sports F1 HD channel contributed to 121,000 HDadditions in the quarter. With over half a million additions acrossthe year, HD penetration of our base has now reached 41%. Multiroombenefitted from a successful marketing campaign with 24,000 netadditions in the quarter to reach 2.4 million.Our continued focus on customer service is delivering meaningfulbenefits to the business. This quarter, average calls per customer fellby more than 15% despite continued strong product growth while servicevisits to customers' homes to fix a problem were the lowest in eightyears. These improvements reflect continued focus on even betterreliability of our products and services and resolving customer issuesfirst time, through increased training and moving more conversationsin-house. Our focus on e-enablement deflected over 6 million telephonecalls online over the course of the year and has led to sky.com beingconsistently our most popular sales channel. In June, Ofcom publishedtheir sixth quarterly complaints report in which we performed stronglyonce again with the fewest complaints of any provider in both broadbandand TV.Getting even better on screenWe continued to extend our leadership in content through building onour traditional areas of strength in sports, movies and news and at thesame time driving a step change in our entertainment offering.We had a very strong quarter in sport both on and off screen. Thecrucial Monday Night Football match between Manchester City andManchester United set a new record for live Premier League football andfor Sky, peaking at 4.29 million viewers. In addition, many customerswatched the game on the move or online via Sky Go, with the platformachieving a record 230,000 unique views for the game. Overall, thedramatic 2011/12 Premier League season generated average audiences thatwere up 12% on the prior year and on the final day of the season 4.6million viewers watched the climax on one of the Sky Sports channels.Our innovative new coverage of Formula 1 on Sky Sports F1 HD continueswith an unprecedented and exciting start to the season with sevendifferent winners in the first ten races and over 7.3 million viewerswatching the new channel. Looking ahead, Sky customers can look forwardto a strong period on Sky Sports with golf'sUS PGA Championship andRyder Cup, US Open tennis, Test and One-Day cricket and the return ofUEFA Champions League football.We renewed a broad range of sports rights in the quarter, ensuring thecontinued breadth and quality of our sports offering and giving usgreater certainty than ever before over the largest item in our costbase. In the recent Premier League ('PL') tender process, for liverights for the three seasons beginning in August 2013, we successfullysecured five packs including 116 live matches per year, ensuring thatSky remains the home of PL football.In addition, we have renewed multi-year agreements to show more livefootball from La Liga and next year's British & Irish Lions tour toAustralia. With these latest renewals we have now secured the majorityof our sports rights for at least the next three years ensuringcontinuity of Sky Sports' unparalleled sports coverage.We've continued to develop our entertainment offering and achievedsuccess with a combined reach of 25 million viewers to ourentertainment channel portfolio per month. Our decision to invest inoriginal British comedy is proving very successful with a number of Sky1 shows recommissioned for further series after their successful firstruns, including 'Stella', 'Starlings' and 'Trollied'. Following itssuccessful launch last year, Sky Atlantic continues to hold very strongappeal to both existing and new customers. The channel's first UKdrama, 'Hit & Miss', proved popular during the quarter and the returnof 'Game of Thrones' is the best show ever on the channel achieving anaverage weekly cumulative audience of 1.2 million viewers.After its move higher up the Electronic Programme Guide in February,Sky Arts strongly increased viewing share, with the 'PlayhousePresents' series delivering the highest ever ratings for the channel.Alongside our continued investment in content, we are widening thedistribution of our channels and broadening the monetisation of ourcontent. Today we are announcing a new comprehensive wholesaledistribution agreement that will allow TalkTalk to offer its YouViewcustomers a wide range of Sky's standard definition entertainment,sports and movies channels in the UK.Improving our products and servicesWe continue to focus on improving our products to deliver the bestcustomer experience and get more of our services into customers' homes.Sky Go, our ground breaking over the top service, continues to resonatestrongly with customers enjoying the convenience and flexibility ofbeing able to access a wide selection of our content on the move.Customers can choose from hundreds of hours of TV live or on demandacross 32 channels, download a movie