News Column

British Sky Broadcasting Group Interim Results

Jan 31 2013 12:00AM

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MIDDLESEX, UK -- (Marketwire) -- 01/31/13 --

BRITISH SKY BROADCASTING GROUP PLC Unaudited results for the six months ended 31 December 2012 GOOD PROGRESS ON STRATEGY DELIVERING STRONG FINANCIAL PERFORMANCE Adjusted results (GBP) Reported results (GBP)Half year 2012/13 2011/12 Variance 2012/13 2011/12 VarianceRevenue 3,533m 3,364m +5% 3,533m 3,364m +5%EBITDA 813m 772m +5% 845m 803m +5%Operating profit 647m 601m +8% 679m 632m +7%Earnings per share 28.3p 24.0p +18% 29.7p 25.3p +17%(basic)Dividend per share 11.00p 9.20p +20% 11.00p 9.20p +20%Further strong financial performance and increased returns toshareholders* Revenue up 5% to GBP3,533m* Adjusted operating profit up 8% to GBP647m* Adjusted basic earnings per share up 18% to 28.3 pence* Interim dividend up 20% to 11.0 penceMulti-product strategy delivering good operational growth* Subscription product growth of 615,000 in Q2* Total subscription product base of 29.5 million, up 10% year onyear* Triple-play penetration of 33%, up 4pp year on year* 88,000 new customers added in Q2 to reach 10.74 million, up271,000 year on year* ARPU of GBP568, up GBP24 year on yearCustomers responding positively to our content and products* New services driving increased viewing - weekly On Demanddownloads up 150% in Q2; Sky Go users increased 46% year on year toreach 3.1 million* Standout performance from Sky Sports - record audiences for RyderCup and US Open tennis, and over 9 million viewers to first season ofSky Sports F1 channelContinued excellent progress in cost initiatives and efficiencyimprovements* Adjusted other operating costs as percentage of sales reduced by200 basis pointsResults highlightsCustomer Metrics (unaudited) As at As at Annual Quarterly Growth 31-Dec-12 31-Dec-11 Growth to 31-Dec-12Products ('000s) TV (DTH and NOW TV) 10,358 10,253 +105 +50 HD 4,561 4,063 +498 +93 Multiroom 2,467 2,350 +117 +44 Broadband 4,235 3,651 +584 +132 Telephony 4,022 3,407 +615 +134 Line rental 3,870 3,106 +764 +162Paid-for subscription 29,513 26,830 +2,683 +615products Connected Sky+HD boxes 1,715 442 +1,273 +460 Sky Go unique users 3,066 2,107 +959 +298Total Customers 10,742 10,471 +271 +88Paid-for products percustomer 2.7 2.6Other metricsCustomers taking each ofTV, broadband & talk 33% 29%ARPU (2) GBP568 GBP544 +GBP24 +18Churn (2) 10.3% 9.6%An additional KPI summary table containing further detailed disclosurecan be found in Schedule 1.Business Performance (1)(unaudited)GBP'millions 6 months to 6 months to 31-Dec-11 31-Dec-12 MovementRevenue 3,533 3,364 +5%Adjusted operating profit 647 601 +8%% Adjusted operating profit margin 18.3% 17.9% +40bpsAdjusted profit before tax 610 564 +8%Adjusted basic earnings per 28.3 24.0 +18%share (3)(1) A reconciliation of adjusted operating profit and adjusted EBITDA toreported measures as well as cash generated from operations to adjustedfree cash flow is set out in Appendix 2.(2) Quarterly annualised.(3) Adjusted basic EPS is calculated from adjusted profit for theperiod. A reconciliation of reported profit to adjusted profit is setout in note 4 to the condensed consolidated interim financialstatements.Jeremy Darroch, Chief Executive, commented:"We have delivered another goodperformance in the first half withstrong progress across the board. In what remains a tough consumerenvironment, our broadly-based growth strategy is working well. Goodproduct growth in the quarter means that our total base of subscriptionproducts has grown by 10% year on year."During the half, we have investedin providing the best service to ourcustomers while continuing to drive greater operational efficiency. Westrengthened our content offering, extended our leadership in customertechnology and continued to lead the industry in customer service."As aresult, more households are joining Sky, our existing customersare staying loyal and they are choosing to spend more with us. Inparticular, we have seen a strong response to new services like OnDemand and Sky Go which increase customer satisfaction and loyalty andwill provide important sources of future growth."Together with ourcontinued focus on cost control and efficiencies,this has delivered another excellent financial performance andincreased returns to shareholders. We grew earnings per share by 18% inthe