Sky Shares Advance as Sales, Customer Numbers Rise -- Update
July 28 2016 - 5:51AM
Dow Jones News
By Simon Zekaria
LONDON--Sky PLC (SKYAY) shares climbed Thursday as Europe's
biggest pay-TV company reported increased yearly revenue as it
attracted more customers.
Revenue for the fiscal year ended June 30 rose 7% to 12 billion
pounds ($15.76 billion), versus expectations of 11.8 billion
pounds. Sky added 808,000 customers in the year and sold an
additional 3.3 million products. Sky sees revenue growing 5% to 7%
in fiscal 2017.
The British company's net profit declined to 666 million pounds
from 1.96 billion pounds on costs from its multibillion-dollar
expansion in Germany, Austria and Italy.
Across its widened market, the company is spending more on
programs, product development and marketing to tap consumer demand
for bundles of connected digital services. One of its key expenses
is television rights for Premier League soccer, which amounts to
600 million pounds more this year.
Sky's shares rose 6% in early trading in London. Broker Shore
Capital said the group has "momentum."
The London-headquartered company--Europe's biggest pay-TV group
by customer numbers--also accelerated the savings program of its
expansion and said it will have a "strong focus" on costs this
year, even as it declined to put on a figure on that.
Operating profit before exceptional items--a key metric of
business performance--rose 12% year over year to 1.56 billion
pounds, compared with consensus market expectations of 1.57 billion
pounds, lifted by trading in the U.K., Ireland and Germany.
Revenue for Germany and Austria combined climbed 12%, while U.K.
and Ireland revenue increased 7%, and Italy rose 2%.
"This is a growth story," said Chief Executive Jeremy Darroch.
The group recommended a full-year dividend of 33.5 pence a share,
up 2%.
Mr. Darroch said the U.K.'s vote to leave the European Union
doesn't change the group's investment strategy.
And while the vote raises fears the U.K. will enter a period of
economic weakness amid consumer uncertainty as the country
negotiates exit terms, Mr. Darroch said Sky tends to do well in
leaner times as customers stay at home for socializing and
entertainment.
Sky is 39%-owned by 21st Century Fox, which until June 2013 was
part of the same company as The Wall Street Journal parent News
Corp.
Write to Simon Zekaria at simon.zekaria@wsj.com
(END) Dow Jones Newswires
July 28, 2016 05:36 ET (09:36 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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