from the Sky Movies library ofover 450 titles, or rent a movie instantly on a laptop from the new SkyStore. We saw 2.7 million unique users access the service in thequarter, up by 5% on the previous quarter. In July we made content fromour entertainment channels available on demand for all customers andtoday we are launching on-demand shows from eight kids' channels to alldevices in time for the summer holidays, including Disney and NickJunior. Over the next 12 months we will continue to extend the serviceto make it available to more devices and add new features such as pauseand rewind, search and personal recommendations.In addition to the convenient local storage of the set-top box, ourvideo on demand service, Anytime+, is now available to more than fivemillion homes. We made the service available to all HD boxesirrespective of their ISP and have now surpassed one million activeusers in total. As part of our plans to extend the Anytime+ service, weare announcing today a new agreement to add free-to-air catch-upcontent from Channel 5 later this year, which will be availablealongside catch-up content from BBC and ITV, as well as the best inon-demand content from Sky.In home communications, we have further enhanced our broadband servicewith the launch of The Cloud WiFi hotspots in April, to give seamlessinternet access free of charge to Sky Broadband Unlimited, Sky FibreUnlimited and Sky Connect customers. We now have over 11,000 publicaccess hotspots live across the UK, providing valued WiFi access forcustomers in convenient locations.In the year ahead, we have a strong pipeline of innovative new productsand services planned for release. We plan to enhance the functionalityof the Sky+ app to allow customers to use the iPad as a remote controlfor browsing the EPG, managing their Sky+ planner and selectingprogrammes to watch, pause, fast forward and rewind.NOW TV, a new internet TV service giving millions more people an easyand flexible way to access some of Sky's best content, launched on 17July across a wide range of internet-connected devices.Starting initially with Sky Movies, NOW TV offers access to anextensive range of classic movies and the latest Hollywoodblockbusters. Customers can rent more than 1,000 movies, from classictitles to the latest 'now on DVD' releases, on a simple, pay-as-you-gobasis. Alternatively, customers can choose a monthly pass providingexclusive access to over 600 movies including titles from major studiossuch as Disney, Fox, Paramount, Sony, Warner Bros. and Universal. Thisincludes up to five new premieres each week at least 12 months beforeother subscription services. Rental prices range from 99p to GBP3.49 andthe Sky Movies pass is available for GBP15 a month. Both options willoffer movies to stream instantly with no set-up costs, installation orcontract. More Sky content will be added to NOW TV in the comingmonths, including content from Sky Sports and Sky entertainmentchannels.NOW TV is available to anyone in the UK with an internet connection ondevices including PC, Mac, and selected Android smartphones. Theservice will become available on iPhone, iPad and Xbox within the nextmonth, on YouView when it launches and other platforms including SonyPlayStation 3 and Roku later this year. We estimate associated launchcosts of approximately GBP30 million will be required for a through theline marketing campaign and support of the new product in the fiscalyear to 30 June 2013.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 the environment, sportand the arts.Through our partnership with British Cycling, which aims to increaseparticipation in the sport, our pro cycling team, 'Team Sky', createdsporting history in this year's Tour de France. Team Sky won a third ofthe stages in the Tour with Bradley Wiggins becoming the first Britishrider ever to win the event alongside teammate and fellow Brit ChrisFroome in second place, with Mark Cavendish claiming his fourthconsecutive final stage victory in Paris. Alongside this, the 2012Skyride programme is underway with over 70,000 people havingparticipated to date in city centre and local rides, with furtherevents planned over the summer.Also in sport, our eight year partnership with the Youth Sports Trust,Sky Sports Living for Sports, has had its best year ever with over 850schools and 18,000 students taking part. Our 50 athlete mentors,including Darren Campbell and Sky Sports' Kirsty Gallacher, have madeover 1,400 school visits.In May, we announced the extension of our Sky Rainforest Rescuecampaign in partnership with WWF for a further three years. The firstphase of the campaign hit its GBP2 million fundraising target six monthsearly and Sky has matched all donations pound for pound to reach atotal of GBP4 million.In May, Sky Arts returned to the Hay and Brighton festivals building onour work to open up the arts to more people. At Hay, six episodes ofthe Book Show along with 20 other