first half and have increased the interim dividend by a further 20%to 11 pence."Although we expect the consumer environment in 2013 to remainchallenging, we have a strong set of plans for the year ahead. We willkeep getting better on screen, further improve our products andservices for customers and maintain our focus on efficiency. Thebusiness is in good shape to continue to deliver for customers andshareholders."SUMMARY OF OPERATIONAL AND FINANCIAL PERFORMANCEThe business performed well in the first half as we invested inproviding the best possible service to customers while furtherimproving the efficiency of our operations. We continued to get betteron screen with new rights deals and original commissions; we maintainedour leadership in customer technology with rapid adoption of newproducts that enhance the viewing experience and make it easier forcustomers to access our content when and where they choose; and wecontinued to improve the quality and efficiency of our customer serviceoperations.This approach delivered a good operating performance and strongfinancial results. In a tough economic environment, more customers aretaking more products and spending more money with Sky. In the threemonths to 31 December 2012, we added 615,000 new products, taking thetotal base to 29.5 million, up 10% year-on-year. Meanwhile, we added88,000 new customers to reach a total of 10.7 million.In TV, we added 50,000 new customers in the quarter. Of these, 25,000are subscribers to our new internet TV service NOW TV, which benefitedfrom our first above-the-line marketing campaign in the autumn. We areset to launch sport on NOW TV later this year following beta testingwhich started in December.Customers now take an average of 2.7 products from us. This increasedpenetration of products, combined with a price rise in September, ourfirst for two years, grew ARPU to GBP568, a GBP24 increase on the previous year. Quarterly annualised churn was 10.3%.We delivered another strong quarter in home communications as wecontinue to outpace the rest of the market. Over the quarter, we added132,000 new broadband customers, of which 38,000 were new standalonecustomers, to take our total customer base to 4.2 million. Meanwhile,our telephony customer base passed the four-million mark for the firsttime with the addition of 134,000 customers. As a result, we closed thequarter with 3.6 million triple-play customers, up 17% on last year.With 33% triple-play penetration, we see good headroom for futhergrowth with over six million TV customers yet to switch theircommunications services to Sky.Our operating performance converted into a good financial performancefor the first half. The combination of 5% revenue growth and good costcontrol delivered an 8% improvement in adjusted operating profit ofGBP647 million, and expanded the adjusted operating margin to 18.3%.Adjusted basic earnings per share grew by 18% to 28.3 pence. On theback of the strong financial performance, the Directors have declaredan interim dividend of 11.00 pence per share, an increase of 20% yearon year.Getting better on screenWe made good progress on screen in the quarter as we continue tostrengthen our content business. We continue to see new record audiencefigures across our channel portfolio, we are bringing outstanding newtalent to Sky with new commissions, and we are seeing ever-increasinglevels of customer satisfaction.Within this, Sky Sports delivered a standout performance. Viewing wasup 9% in the quarter, building on a year that has seen record audiencesin key events including the Ryder Cup and US Open tennis. In its debutseason, the Sky Sports F1 channel reached more than nine millionviewers while Sky Sports on Sky Go, our mobile TV service, continues togrow in popularity, registering a record 234,000 unique users for livecoverage of the Manchester derby in December.We have made good progress in securing our portfolio of sports rights.We have signed 21 deals in the last 12 months meaning that 90% of oursports rights are now secured for the next three years. Today we haveannounced three brand new deals for live rugby union which will giveviewers live coverage of Ireland's Guinness Series together with Franceand Italy's Autumn Internationals. We also have an outstanding seriesof events coming up on Sky Sports this year including the Ashes homeand away, the Lions' tour to Australia and the Masters