Rupert Murdoch facing a price hike in his move for BSkyB

Rupert Murdoch's News Corporation today faced the prospect of having to increase its £7-a-share offer for BSkyB after the pay-TV giant unveiled a bumper set of annual results.

Sky, which is already 39% owned by News Corp, said adjusted operating profits jumped 10% to £855 million in the year to June 30.

Pre-tax profits more than doubled to £1.17 billion, thanks in part to some favourable exceptional items, as Britons continue to splash out on pay-TV and broadband.

Murdoch wants to buy the remaining 61% of BSkyB. Sky's shares were trading down 5p at 715p.

Patrick Yau, analyst at Peel Hunt, has a target price of 750p for the shares, saying: "We believe that the offer price may be raised."

Lorna Tilbian, analyst at Numis Securities, said Murdoch will need to pay around 800p, at which price the company would be valued at £13 billion.

Some smaller shareholders, such as hedge-fund boss, Crispin Odey have called for 900p. News Corp declined to comment on whether it will increase its proposed offer, first made six weeks ago to the Sky board, which called for at least 800p.

The Murdoch company has previously said it will be "very disciplined" about the cash deal, having raised its initial offer from 675p. Murdoch's son, James, is chairman of BSkyB as well as News Corp's European chief executive.

Sky chief executive Jeremy Darroch hailed "a really strong set of results" as revenues rose 11% to £5.91 billion.

He increased average revenue per user by 9%, or £44, to £508 a year by persuading new and existing customers to take more products. Sky sold a record 958,000 products such as broadband, telephone and more expensive high-definition TV.

Sky has 9.86 million subscribers. These include 2.94 million who take Sky+ HD, 2.6 million who have broadband and 2.3 million with a telephone. It has been advertising heavily, spending a remarkable £1.12 billion on marketing, including the cost of subsidising installation for new customers.

Darroch said: "The economic outlook is tough and continues to be difficult.

"The good news is that the trends of spending a bit more on time at home are continuing." Sky added only a net 90,000 new customers in the past three months, down from 124,000 in the same quarter a year ago.

Darroch attributed this fall to last year's performance being unusually good.