sessions were filmed and shown on SkyArts. In addition, the 'Sky Arts Ignition: Futures Fund' awardedfurther bursaries of GBP30,000 each to three young artists in order toassist their emerging careers.FINANCIAL SUMMARYFor the twelve months ended 30 June 2012 ("the year") we deliveredrecord financial results. Revenue increased by 4.5% on a like-for-likebasis(3), reflecting our continued growth in households and totalproducts, and good contribution from other businesses. Top-line growthtranslated into strong profitability with adjusted EBITDA up 12% atGBP1,567 million and adjusted operating profit at its highest ever levelof GBP1,223 million, at an expanded adjusted operating margin of 18.0%.Adjusted basic earnings per share increased by 22% to reach 50.8 pence.Unless otherwise stated, all figures and growth rates included withinthis financial summary exclude exceptional items and are fromcontinuing operations.RevenueReported group revenue increased by GBP194 million to GBP6,791 million(2011: GBP6,597 million). Like-for-like revenue3 increased by 4.5% asthe growth in customers and products more than offset headwinds inadvertising and Sky Business.Retail subscription revenue increased to GBP5,593 million (2011:GBP5,471 million) as a result of strong product growth over the yearand a larger customer base more than offsetting our decision to freezesubscription prices. Excluding the impact of the additional week ofrevenue in the comparative, subscription revenue grew 4% on the prioryear on a like-for-like basis(3).Our wholesale business continues to perform strongly with revenue up by9% to GBP351 million (2011: GBP323 million), due to increased take-upfor our channels and their HD versions across other platforms, thelaunch and success of our new Formula 1 channel and new carriage dealsfrom the first quarter of the fiscal year.Advertising revenue was 4% lower year on year at GBP440 million (2011:GBP458 million). We continued to increase our market share, by 100 basispoints year on year to 21.2%, with the majority of growth due toimproved channel ratings for our third party partners with whom weshare revenue upside. Looking over a longer period, the benefits ofincreased scale have enabled us to grow revenue by GBP111 million since2008/09 at an average annual growth of 10%. Looking ahead, we expect TVadvertising will remain challenging and anticipate an overall marketdecline in the second half of calendar 2012.Installation, hardware and service revenue of GBP98 million was loweryear on year (2011: GBP112 million). In the context of continued growthin customers and product penetration, our work on product reliabilityand right-first-time installation rates led to the lowest level ofservice visits for eight years.Other revenue increased by 33% to GBP309 million (2011: GBP233 million),including GBP52 million from the sale of set-top boxes to Sky Italia,for which the corresponding cost is recognised in subscriber managementand supply chain. Excluding these sales, other revenue was up by 22%benefiting from continued strong performance in Sky Bet and theconsolidation of 'The Cloud' (acquired on 23rd February 2011).Direct CostsProgramming costs increased by 5% to GBP2,298 million (2011: GBP2,188million) reflecting our continued investment in high quality content.Entertainment costs increased by GBP70 million as a result of a fulltwelve months of Sky Atlantic programming, alongside increasedinvestment in original UK content. Third party channel costs were GBP30million higher as a result of adding seven HD channels in the year and14% growth in HD customers year on year. Sports costs were GBP12 millionhigher year on year with the first time inclusion of the Formula 1channel being partly offset by lower costs for cricket, golf and boxingdue to the absence of biennial and other events such as the Ryder Cupand the Haye Klitschko fight that were included in the comparativeyear. Movies costs were flat year on year.Direct network costs increased by 16% to GBP676 million (2011: GBP584million), with 24% growth in home communications products partiallyoffset by our continued progress in migrating customers to our fullyunbundled network, thereby reducing the per customer cost. Gross marginof our home communications products improved as a result of revenuegrowth, additional scale and cost savings achieved as a greaterproportion of customers are on our network.Other Operating CostsWe have delivered another strong performance in costs, where efficiencyprogrammes have contributed to a 6% reduction in adjusted otheroperating costs for the period to GBP2,594 million (2011: GBP2,752million)and a 350 basis points reduction as a percentage of sales.Marketing costs were 13% lower year on year at GBP1,064 million (2011:GBP1,220 million) with lower cost route-to-market sales, lessabove-the-line spend and fewer gross additions. Online is nowconsistently our single largest route-to-market, with