BSkyB Pretax Profit Jumped 66% on Subscriber Growth
May 03, 2011
LONDON -- British Sky Broadcasting PLC reported a 66% jump in pretax profit for the fiscal year ended March 12, 2011 continued robust growth in subscribers. The satellite broadcaster, which is 40%-owned by News Corp., also said it is moving ahead with plans to introduce services such as home banking and expanded pay-per-view offerings when it launches a new digital-TV package with additional channels in late 2012. The company's pretax profit rose to 257.4 million ($397.8 million) from 155.3 million the year before, in line with analysts' expectations. Revenue rose 30% to 1.01 billion. The number of subscribers jumped by 900,000 to 5.5 million, leading the jump in revenue. The company also said that increased advertising revenue and a fall in debt servicing contributed to the rise in profits. BSkyB's stock, which has soared more than 65% in the last year on hopes pinned to expansion plans, slipped two pence in London trading Tuesday, closing at 535 pence, due to profit-taking. Most analysts said they expect BSkyB to post similar growth rates up until the end of the decade. The company plans to launch another 11 channels this fall, pushing the total to more than 40, followed by further expansion to as many as 200 channels when it goes digital late next year. The company also confirmed that it was in discussions with British Telecommunications PLC concerning the launch of digital television. The two companies are discussing possible joint production of the set-top decoder boxes and on the supply of interactive services. The company declined to give any more details. Still, some analysts caution that BSkyB is likely to face increasing competition in the future.
