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Nadeem
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 Posted: Wed Aug 24, 2005 3:20 am Post subject: BSY - B SKY B GROUP Discussion Thread |
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Quinn
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| Posted: Sun May 14, 2006 4:55 pm Post subject: |
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oki doki heres results from BSKYB
BRITISH SKY BROADCASTING GROUP PLC
Results for the nine months ended 31 March 2006
BSkyB announces record operating profit, up 15% to £660 million for the year to
date, continued improvement in customer mix and the successful implementation of
new customer management systems
Growth in new customers
Net DTH subscriber growth of 40,000 in the quarter to 8.1 million
Further improvement in product mix
One in five customers now taking an additional service
86% growth in Sky+ households to 1,430,000, 18% of total DTH subscribers
76% growth in Multiroom households to 990,000, 12% of total DTH subscribers
Achieved three key objectives for the quarter
Completion of new customer management systems implementation
Sky HD on track to launch nationwide on 22 May
Broadband from Sky on track for summer launch - currently unbundling 12
exchanges per week
Strong financial performance
Revenue increased by 9% to £3,079 million(1)
Gross margin expanded by four percentage points to 61%(1)
Operating profit increased by 15% to £660 million, a margin of 21%(1)
Profit for the period increased by 10% to £425 million
Basic earnings per share increased by 16% to 23.2 pence
Cash generated from operations increased by 9% to £696 million
(1) Under IFRS, betting payouts have been netted against gross Sky Bet revenues
(see Financial Review)
James Murdoch, Chief Executive said:
'The business is performing well and is delivering on the plan we laid out for
2006. Our focus during the quarter was to successfully implement our new
customer management systems, complete the final preparations for the launch of
Sky HD, and continue to ready the business for the launch of residential
broadband services in the summer. Operational achievements in the quarter were
outstanding. We achieved our goals, continued to grow our customer base and
increased the number of products they choose to take from us'
Results highlights
All financial results have been prepared in accordance with International
Financial Reporting Standards ('IFRS'), including comparatives.
Key subscriber information 2006 2005 Change % Change
Net DTH subscriber additions(1) 40,000 95,000 -55,000 -58%
Total DTH subscribers(2)(3)(4)(5) 8,099,000 7,704,000 395,000 5%
Net Sky+ household additions(1) 149,000 128,000 21,000 16%
Total Sky+ households(2) 1,430,000 770,000 660,000 86%
Net Multiroom household additions(1)(6) 84,000 90,000 -6,000 -7%
Total Multiroom households(2) 990,000 563,000 427,000 76%
Income statement (£m) Nine months to 31 March
2006 2005 Change % Change
Revenue 3,079 2,813 266 9%
Operating profit 660 573 87 15%
Operating profit margin 21.4% 20.4% 1.0% 4.9%
Profit before taxation 609 546 63 12%
Profit for the period 425 385 40 10%
Cash flow information (£m) Nine months to 31 March
2006 2005 Change % Change
Cash generated from operations 696 636 60 9%
Net debt(2)(7) 667 422 245 58%
Per share information (pence) Nine months to 31 March
2006 2005 Change % Change
Basic earnings per share 23.2 20.0 3.2 16%
1. In the three months to 31 March
2. As at 31 March
3. Includes DTH subscribers in Republic of Ireland. (407,000, as at 31
March 2006, 355,000, as at 31 March 2005.)
4. DTH subscribers include only primary subscriptions to Sky (no
additional units are counted for Sky+ or Multiroom subscriptions). This
does not include customers taking Sky's freesat offering or churned
customers viewing free-to-air channels.
5. DTH subscribers include subscribers taking Sky packages via DSL through
Kingston Interactive Television and Homechoice.
6. Multiroom includes households subscribing to more than one digibox.
(No additional units are counted for the second or any subsequent
Multiroom subscriptions.)