our best offersavailable via sky.com. In addition to savings from the closure of theSky customer magazine, above-the-line costs were GBP25 million loweryear on year. Overall, the cost to acquire a new TV customer ("SAC") wasGBP397 (2011: GBP376), with lower costs of direct marketing and set-topbox costs offset by lower customer acquisition volumes.Subscriber management and supply chain costs increased by GBP25 millionyear on year to GBP621 million (2011: GBP596 million). The largestcontributor to the increase was the cost of sales of set-top boxes toSky Italia (with corresponding revenue recorded within other revenue).Excluding the impact from these box sales, in both the current andcomparative year, subscriber management and supply chain costs weredown in absolute terms year on year; a good result in the context of agrowing customer base and a 12% increase in the sale of total productsyear on year.Transmission, technology and fixed network costs were flat at GBP395million (2011: GBP395 million) as a result of favourable negotiationswith suppliers and improved broadcasting efficiency due to the move totapeless production within Sky Studios.Administration costs fell by GBP27 million to GBP514 million (2011:GBP541 million) helped by a lower non-cash IFRS 2 'Share-based payment'charge and associated National Insurance costs than in the prior year.EarningsOn an adjusted basis, profit before tax was GBP1,148 million (2011:GBP987 million), which included the Group's share of joint ventures andassociates' profits of GBP32 million (2011: GBP34 million) and a netinterest charge of GBP107 million (2011: GBP120 million).Adjusted taxation for the period was GBP273 million (2011: GBP262million). The adjusted effective tax rate was 24% (2011: 27%)reflecting the reduction in the rate of UK Corporation Tax, and one-offtax losses recognised in the third quarter largely inherited at thetime of acquisition of Sky's core network, formerly part of Easynet, in2006.Adjusted profit for the period was GBP875 million (2011: GBP725million), generating an adjusted basic earnings per share fromcontinuing operations of 50.8 pence (2011: 41.6 pence).Over the year the weighted average number of shares excluding thoseheld by the Employee Share Ownership Plan for the settlement ofemployee share awards was 1,721 million (2011: 1,743 million). Thenumber of shares at the end of the year was 1,674 million (2011: 1,753million).Exceptional ItemsReported operating profit of GBP1,243 million included a net benefit ofGBP20 million consisting of a GBP31 million gain relating to the breakfee from News Corporation net of related costs, and GBP11 million ofrestructuring costs which comprise severance payments in relation toapproximately 35 senior roles as part of a restructuring initiative toimprove operational efficiency. Both exceptional items were recognisedin administration costs.Reported profit after tax of GBP906 million also included an additionalGBP11 million exceptional gain, which consisted of a GBP7 million profiton disposal of our stake in Chelsea Digital Media, an exceptional gainof GBP19 million relating to the re-measurement of derivative financialinstruments not qualifying for hedge accounting (2011: GBP18 milliongain), a GBP5 million charge due to writing-off the fees relating to theprevious revolving credit facility, and a GBP10 million charge relatingto the tax effect on exceptional items. See Appendix 2 for areconciliation of the reported to adjusted income statement.Cash Flow and Financial PositionAdjusted free cash flow increased by 14% to GBP992 million (2011: GBP869million), excluding a one-off payment of GBP82 million in respect of thePremier League rights deposit for the season starting August 2013(including the one-off payment, adjusted free cash flow was GBP910million. See Appendix 2 for a reconciliation of adjusted free cashflow.). The strong underlying cash flow growth reflects 12% increase inadjusted EBITDA and a 9% improvement in working capital, offset byincreased capital expenditure.Capital expenditure increased by GBP34 million to GBP457 million (2011:GBP423 million), 6.7% of sales. The largest contributor to growth wasthe growing scale of our broadband network as we unbundled a further 388exchanges to reach 83% coverage of the UK, expanded The Cloud WiFinetwork and launched a fibre product.Net debt as at 30 June 2012 was GBP876 million (2011: GBP750 million).The value of shares repurchased to date under the GBP750 million sharerepurchase plan approved by shareholders on 29 November 2011 totalledGBP549 million, of which GBP236 million was completed in the fourthquarter.The Group's liquidity and headroom are comfortable with no bondredemptions until October 2015 when GBP428 million falls due. As at theend of the year, cash and cash equivalents and short-term deposits wereGBP1,174 million and the Company's GBP743 million revolving creditfacility remains wholly