British Sky Broadcasting (NYSE: BSY) has released its first quarter results for the three months ending March 31st, showing an increase in revenue of 10 percent year-on-year to 3,376 million pounds (US$6,736 million), which included 41 million pounds (US$81.8 million) from residential broadband and 117 million pounds (US$233.4 million) from Easynet Enterprises. The company reported an operating profit of 613 million pounds (US$1,223 million), a fall of 7.1 percent from the year-ago figure of 660 million pounds. The profit included a net exceptional gain of 56 million pounds, residential broadband losses of 120 million pounds (US$239 million) and Easynet Enterprise losses of 17 million pounds (US$33.9 million).
New customer additions for the first quarter were up 25 percent year-on-year to 340,000, with net customer growth of 51,000 to 8.492 million — a year-on-year increase of 28 percent. There was a growth in Sky+ households of 199,000, up 34 percent year-on-year to 2.167 million — the 25 percent penetration target was exceeded three years ahead of plan.
Wholesale subscription revenue fell by 5 percent to 162 million pounds (US$323.1 million) and included the impact from the expiry (and non-renewal) of the contract to supply Sky’s basic channels to Virgin Media part way through the quarter.
Advertising revenue increased by 1 million pounds to 258 million pounds (US$514.7 million), which is a small increase but better than the overall TV advertising sector, which BSkyB estimates contracted by about 5 percent over the same period.
From the conference call:
Much was made of the fact that 17 percent of new HD customers, 25 percent of new broadband customers and 26 percent of new Sky+ customers were new customers to Sky group.
Over 90 percent of commissioned content on Sky1 and other channels will be broadcast in HD — the company is producing 3,000 hours of high definition content per month, which is more than the highest terrestrial output in standard definition in the marketplace.
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