7. Cash, cash-equivalents, short-term deposits, borrowings and borrowings
related financial instruments
Enquiries:
Analysts/Investors:
Andrew Griffith Tel: 020 7705 3118
Robert Kingston Tel: 020 7705 3726
E-mail: investor-relations@bskyb.com
Press:
Matthew Anderson Tel: 020 7705 3267
Robert Fraser Tel: 020 7705 3036
E-mail: corporate.communications@bskyb.com
Finsbury:
James Leviton Tel: 020 7251 3801
A conference call for UK and European analysts and investors will be held at 8:
30 a.m. (BST) today. To register for this, please contact Silvana Marsh at
Finsbury on +44 20 7251 3801. A live webcast of this call and replay facility
will be available on Sky's corporate website, http://www.sky.com/corporate.
There will be a separate conference call for US analysts and investors at 10.00
a.m. (EST) today. Details of this call have been sent to US institutions and can
be obtained from Rebecca Lohse at Taylor Rafferty on +1 212 889 4350.
OVERVIEW
During the three months ended 31 March 2006 ('the quarter'), the Group made
significant progress in the three main areas identified for the first half of
this calendar year:
Completion of the programme to implement new customer management systems;
Final preparations for the national launch of high definition television
('Sky HD') this month; and
Substantial progress in preparation for the launch and roll-out of residential
broadband services in the summer.
On 31 March 2006, the Group successfully completed the implementation of its new
customer management systems. These flexible and scalable systems represent a
major investment in continuing to serve customers better and will enable the
Group to improve sales, increase customer satisfaction, reduce churn and bring
to market new products and services with greater speed and effectiveness. In
addition, the Group is planning to expand its substantial customer service
infrastructure to meet the continued growth of the business. As part of this,
the Group is creating 600 new jobs in the UK within its permanent field
engineering operations.
Sky HD will launch nationally across the UK and Ireland on 22 May 2006 and since
bookings were opened to the general public on 13 April 2006, there has been
encouraging customer demand. Sky HD will provide customers with the best TV
viewing experience with pictures four times more detailed than standard
definition and the highest quality sound from Dolby Digital 5.1. Sky HD offers a
wide range of HD channels including Sky Sports, Sky Movies, Sky One, National
Geographic and Discovery, which announced its intention to offer an HD channel
on 17 January 2006. Customers with a Sky HD box will also be able to watch the
BBC's live coverage of the 2006 Football World Cup in high definition.
Since the acquisition of Easynet, good progress has been made in the unbundling
of BT exchanges in order to reach a targeted 70% coverage of UK homes by
December 2007. The Group currently has its own equipment in 259 BT exchanges and
plans to reach around 379 BT exchanges by 30 June 2006, taking the total number
of homes passed to around 7.5 million, or 30% of UK homes. The Group intends to
announce details of its consumer proposition ahead of launching residential
broadband services in the summer.
OPERATING REVIEW
At 31 March 2006, the total number of DTH digital satellite subscribers was
8,099,000, representing a net increase of 40,000 in the quarter. In line with
its previous guidance, the Group anticipates net additions of around 60,000 in
the fourth quarter.
As Sky moves towards delivering whole home solutions, customers continue to
demonstrate strong demand for new products and additional services. Over 12% of
customers now take a Multiroom subscription and 18% subscribe to Sky+ meaning
that one in five is now taking an additional service.
Following record sales last quarter, Sky+ continues to deliver outstanding
levels of growth. At a re-established price point of £99, the total number of
Sky+ households increased by 149,000 in the quarter to 1,430,000, the highest
ever growth outside of a Christmas quarter. Sky+ continues to attract new
customers as well as providing an upgrade path for existing customers. Almost
one third of customers who subscribed to Sky+ during the quarter were new to
Sky.
During the quarter, the number of Multiroom subscriptions exceeded one million.
This equated to 990,000 households, an increase of 84,000 in the quarter.
Following the quarter end, Sky has exceeded one million Multiroom households and
remains on track to achieve its 2010 target of 30% penetration.
Annualised average revenue per DTH subscriber ('ARPU') for the quarter was £392,
a £10 increase on the three months to 31 March 2005 ('the comparative quarter').
