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Sky’s nine-month operating profit up 12% to £1.1 bn

MUMBAI: UK pay TV service provider Sky has posted a five per cent increase in group revenue to £8.715 billion for the nine-month period. There was a 12 per cent increase in operating profit to £1.143 billion for the period ended 31 March 2016.

The focus was on securing more content from around the world; pan-European movie deal with Sony; and new sports deals including Formula 1 and Uefa Euro 2016. On the innovation front, Sky Q and Sky Kids app launched in the UK

Sky added 177,000 new customers in the third quarter.

Sky CEO Jeremy Darroch commented, “It’s been another strong quarter for Sky. Our strategy to broaden our business, expanding into new markets and customer segments, has delivered further excellent financial results with revenue up 5 per cent and a double digit growth in profit.

“We want to offer customers the very best TV experience, whenever and however they want to watch. With the launch of Sky Q in February, we now have three outstanding products to meet all our customers’ needs. We are pleased with the early response to Sky Q, as we focus on establishing this premium product in its first market. Our approach to the connected home continues to engage customers; almost 11 million Sky households have now connected to enjoy our on demand services including Sky Box Sets, which recently launched in both Germany and Italy.

“Our content offering is getting bigger and better. With Sky originals, we are creating unique and high-quality shows such as Stan Lee’s ‘Lucky Man’, which drew record audiences. We have many more exciting original productions to look forward to with our first production in Germany, ‘Babylon Berlin’, shortly to begin filming and we have just announced our most ambitious production slate in the UK, featuring world class talent such as Idris Elba, Tim Roth and Christina Hendricks in six major new shows. Strengthening our movies offer, we secured our first group-wide movie deal with Sony this quarter, and for families we launched our new Sky Kids App, which will be rolled out in all territories. In sport, we are excited to become the exclusive home of Formula 1 in the UK and Ireland from 2019 whilst we will be showing UEFA Euro 2016 this summer in Italy.

“Our promise of world class content, commitment to innovation and brilliant service is persuading more customers to join and stay with Sky, in every market. As we pass the major milestone of 40 million products in UK and Irish households, we will continue to execute this successful approach across the group.”

Sky said it is expanding into new markets, opening up new customer segments and developing more products and services.

“This strategy is delivering an excellent performance which has been sustained over time, as we continue to grow our customer base, revenues and profits. Alongside attracting more new customers to Sky, our existing customers continue to take more services from us across all markets.

“At the heart of our plans is building Europe’s leading entertainment business. This means that across all our markets we are ensuring Sky is the home of more of the best content from around the world, with sustained market-leading innovation across multiple platforms, delivered by a trusted brand that offers best in class customer service. Through this – and the fact that we operate in attractive markets with excellent headroom – we are driving sustained broad revenue growth which, combined with our focus on operating efficiency, leads to a stronger, more profitable business and increased returns for shareholders.

“We have made excellent progress against these plans this quarter, resulting in strong customer and product growth, revenues up five per cent and a double digit increase in profits. This continues the strong and sustained financial performance which has seen us deliver revenue growth of around five per cent in each of the last five years together with a cumulative increase in profit in excess of 50 per cent. The integration of the three Skys is on track, already delivering tangible benefits, and is enabling us to pursue significant growth opportunities across the group,” said Darroch.

The company said that it had a good trading quarter across all markets. “In total, we added 177,000 new customers, taking our total customer base to 21.7 million, and grew total products by 686,000. Group revenues for the period increased by 5% to £8,715 million, leading to a 12% increase in operating profit to £1,143 million,” Darroch added.

The company said that it continues to make good progress on the key areas of integration – platform leadership; content acquisition; a single brand; and efficient operations.