Blog Post

Earnings: BSkyB Income Down A Quarter On Broadband, ITV, Legal Costs

BSkyB (NYSE: BSY) committed a full £103 million to its broadband rollout in the second half of 2007 – and saw its customer base grow 260,000 to 1.199 million. The company invested £91 million in Sky Broadband and Sky Talk telephony plus £12 million in the Easynet Enterprise unit – both of which are recorded as operating losses. “Looking to 2009, we expect that the peak of investment in broadband will be behind us.”

Sky clocked up a £343 million impairment charge for the 17.9 percent ITV (LSE: ITV) stake it has to divest and its legal case against EDS, which it accused of failing to deliver a promised customer service system, also brought home a £12 million exception item loss.

Sky+ DVR saw record 16 percent growth to 3.131 million and HD subscribers grew 18 percent to 422,000. Average revenue per customer rose to a record £421. Accounting for those exceptional items, overall operating profit was £295 million – down a troubling 25 percent. Release.

Meanwhile, the Advertising Standards Authority has rejected a complaint from BSkyB and others about a Virgin Media (NSDQ: VMED) ad that criticised copper-wire broadband services. Adjudication here.