ARPU for the quarter was £5 lower than the three months to 31 December 2005
('the prior quarter'). This reflects the seasonal movement of customers between
subscription tiers and a full quarter's impact of the pre-Christmas promotional
offers.
DTH churn for the quarter (annualised) increased by 0.8% on the prior quarter to
11.4%. This seasonal movement, as experienced in prior years, takes DTH churn,
annualised for the nine months to 31 March 2006 ('the period') to 11.3%. The
Group continues to expect churn for the 2006 financial year to be around 11% and
has a medium term target for churn of around 10%.
Sky continued to enhance its leading position in content during the quarter. On
27 February 2006, Sky and Disney announced a wide ranging series of agreements
to expand the portfolio of content available to Sky digital customers. Two new
channels, Disney Cinemagic and ESPN Classic have been launched, and the
established channel brands of the Disney Channel and Playhouse Disney have been
made available to millions more Sky viewers, as part of the kids mix package of
basic channels. In addition, Sky movies customers will be able to enjoy a wide
range of Walt Disney Studio films, including the forthcoming Premieres of
'Pirates of the Caribbean: Dead Man's Chest', 'The Chronicles of Narnia: The
Lion, The Witch and The Wardrobe,' and Pixar's 'The Incredibles' as well as
classic Disney favourites such as 'Lady and the Tramp' and 'Cinderella'.
FINANCIAL REVIEW
As announced on 25 April 2006, following recent changes in industry practice
regarding the accounting for betting revenues and costs under IFRS, betting
payouts have been netted against Sky Bet revenues. Accordingly, all financial
results, including comparatives have been prepared on this basis. There is no
effect on operating profit.
Total revenues increased by 9% over the nine months ended 31 March 2005 ('the
comparable period') to £3,079 million.
DTH revenues grew by 8% to £2,352 million behind 5% growth in the average number
of DTH subscribers and 3% growth in average DTH revenue per subscriber,
principally due to the September 2005 price rise.
Wholesale revenues continue to under perform, increasing by 2% on the comparable
period to £170 million. This increase reflects the change in wholesale prices in
September 2005, which has been partially offset by a decline in the number of
premium cable TV subscribers.
Despite an estimated decline in the UK television advertising sector of 0.6%,
advertising revenue increased by 6% to £257 million. This reflects further
strong growth in Sky's share of the UK television advertising sector which now
stands at 12.9%.
Sky Bet revenues increased by 17% on the comparable period to £27 million. This
comprised a 28% increase in gross Sky Bet revenues to £239 million, driven by
the strong growth in Sky Vegas revenues and a 30% increase in betting payouts to
£212 million.
Sky Active revenues remained flat at £67 million. Growth in revenues generated
from using the red button, which includes interactive advertising and enhanced
TV were offset by lower revenues from other areas of the business, including the
SkyBuy retail service, which was wound down and closed in the final quarter of
last financial year.
Other revenues grew by 43% to £206 million, a £62 million increase on the
comparable period. Excluding £38 million of revenue generated by Easynet,
primarily from the corporate business, other revenue grew by £24 million, an
increase of 17% on the comparable period. This reflects higher digibox revenues
associated with increased sales of Sky+ and Multiroom, the inclusion of the Sky
News channel five contract and revenue generated from Sky's credit card,
'SkyCard'.
Total programming costs reduced by £3 million on the comparable period to £1,207
million. Sports costs increased by £6 million behind additional UEFA Champions
League qualifying matches and other volume driven increases, partly offset by
the absence of the bi-annual Ryder Cup. Third Party channel costs reduced by £25
million following the renewal of a number of contracts on improved terms, which
more than offset the increased number of subscribers. Other programming costs,
including Movies, News and Entertainment increased by £16 million due to the
continued investment in Sky One commissioned programming and five news
production costs, partially offset by savings in Movie costs.
Gross margin(1) increased by a further four percentage points to 61% as a result
of 9% growth in revenues against broadly flat programming costs.
Marketing costs for the period were £474 million, an increase of £85 million on
the comparable period. Marketing costs to new customers grew by £43 million.
