BSkyB Fourth Quarter Results

[Gareth]

Not seen this posted anywhere else on the site, but BSkyB announced their fourth quarter results on Friday...

British Sky Broadcasting Group Plc said fiscal fourth-quarter profit fell 12 percent on costs to start a broadband service to lure customers from Virgin Media Inc. and BT Group Plc.

Net income declined to 111 million pounds ($227 million), or 6.3 pence a share, from 126 million pounds, or 7 pence, a year earlier...

...Sales at BSkyB, the U.K.'s largest pay-television company, rose 9.9 percent to 1.18 billion pounds in the three months ended June.

...

BSkyB added 259,000 broadband customers in the period, reaching 716,000 and beating its target of 700,000.

Net income was predicted to fall 8 percent to 116 million pounds, based on the average of two estimates compiled by Bloomberg. Sales at BSkyB were predicted to rise 8.6 percent to 1.16 billion pounds, the average of six estimates showed.

...

The company won clients by adding broadband and bundling it with pay-TV and telephone offerings. BT, the U.K.'s biggest phone company, said yesterday that it won 170,000 net new broadband clients in the quarter, or 38 percent of the 459,000 total.

Shares of BSkyB fell 7 pence, or 1 percent, to 668.5 pence in London trading. The shares have risen 28 percent this year.

BSkyB said this month that it would meet analysts' 2007 operating profit forecasts. BSkyB, 39 percent-owned by Rupert Murdoch's New York-based News Corp., added 90,000 net new TV clients in the quarter for a total of 8.58 million.

The company had 292,000 high-definition TV customers and 2.37 million Sky Plus customers, or 28 percent of its client base.

...

Earnings before interest, taxes, depreciation and amortization, a measure of cash flow, fell 1.5 percent to 257 million pounds. Ebitda was predicted to decline 7.4 percent to 243 million pounds from a year earlier, the average of four estimates showed.

source: http://www.bloomberg.com/apps/news?p...x39OM&refer=uk

On the face of it Sky's figures don't look great compared to the same quarter of last year's, but digging slightly shows that this is almost all down to the broadband setup costs, so in fact they're looking a lot healthier than first thought.

Business Week are saying that...

BSkyB entered the broadband market when it bought Internet service provider Easynet. It is now facing stiff pricing competition in the "triple play" market, where providers offer combined television, broadband and phone services, from BT Group PLC and Virgin Media Inc..

UBS analysts said that BSkyB, the dominant pay-TV operator, still provided the best service.

"In our view, Sky has the best product and pricing in the triple play space, which should drive strong operational momentum and a re-rating," the UBS analysts said in a note.

Overall, I'd say that BSkyB look in a very healthy position now having bolstered their product portfolio and it not having hit their balance sheet too badly all things considered.