SKY Sky

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)

Sky (LSE:SKY)
Historical Stock Chart
From Apr 2024 to May 2024

Sky (LSE:SKY)
Historical Stock Chart
From May 2023 to May 2024