In BSkyB's first update since being defeated in the Champions League rights auction in November, the broadcaster has announced strong growth in on-demand and HD TV services which beat City forecasts.
In the six months to the end of December, BSkyB said that adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) were flat at £813m, compared to the same period a year earlier.
Operating profit was down 8% on the year before at £595m, as investment in new services and costs in its Premier League battle with BT took its toll, but that was still better than analysts had predicted.
Total net product growth across the company's TV, telephone and broadband grew by 873,000 during the second quarter - 100,000 more than analysts had predicted. In the last 12 months, BSkyB added 3.8 million paid-for subscription products, the fastest rate of annual growth in three years, the company said.
The company now has High Definition and Broadband services in more than five million homes and 11.3 million retail customers in total, up by a fifth on the year before.
BSkyB also announced an expanded partnership with US cable channel HBO. The two companies 'will work together to co-produce major new cinematic drama series while Sky Atlantic remains the exclusive home of HBO programmes until 2020,' BSkyB said. In the five-year deal, BSkyB will have exclusive rights to programmes such as Game of Thrones and Girls.
'Our financial performance was strong in the first half and we remain on track for the full year. We are moving through a year of investment in which we are absorbing the one-off step up in Premier League costs well,' CEO Jeremy Darroch said.
BSkyB has had a tricky year battling with BT over the rights to Premiership football. In August, BT launched its first television channel, BT Sport, which promised to give free sports including some Premiership football to those who sign up for its Infinity broadband offer. But in November BT went a step further and won the rights for the Champions League in a £900 million three-year deal. The figure was more than double the £400m BSkyB and ITV were paying for the current three-year contract, and was the first time BSkyB has been outbid in the football stakes.
For BSkyB, which has built its business around broadcasting sports and movies to around 10 million homes, BT’s victory has meant a change of direction for the business, and it is now investing more in high-end and original drama.
BSkyB shares rose 2% when markets opened Thursday morning.
BT will announce third quarter earnings on Friday.