from Augusta - afantastic line-up for customers.Meanwhile, our Sky Movies experience continues to get better. Our SkyMovies 007 channel, which launched in October and ran initially for onemonth, was a huge success attracting more than 5 million viewers. Withan increasing number of our movies customers now with connected set-topboxes, we are also seeing a strong response to the choice we offerthrough our On Demand service. Total movie downloads across allplatforms doubled year on year to over 30 million in Q2 boosted by SkyMovies 007. We further strengthened our movies offering with theannouncement today of a new multi-year agreement with Sony. Thisfollows two other major renewals, with Warner Bros and NBCUniversal, inthe first half.Our portfolio of entertainment channels is resonating strongly, withSky Living, Sky Atlantic and Sky 1 all in the top five 'must have' paychannels for customers. The success of our strategy to grow investmentin original British content has delivered a 70% increase in hours oforiginal-commissioned programming in the first half compared to lastyear. We also saw 13 returning series in the half including'Strikeback' and'Spy'. We are putting a growing focus on originaldrama with some outstanding talent set to appear on Sky channels overthe coming year including Dominic Cooper, Vanessa Redgrave and IdrisElba. As well as bringing customers a better choice of television, wewill seek to monetise this growing content pipeline through ourinternational programme sales and production company, which we acquiredin the summer and rebranded as Sky Vision in October.Extending leadership in customer technologyWe strengthened our leadership in customer technology over the quarterwith growing take-up and usage of On Demand and Sky Go, services thatadd value for customers by offering more choice and flexibility in theway they can access Sky's content.The proportion of Sky households with fully-connected HD set-top boxescontinues to grow. Just under half a million boxes (460,000) wereactivated in the quarter, taking the total number of connected boxes to1.7 million. We expect to maintain good growth in this area in 2013.The growth in the number of connected boxes, combined with the launchof Catch Up TV and the addition of BBC iPlayer, ITV Player and DemandFive, drove a marked increase in the usage of our On Demand service.Average weekly downloads more than doubled in the quarter from 1.8million to 4.4 million by the end of December - more than four timesthe number of downloads 12 months earlier - with Sky content accountingfor more than 50% of the downloads. The growth in connected boxes alsoled to an increase in the number of transactions through Sky Store,with total movie transactions surpassing 3 million in the quarter, up25% year on year.We continue to expand the availability of Sky Go, extending it to anadditional 17 Android devices including the best-selling Samsung GalaxyS3 and the HTC One. This roll-out to new devices, combined with theaddition of more live and on demand entertainment content, helped theservice to reach 3.1 million unique users in the quarter, up 46% yearon year. Stand-out successes in the quarter included 'An Idiot Abroad'Season 3 which attracted more than 850,000 on-demand views across theseries. We will start to monetise this success in 2013 with the launchof Sky Go Extra, which, for an additional GBP5 a month, offers customersthe added flexibility of registering up to four devices per account(two more than currently) and downloading content to watch offline.We are also developing new ways to distribute our content to customerswith NOW TV, our new internet TV service. We continued to buildawareness of the service, which currently provides access to SkyMovies, with the launch of a new marketing campaign in the quarter,registering 25,000 monthly pass customers at the end of December. Weplan to develop NOW TV further with the launch of Sky Sports later thisyear, following a beta test of the service which started in December.Under the new offer, customers will get unlimited access for a 24-hourperiod to the full range of sports that we offer over all six SkySports channels for just GBP9.99.Improving service delivery and operational efficiencyGreater operational efficiency across the organisation continues todeliver the dual benefits of improved customer service and cost savingsfor the business. The