BSkyB homes in on ITV collapse
THE £1bn-plus collapse of ITV Digital helped its archrival British Sky Broadcasting, the digital broadcaster 36% owned by Rupert Murdoch's News Corporation, push its direct subscriber base over sixm in the year that ended last month.
With 6.1m direct-to-home subscribers BSkyB, headed by chief executive Tony Ball, is now in more than a quarter of Britain's homes. The 214,000 new subscribers BSkyB added in the past three months more than outweighed those it lost through the demise of ITV Digital, leaving it with a net gain of 148,000 for the final quarter of its financial year.
This takes its total direct-to-home audience to 6.1m. When cable and other subscribers are added in, the total for the UK and Ireland is 10.1m.
Ball said: 'With 6.1m subscribers and 11% growth in revenue per subscriber to £347 a year, we are on track to meet our targets of 7m subscribers and £400 Arpu (average revenue per user). This has generated strong operating profit growth and positive free cashflow.'
Earnings before interest, tax, depreciation and amortisation rose more strongly than most of the City had forecast, by 22% to £273m. Revenues rose by 20% to £2.77bn with faster growth in the direct-to-home and interactive areas. Direct-to-home revenues account for 69% of the total and rose by 26% to £1.93bn.
Debt, which peaked at £1.83bn in December 2001, has fallen by £305m to £1.53bn. Pre-tax losses more than doubled from £514m to £1.28bn with the loss per share, after goodwill and exceptional items, catapulting from 29.2p to 73.3p.
BSkyB had to make a £22m provision against operating costs for money owed to it by ITV Digital. It said it was seeking to maximise the recovery of funds from ITV Digital through its membership of the creditors' committee.
As it has already pointed out, Sky has taken a complete £971m charge on the value of its investment in the German media group KirchPayTV, which went bust in May.
Sky said that it had held its churn rate at 10.5%, which pleased analysts particularly since the group has managed to push through price increases averaging 7% over each of the past two years.
Ball said the churn rate was gradually reducing and he was pleased that three-quarters of direct-to-home subscribers were through the initial 12-month contract period and few had switched off.