undrawn.Distributions to ShareholdersIn setting the Company's financial strategy and policy for the use ofcapital, our aim is to strike a balance between value accretiveinvestment in the business and cash returns to shareholders. We are agrowth company and our first priority for the use of capital is tore-invest in the business where we see the opportunity to grow revenuesand earnings. Alongside this, we expect our shareholders to continue tobenefit from our commitment to increase our ordinary dividend in linewith earnings growth. Where appropriate we will also look to pursueacquisition opportunities and/or to return capital to shareholders.Our policy with respect to the ordinary dividend is to pay-out 50% ofadjusted earnings each year to shareholders and for the fiscal yearended 30 June 2012 the Directors propose a final dividend of 16.20pence per share, resulting in a full year dividend of 25.40 pence pershare, up 9%. The proposed dividend continues our strong track recordof growth and represents the eighth consecutive year-on-year increase.In addition, this year we intend to seek shareholder approval at theCompany's AGM on 1 November 2012 for a further GBP500 million of sharerepurchases.As with the current share repurchase programme, we have entered into anagreement with News Corporation under which, following any marketpurchases of shares by the Company, News Corporation will sell to theCompany sufficient shares to maintain its percentage shareholding atthe same level as applied prior to those market purchases, ensuringthat there will be no change in News Corporation's economic or votinginterests in the Company as a result of the share buy-back programme.The agreement is conditional on the appropriate shareholder approvalsbeing granted.The ex-dividend date will be 24 October 2012 and, subject toshareholder approval at the Annual General Meeting to be held on 1November 2012, the final dividend of 16.20 pence will be paid on 16November 2012 to shareholders appearing on the register at the close ofbusiness on 26 October 2012.CorporateThe company continues to engage with Ofcom as part of its ongoingassessment of whether BSkyB is fit and proper to hold its broadcastinglicences. We continue to believe that Sky remains a fit and properlicence holder, as demonstrated by our strong record of regulatorycompliance and high standards of governance.Sky also makes a positive contribution to UK audiences, employment andthe broader economy. To measure and explain the scale of our economicimpact in particular, we commissioned a report from independentconsultants Oxford Economics. The study, 'The Economic Impact of Sky onthe UK'(4), found that Sky contributes over GBP5 billion a year to UKGDP, and supports nearly 120,000 jobs and a GBP2.3 billion contributionto tax revenues. The full report is available at www.sky.com/corporate.RokuSky has made a $10m equity investment in Roku, a leading platform whichdelivers over-the-top (OTT) services via its innovative and low-coststreaming devices. This follows earlier confirmation that NOW TV willbe made available through Roku's UK devices. In addition to thiscarriage deal, the equity stake gives Sky the option to rebrand anddistribute versions of Roku's streaming devices in the future, shouldit wish to complement the OTT distribution it currently receives overthird-party platforms.Notes:1) References to Roku are to Roku Inc.2) Gross assets subject to this transaction were $10m3) Profits attributable to the assets subject to this transaction were $nilEnquiries: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 that includes the table Schedule 1 - KPISummary.http://www.rns-pdf.londonstockexchange.com/rns/5374I_1-2012-7-26.pdfThere will be a presentation to analysts and investors at 08.45 a.m.(BST) today. Participants must register by contacting Yasmin Charabation +44 20 7251 3801 or at yasmin.charabati@RLMfinsbury.com. Inaddition, the live webcast will be available via http://www.sky.com/investors 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, http://www.sky.com/corporate.A replay will subsequently be available.(1) Adjusted free cash flow of GBP910 million further excluding an GBP82 million deposit in relation to Premier League rights for the season starting August 2013.(2) Like-for-like revenue growth of 4.5% is calculated by removing one week of trading (estimated GBP100 million of revenue) from 2011 which was a 53 week year.(3) Like-for-like revenue growth is calculated by removing one week of trading (estimated GBP100 million of revenue) from 2011 which was a 53 week year.(4) Source: The Economic Impact of Sky on the UK, Oxford Economics, June 2012. The full report is posted at http://corporate.sky.com/ documents/pdf/publications/2012/the_economic_impact_of_sky_on_the_uk This information is provided by RNS The company news service from the London Stock ExchangeEND





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