BSkyB profits dip despite revenue rise

19th October 2011, Comments 0 comments

British pay-TV giant BSkyB said Wednesday that net profits dipped in the first quarter of the group's financial year despite a solid jump in revenues and it winning a fee for News Corp.'s failed takeover.

Earnings after tax slid 1.3 percent to £225 million ($354 million, 257 million euros) in the three months to the end of September, compared with the same period of the previous fiscal year, BSkyB said in a results statement.

Profits fell even though BSkyB earned a £39-million break-fee for the scrapped takeover deal from Rupert Murdoch's News Corp., which remains the group's biggest shareholder with a 39-percent stake.

BSkyB, which also offers Internet and telephone services, added that the latest results were skewed because the company had last year made a large exceptional gain from the sale of its telecoms unit Easynet Global Services.

"We have made a good start to the year. In what remains a challenging consumer environment, our financial performance was strong," the company said.

BSkyB, which broadcasts live English Premier League football and blockbuster movies, said the number of household subscribers increased by 77,000 to 10.371 million in the first quarter. Revenues rose nine percent to £1.66 billion.

"We continue to deliver strong financial results and good growth in customers and products," chief executive Jeremy Darroch said in Wednesday's earnings release.

"Looking ahead, the environment is likely to remain challenging as a result of the pressures facing consumers in the UK and Ireland."

Rupert Murdoch's News Corporation abandoned its bid to win full control of BSkyB earlier this year after a phone-hacking scandal forced it to close the British tabloid newspaper News of the World.

News Corp. had in June 2010 bid £7.8 billion for the 60.9 percent of BSkyB it did not already own. BSkyB, whose portfolio includes the rolling Sky News channel, rejected the 700-pence-per-share offer even before the bid collapsed.

BSkyB's share price, which had rocketed to 850 pence amid the takeover battle, stood at 706 pence following Wednesday's results -- up 4.52 percent compared with the previous day's close.

London's benchmark FTSE 100 index, on which BSkyB shares are traded, was up 1.23 percent at 5,476.62 points in morning deals.

Back in July, BSkyB offered its shareholders a sweetener of more than £1.0 billion in payouts as it sought to move on from News Corp.'s failed bid.

The group unveiled plans for a share buyback of £750 million and a shareholder dividend of £253 million. As BSkyB's biggest shareholder, News Corp. received nearly £400 million from the payouts.

The pay-TV company also insisted that Murdoch's son James would remain its chairman despite the phone-hacking row at News Corp.

© 2011 AFP

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