improvements are driving greater customersatisfaction and at the same time give us increased capacity to investmore in the areas where customers see most value.Market-leading customer service remained a key area of focus in thequarter. Over 70% of our customers now have our most reliable Sky+HDbox, driving down annualised service rates by almost 90% versus fouryears ago. This has contributed to the lowest level of service visitsin eight years, despite a 41% increase in the number of customers overthat period. Improvements in service reliability have also led to a 15%reduction year on year in total calls to our contact centres.Meanwhile, improvements in our customer website have helped drive a 50%year-on-year increase in automated transactions. We expect to seefurther reductions in customer interactions following the introductionof our new 'Sky Hub' router in October, which provides additionalcapabilities to diagnose and fix faults remotely.As part of our drive to improve further the efficiency andeffectiveness of our home service operation, we have agreed a deal tobring around 700 engineers that work for our outsource partner, AVC,in-house as Sky employees later in 2013. This will give us oneintegrated nationwide team of engineers all working under a single setof processes. We have also this month opened a new contact centre inIreland where we are creating 900 new jobs to help us better serve ourIrish customers.Our initiatives on service delivery helped Sky to come top in Ofcom'sCustomer Service Satisfaction survey in December 2012 across all threeof fixed telephony, broadband and pay TV. We also received recognitionof our leading service from the consumer group, uSwitch, winning fourawards for best technical support, best customer service, mostrecommended broadband and best pay TV provider.Broader ContributionIn December, we announced that Olympic gold medalist Jessica Ennis hasbecome one of our inspirational ambassadors for Sky Sports Living forSport, our free initiative to help improve confidence and attitudes tolearning among secondary school children through sports participation.The project is reaching more young people than ever with over 1,000schools taking part since September, a four-fold increase over the sametime last year.Sky Skills Studios, our free learning experience for young people to gobehind the scenes at Sky, has received over 3,500 visitors since launchin September. It is getting great feedback from teachers and childrenalike, and we expect to reach over 10,000 young people across the year.We also continue to invest in the Arts, both on air and in thecommunity. The first of our Sky Arts Ignition Series where wecollaborate with major arts organisations and artists to create newworks, Sky Arts Ignition: Doug Aitken - The Source, continued at TateLiverpool attracting over 50,000 visitors by the time it closed in midJanuary.We have just announced the second of our Sky Arts IgnitionSeries projects, the development of an exhibition called Sky ArtsIgnition: Memory Palace in partnership with the V&A which will open tothe public in June.DETAILED FINANCIAL PERFORMANCEWe continue to deliver a strong financial performance. First halfrevenue growth of 5% and good discipline in keeping adjusted otheroperating costs flat helped to deliver adjusted operating profit growthof 8% to GBP647 million, and adjusted basic earnings per share of 28.3p,up 18%. Unless otherwise stated, all figures and growth rates includedbelow exclude exceptional items. Exceptional items are discussed onpage 9 and in Appendix 2.RevenueGroup revenue increased by 5% to GBP3,533 million (2012: GBP3,364 million), with growth in both retail and wholesale operations more thanoffsetting reductions in the more cyclical businesses in advertisingand pubs and clubs.Retail subscription revenue grew by 5% to GBP2,907 million (2012: GBP2,764 million), reflecting continued product and customer growth and thebenefit of price increases which came into effect in September. Thestrong performance in retail more than offsets a first half decline inSky Business revenues (pubs and clubs) which continue to face cyclicalheadwinds; although recent performance has shown signs of recovery.We delivered a strong performance in wholesale subscription revenuewhich increased by 14% to GBP194 million (2012: GBP170 million) as wecontinue to benefit from greater take-up of our premium channels