Bloomberg News

BSkyB Says Profit Increases on High-Speed Internet Customers (1)

May 02, 2013

British Sky Broadcasting Group Plc (BSY), the U.K.’s largest pay-TV broadcaster, said operating profit for the first nine months climbed 9 percent as it won customers for high-speed broadband.

Adjusted earnings before interest, taxes, depreciation and amortization in the nine months through March rose to 994 million pounds ($1.54 billion) from 908 million pounds a year earlier, the Isleworth, England-based company said in a statement. Sales advanced 6 percent to 5.38 billion pounds.

BSkyB is under increasing pressure as rivals invest in Web service and sports programming, where Sky’s dominance has helped it win and retain pay-TV customers. The company said in March it agreed to buy Telefonica SA (TEF)’s broadband and fixed-line phone division in the U.K. for 200 million pounds.

“These results highlight the way that our successful transition to more broadly-based growth has created a bigger, more profitable business,” Chief Executive Officer Jeremy Darroch said in the statement. “And having more ways to grow serves us particularly well at a time when household budgets look likely to remain stretched.”

BSkyB rose 1.4 percent to 856.5 pence in London trading at 8:04 a.m. The stock has gained 22 percent in the past 12 months.

BSkyB said it added 152,000 broadband subscribers in the third quarter and has increased its customer base for high-speed Web service by 524,000 in the last 12 months.

Sports Rights

The company also said today that it won the rights to the U.S. Open tennis matches for three years beginning this year, in a renewal of its prior broadcast deal. BSkyB spends more than 2 billion pounds a year on content, including exclusive rights to show popular sports, such as the Premier League soccer games, and movies. BSkyB began a channel dedicated to Walt Disney Co. (DIS:US) movies in March, with first-run rights to films such as “Brave” and “Wreck-It Ralph,” as well as older movies such as “Finding Nemo.”

Billionaire John Malone has agreed to buy Virgin Media Inc. (VMED:US), combining the BSkyB competitor’s high-speed fiber-optic Internet infrastructure with his cable giant Liberty Global Inc. (LBTYA:US) BT, the U.K.’s biggest broadband provider, has said its BT Sport channel will start broadcasting this summer, potentially threatening BSkyB’s dominance in programming.

Bundles that include Internet, phone and television, and sometimes mobile-phone service, are becoming increasingly popular as companies in these industries look for ways to reverse slowing growth and lock in customers.

To contact the reporter on this story: Amy Thomson in London at athomson6@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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