This reflects an 7% increase in the level of gross additions during the period,
and a higher proportion of new customers taking Sky+ and Multiroom. The number
of existing customers upgrading to Sky+ and Multiroom increased by more than 40%
on last year, which carried an increased investment of £16 million. The
remaining marketing expenditure, which includes above the line, retention, other
marketing and the inclusion of Easynet marketing expenditure, increased by £26
million.
Other operating expenses, including subscriber management, transmission and
administration costs increased by £97 million on the comparable period,
including operating expenses of £47 million from the first time consolidation of
Easynet and £26 million of additional depreciation, mainly relating to the first
six months of depreciation since the first phase of the implementation of the
new customer management systems in September 2006. Excluding these items, other
operating expenses grew by 4% reflecting additional investment made to expand
the Group's customer management operation, to further improve customer service
levels and manage the increase in sales activity.
Operating profit increased by 15% to £660 million generating an operating profit
margin of 21%.
After the Group's share of operating profit from joint ventures of £9 million
and a net interest payable charge of £60 million, the Group made a profit before
tax in the period of £609 million, up from £546 million for the comparable
period.
The total tax charge for the period was £184 million, comprising a current tax
charge of £148 million and a deferred tax charge of £36 million. The Group's
underlying effective tax rate, which excludes the effect of joint ventures,
decreased from 30.6% to 30.3%.
The mainstream corporation tax liability for the period was £148 million and, in
accordance with the quarterly instalment regime, £43 million was paid in April
2006.
The Group's profit for the period was £425 million, an increase of 10% on the
comparable period which generated basic earnings per share of 23.2 pence, up
from 20.0 pence.
Earnings before interest, tax, depreciation and amortisation ('EBITDA')
increased by 18% on the comparable period to £756 million. After a working
capital outflow of £60 million, relating to the phasing of sports rights and Sky
One programming payments, the Group generated a cash inflow from operations of
£696 million. After taking into account cash outflows, principally comprising
taxation, net interest payable and capital expenditure, the Group generated £370
million of free cashflow. After shareholder returns of £405 million; comprising
£92 million through the ordinary dividend and £313 million through the share
buy-back; the net cash outflow for the purchase of the Easynet Group of £204
million and other items(2); the Group's net debt position increased by £279
million during the period to £667 million.
(1) Defined as revenue less programming expenses as a proportion of revenue
(2) Includes share option exercise proceeds, the revaluation of long-term
borrowings and borrowing-related financial derivatives
CORPORATE
During the quarter, the Group repurchased for cancellation 13.8 million shares
for a total consideration of £73 million, including stamp duty and commissions.
As at 31 March 2006, the total number of shares outstanding was 1,808,617,599.
On 28 April 2006, the FA Premier League announced that following the submission
of bids by interested parties, Sky had been awarded three out of the six
packages of live television rights. A second round of bidding will be held for
the remaining three packages. Sky is bound by confidentiality relating to the
bidding process and intends to make no further comments until the conclusion of
the process.
CORPORATE RESPONSIBILITY
During the quarter, the Group continued to design and implement a range of
corporate responsibility initiatives. The Group focuses on responsible use of
its products and services, accessibility for viewers with special needs, and
making a unique contribution to communities in the areas of youth, education,
sport and the environment. In the quarter, the Group undertook comprehensive
internal and external consultation on social and environmental issues. Energy
consumption and climate change are growing in profile and importance amongst UK
politicians, opinion-formers and Sky's customer base. Sky is the first media
company to participate in the Carbon Disclosure Project. Sky has reduced its
site-based CO2 emissions by 47% and halved the power consumption of
set-top-boxes since launch. The Group is using 100% renewable energy in England
and Wales and combined heat and power in Scotland. All energy will be bought
from renewable sources by October 2006. Sky joined the Climate Group in March
2006 and announced its intention to be the world's first major media company to
become carbon neutral. Sky is the only broadcasting company in the Global 100:
Most Sustainable Companies in the world. It is also included in the Dow Jones
Sustainability Index and FTSE4 Good.