andtheir HD versions on other platforms, together with the launch andsuccess of our dedicated Formula 1 channel.Advertising revenue improved on the previous quarter to be down just 3%for the period at GBP215 million (2012: GBP222 million). We continued toincrease our market share to reach 21%, with the majority of thisgrowth underpinned by increased ratings for our media partner channels,with whom we share revenue upside.Installation, hardware and service revenue of GBP47 million was loweryear-on-year (2012: GBP51 million) due to lower acquisition volumes andour work on product reliability and right-first-time installationrates.Other revenue increased by 8% to GBP170 million (2012: GBP157 million) due to continued strong performance from Sky Bet which saw an increase inunique users in the period, and the international programme salesrevenue generated by Sky Vision.Direct CostsProgramming costs increased by GBP113 million (10%) to GBP1,222 million(2012: GBP1,109 million) in line with our expectations. Sports accountedfor GBP48 million of the increase which was predominantly due to theinclusion of Formula 1 and Ryder Cup rights not in the prior yeartogether with the England and Sri Lankan cricket tours to India andAustralia respectively. Movie costs increased GBP23 million year-on-yearand included investment in expanded rights agreements to support newproduct offerings such as Sky Go Extra. Entertainment accounted for GBP30 million of the increase as we continued to invest in new and exclusiveUK-commissioned content across our channel portfolio.Our work on network efficiency within our communications businessresulted in excellent operating leverage in direct network costs, uponly 4% to GBP348 million (2012: GBP336 million) despite a 19% increasein home communications products.Other Operating CostsWe continued to focus on costs and once again delivered a strongperformance, holding other operating costs flat in absolute termsyear-on-year and generating a 200 basis point reduction of costs as apercentage of sales.Marketing costs were flat at GBP541 million (2012: GBP541 million) withlower cost route-to-market sales and lower acquisition volumesoffsetting the cost of Sky+ and On Demand campaigns in the period andthe marketing support for the launch of NOW TV.Subscriber management and supply chain costs were also held flat atGBP323 million (2012: GBP323 million) as we continue to benefit fromlower service and repair costs as a result of deeper penetration of ourmost reliable Sky+HD box. We also generated savings from receiving fewercalls into the call centres as we focus on getting it right first timetogether with increased utilisation of the online self-help options.Transmission, technology and fixed network costs were down 1% at GBP193million (2012: GBP194 million) as favourable renegotiation of suppliercontracts offset the modest incremental cost of the Formula 1 channeltransmission. Administration costs were held flat at GBP259 million(2012: GBP260 million).Exceptional ItemsReported operating profit of GBP679 million includes an exceptional gainof GBP32 million within direct network costs relating to a credit notereceived from BT following an Ofcom determination which requires BT torepay monies to Sky for overcharged-for Ethernet services (backhaul)between 2006/07 and 2009/10. Ofcom's determination may be appealed inthe Competition Appeal Tribunal. Subject to the outcome of any suchappeal, we intend to ensure that our customers benefit from thisdecision by spending the majority of this on a one-time basis incustomer-facing areas of the business in the second half of the year.Reported profit after tax of GBP487 million (2012: GBP441 million)includes an GBP8 million charge relating to the tax effect onexceptional items andgenerated reported basic earnings per share of29.7 pence (2012: 25.3 pence). Please refer to Appendix 2 for adetailed reconciliation of reported and adjusted numbers.Cash generated from operationsAdjusted free cash flow was 3% lower at GBP482 million (2012: GBP495million) reflecting growth in adjusted EBITDA, lower interest and taxpayments and lower capital expenditure, offset by a negative workingcapital variance as a result of increased commissioning ofentertainment content and scheduling of payments for renewed sportsrights deals.Capital expenditure of GBP207 million (2012: GBP237 million), was lowerin the first