BSkyB looks even tastier as profits jump 26%

BSkyB has topped the 10m customer mark and boosted half-year profits to £520m. No wonder Murdoch wants it.

by James Taylor
Last Updated: 19 Aug 2013
After all the bad publicity surrounding its, well, unreconstructed sports presenters, BSkyB is back in the headlines for all the right reasons this morning: its profits soared by 26% to £520m in the six months to December, as its total customer base officially went into eight figures - 10.09m, to be precise. In particular, its HD and broadband services are proving increasingly popular. So, a pretty impressive set of numbers, and not just in its core satellite subscription business (despite all the usual caveats about 2011 uncertainty). You can see why News Corp is so keen to get its hands on the 61% of Sky it doesn't already own...

The shadow of that News Corp bid looms large over everything Sky does at the moment. And the latter raised a few eyebrows this morning by admitting that it had already spent £7m on advisors in its negotiations with News Corp - which just goes to show that dealing with unsolicited bids is an expensive and time-consuming nightmare (unless, of course, you're one of the blood-sucking bankers getting rich on the proceeds). However, the good news is that if regulators block the deal, News Corp has apparently promised to reimburse up to £20m in costs.

Despite this distraction, however, the core business seems to be in pretty good shape. Revenues were up 15% to £3.19bn, as Sky added 140,000 net brand new customers in the final quarter of the year; there were also a 204,000 jump in its broadband customer base, and a whopping 343,000 new takers of its HD service. As these numbers suggest, Sky is also increasing the amount of money it's making per user - a keenly-watched metric - to £541, as customers sign up for more and more of its products.

All of which is good news for shareholders - and not just because CEO Jeremy Darroch has hiked the dividend by 11%. Today's results will presumably strengthen BSkyB's hand further in the negotiations with News Corp. So if the politicians and regulators do end up waving the deal through - and that may require some concessions on the independence of Sky News, by the sounds of it - that should mean a few extra quid for Sky shareholders...

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