Use of measures not defined under IFRS
This press release contains certain information on the Group's financial
position, operating results and cash flows that have been derived from measures
calculated in accordance with IFRS. This information should not be read in
isolation of the related IFRS measures.
Forward-looking statements
This document contains certain forward-looking statements within the meaning of
the United States Private Securities Litigation Reform Act of 1995 with respect
to the Group's financial condition, results of operations and business, and
management's strategy, plans and objectives for the Group. These statements
include, without limitation, those that express forecasts, expectations and
projections with regard to the potential for growth of free-to-air and pay-TV,
advertising growth, DTH subscriber growth and Multiroom and Sky+ penetration,
DTH revenue, profitability and margin growth, cash flow generation, subscriber
acquisition costs and marketing expenditure, capital expenditure programmes and
proposals for returning capital to shareholders.
These statements (and all other forward-looking statements contained in this
document) are not guarantees of future performance and are subject to risks,
uncertainties and other factors, some of which are beyond the Group's control,
are difficult to predict and could cause actual results to differ materially
from those expressed or implied or forecast in the forward-looking
statements. These factors include, but are not limited to, the fact that the
Group operates in a highly competitive environment, the effects of government
regulation upon the Group's activities, its reliance on technology, which is
subject to risk, change and development, its ability to continue to obtain
exclusive rights to movies, sports events and other programming content, risks
inherent in the implementation of large-scale capital expenditure projects, the
Group's ability to continue to communicate and market its services effectively,
and the risks associated with the Group's operation of digital television
transmission in the UK and Ireland.
Information on some risks and uncertainties are described in the 'Risk Factors'
section of Sky's Interim Report on form 6-K for the period ended 31 December
2005. Copies of the Interim Report on form 6-K are available on request
from British Sky Broadcasting Group plc, Grant Way, Isleworth TW7 5QD or from
the British Sky Broadcasting web page at www.sky.com/corporate. All
forward-looking statements in this document are based on information known to
the Group on the date hereof. The Group undertakes no obligation publicly to
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
Appendix 1
Subscribers to Sky Channels
Prior year Q3 Prior quarter Q3 2005/06
as at as at as at
31/03/05 31/12/05 31/03/06
DTH homes(1)(2)(3) 7,704,000 8,059,000 8,099,000
Total TV homes in the UK and
Ireland(4) 26,273,000 26,585,000 26,634,000
DTH homes as a percentage of
total UK and Ireland TV
homes 29% 30% 30%
Cable - UK 3,277,000 3,292,000 3,298,000
Cable - Ireland 584,000 597,000 602,000
Total Sky pay homes 11,565,000 11,948,000 11,999,000
Total Sky pay homes as a
percentage of total UK and
Ireland TV homes 44% 45% 45%
Sky+ homes 770,000 1,281,000 1,430,000
Multiroom homes(5) 563,000 906,000 990,000
DTT - UK(6) 4,674,000 6,363,000 6,875,000
1: Includes DTH subscribers in Republic of Ireland. (407,000, as at 31 March
2006, 355,000 as at 31 March 2005.)
2: DTH subscribers includes only primary subscriptions to Sky (no additional
units are counted for Sky+ or Multiroom subscriptions). This does not include
customers taking Sky's freesat offering or churned customers viewing
free-to-air channels.
3: DTH homes include subscribers taking Sky packages via DSL through Kingston
Interactive Television and Homechoice.
4: Total UK homes estimated by BARB and taken from the beginning of the month
following the period end (latest figures as at 1 April 2006). Total Ireland
homes estimated by Nielsen Media Research, conducted on an annual basis in
July with results available in September (latest figures as at July 2005).
5: Multiroom includes households subscribing to more than one digibox. (No
additional units are counted for the second or any subsequent Multiroom
subscriptions.)
6: DTT homes estimated by BARB and taken from the beginning of the following
month (latest figures as at 1 April 2006). These include Sky or Cable homes
that already take multi-channel TV.
That should earn me plenty of points  |
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