half due to phasing in the comparative year; specifically,the autumn 2011 completion of the fit-out of Sky Studios and theacceleration of our exchange roll-out programme.Net debt increased to GBP1,201 million (2012: GBP615 million) primarilyas a result of the approved share buy-back and 2011/12 final dividend.During the period, the Group took advantage of historically low pricingto raise $800 million from the issuance of guaranteed notes, maturingin November 2022 and with a 3.125% coupon. The Group's liquidity andheadroom remain comfortable. For a reconciliation of net debt seeAppendix 2.Distribution to ShareholdersThe Directors have declared an interim dividend of 11.00 pence pershare (2012: 9.20p) representing an increase of 20% and the ninthconsecutive year of an increase in the interim dividend forshareholders. As previously stated, our intention is to maintain apolicy of paying out 50% of full year adjusted earnings as dividendswith the final dividend payment typically forming the higher proportionof the total dividend. The ex-dividend date will be 27 March 2013 andthe dividend will be paid on 23 April 2013 to shareholders of record on2 April 2013.At the Company's AGM on 1 November 2012, Sky received shareholderapproval to return a further GBP500 million of capital to shareholdersvia a share buy-back programme. For the six months to 31 December 2012,the Company repurchased for cancellation 54.8 million shares for totalconsideration of GBP414 million, partly pursuant to the GBP750 millionauthority approved at the 2011 AGM and partly under the new GBP500million share buy-back programme. The closing share count at the endof the quarter was 1,620 million.CORPORATEBoard changesThe Company announces that Tom Mockridge resigned as a non-executivedirector and Chase Carey has been appointed a non-executive director ofthe Company on 30 January 2013. Mr Carey is currently the DeputyChairman and Chief Operating Officer of News Corporation and serves onthe supervisory board of Sky Deutschland AG. He was formerly Presidentand Chief Executive Officer of DIRECTV, Inc and served on the Board ofBSkyB as a non-executive director of Sky from 13 February 2003 to 10February 2009.Competition Appeal Tribunal (CAT)On 8 August 2012, the Competition Appeal Tribunal (the "CAT") issuedits judgment in the appeals against Ofcom's decision to imposewholesale must-offer obligations on Sky (the "Pay TV Judgment"). TheCAT found that Ofcom's core competition concerns were unfounded andthat accordingly Sky's appeal must be allowed. In November 2012, BTsubmitted a request to the CAT for permission to appeal the Pay TVJudgment to the Court of Appeal. If denied by the CAT, BT can apply tothe Court of Appeal directly for permission. The CAT has listed an oralhearing for 6 February 2013 to determine how to dispose of the case,including dealing with setting aside the wholesale must-offer ("WMO")obligations, the monies paid by relevant wholesale customers intoescrow on an interim basis (being the difference between the maximumprice Sky may charge for Sky Sports 1 and Sky Sports 2 under the WMOobligations and Sky's rate card prices for the channels) and costs.The CAT will also determine the effect (if any) of any ongoing appealby BT.At 31 December 2012, GBP27 million of cash is being held in the escrowaccount.Enquiries:Analysts/Investors:Edward Steel Tel: 020 7032 2093Lang Messer Tel: 020 7032 2657E-mail: investor-relations@bskyb.comPress:Alice Macandrew Tel: 020 7705 3000Stephen Gaynor Tel: 020 7705 3000E-mail: corporate.communications@bskyb.comThere will be a presentation for analysts and investors at 9.00 a.m(GMT) at Allen & Overy, One Bishops Square, London, E1 6AD. CEO, JeremyDarroch and CFO, Andrew Griffith, will present. Participants shouldregister by contacting Camilla Regan on +44 20 7251 3801 or atcamilla.regan@RLMFinsbury.com.There will be a separate conference call for US analysts and investorsat 10.00 a.m. (EST). To register for this please contact Dana Diver atTaylor Rafferty on +1 212 889 4350. Alternatively you may registeronline by using the following linkhttp://invite.taylor-rafferty.com/_bskyb/2013Q2CC/Default.htm .A live webcast of the UK and US call will be available to analysts andinvestors via the BSkyB website at http://www.sky.com/corporate.Replays will be subsequently available.Schedule 1 - KPI SummaryAll figures(000) FY10/11 FY11/12 FY12/13unlessstated Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2Total 10,150 10,223 10,294 10,371 10,471 10,549 10,606 10,654 10,742customers 10,096 10,147 10,187 10,213 10,253 10,268 10,288 10,308 10,333 Television NOW TV - - - - - - - - 25 Sky+HD 3,497 3,686 3,822 3,925 4,063 4,222 4,343 4,468 4,561 Multi- room 2,219 2,237 2,250 2,295 2,350 2,378 2,402 2,423 2,467 Broad- band 3,006 3,161 3,335 3,485 3,651 3,863 4,001 4,103 4,235 Tele- phony 2,757 2,916 3,101 3,248 3,407 3,627 3,768 3,888 4,022 Line 2,215 2,444 2,680 2,892 3,106 3,376 3,563 3,708 3,870 RentalTotalpaid-for 23,790 24,591 25,375 26,058 26,830 27,734 28,365 28,898 29,513subscriptionproductsConnected 204 442 604 995 1,255 1,715HD boxesSky Go 1,625 2,107 2,607 2,740 2,768 3,066unique usersTotal 27,887 29,379 30,945 32,100 32,921 34,294ProductsOthermetricsTriple-play % 24% 26% 27% 28% 29% 31% 32% 33% 33%ARPU(GBP)GBP536 GBP537 GBP538 GBP535 GBP544 GBP546 GBP548 GBP550 GBP568Churn 9.5% 10.4% 10.4% 11.1% 9.6% 10.1% 9.9% 10.9% 10.3%FixedNetworkMetricsOn-netbase 2,659 2,856 3,045 3,205 3,403 3,636 3,778 3,882 4,031 MPF base 1,247 1,435 1,686 1,869 2,146 2,423 2,588 2,762 2,926 SMPF base 1,412 1,421 1,359 1,336 1,257 1,213 1,190 1,120 1,105 MPF % 47% 50% 55% 58% 63% 67% 69% 71% 73% SMPF % 53% 50% 45% 42% 37% 33% 31% 29% 27%Off-netbase 347 305 290 280 248 227 223 221 204Total 3,006 3,161 3,335 3,485 3,651 3,863 4,001 4,103 4,235BroadbandOn-net % 88% 90% 91% 92% 93% 94% 94% 95% 95%Total no.ofLLU 1,434 1,549 1,577 1,732 1,907 1,964 1,965 2,036 2,108exchangesRelated Party TransactionsDetails of transactions with related parties during the six monthperiod to 31 December 2012 are provided in Appendix 1.Principal risks and uncertaintiesA summary of the Group's principal risks and uncertainties is providedin Appendix 3.Responsibility statementThe directors confirm that to the best of their knowledge:* The unaudited condensed consolidated interim financialstatements have been prepared in accordance with IAS 34 as adopted bythe EU.* The interim management report includes a fair review of theinformation required by DTR 4.2.7R and DTR 4.2.8R of the Disclosure andTransparency Rules.The directors of British Sky Broadcasting Group plc are listed on pages40-41 of the 2012 Annual Report. At the Company's AGM on 1 November2012 Jacques Nasser retired from the Board and on 30 January 2013 TomMockridge retired from the Board. On 16 November 2012 Dave Lewis wasappointed to the Board as an Independent Non-Executive Director and on30 January 2013 Chase Carey was appointed to the Board as aNon-Executive Director.By order of the BoardJeremy DarrochChief Executive OfficerUse 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 business,and our strategy, plans and objectives for the Group. These statementsinclude, without limitation, those that express forecasts, expectationsand projections, such as forecasts, expectations and projections inrelation to new products and services, the potential for growth offree-to-air and pay television, fixed line telephony, broadband andbandwidth requirements, advertising growth, DTH and OTT customergrowth, On Demand (previously Anytime+), NOW TV, Sky Go, Sky+HD andother services penetration, revenue, administration costs and othercosts, advertising growth, churn, profit, cash flow, products and ourbroadband network footprint, content, wholesale, marketing and capitalexpenditure and proposals for returning capital 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. These factors include, but are not limited to,those risks that are highlighted in the document in Appendix 3 -"Principalrisks and uncertainties."All 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.Glossary of TermsA glossary of terms is included within the Annual Report and on ourcorporate investor relations web page at http://corporate.sky.com/investors/glossary. Copies of the Annual Report are available from theBritish Sky Broadcasting Group plc web page at www.sky.com/corporateand in hard copy from the Company Secretary, British Sky BroadcastingGroup plc, Grant Way, Isleworth, Middlesex TW7 5QD.Click on or paste the following link into your web browser to viewassociated PDF document.http://www.rns-pdf.londonstockexchange.com/rns/7521W_-2013-1-30.pdf This information is provided by RNS The company news service from the London Stock ExchangeEND





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