TIDMSKY
RNS Number : 4675F
Sky PLC
28 July 2016
Results for the twelve months ended 30 June 2016
EXCELLENT PERFORMANCE ACROSS THE SKY GROUP
Strong group results
-- 7% increase in revenue to GBP11,965 million with adjusted
operating profit up 12% to GBP1,558 million
-- 13% increase in adjusted EPS to 63.1p; twelfth consecutive year of dividend growth to 33.5p
-- 808,000 new customers and 3.3 million new products sold across year; products pass 57 million
-- Statutory results: 20% increase in revenue; operating profit
up 1% to GBP977 million; EPS of 39.0p
International strategy ahead of plan
-- Sustained strong performance in the UK and Ireland; revenue passes GBP8 billion
-- Enhanced customer proposition in Germany and Austria driving
first ever full year operating profit
-- Offering the best TV across a choice of platforms delivers a
return to customer growth in Italy
-- Current synergy target of GBP200 million by 2017 on track; extending to GBP400 million by 2020
Exciting plans for 2016/17 and beyond
-- Sky 1 to launch in Germany with exclusive series of world-leading cookery show MasterChef
-- Expanding our European streaming services; launch of Sky
Ticket in Germany, NOW TV in Italy and the NOW TV Combo in UK - the
UK's first ever contract free triple play bundle
-- Launch of Ultra HD services in UK and Germany
-- Sky Kids app to launch across Europe following success in UK and Ireland
-- Launch of Sky Virtual Reality app cements our leadership in innovative, immersive content
Jeremy Darroch, Group Chief Executive, commented:
"With revenue up 7% and profits up 12%, it's been another
excellent year for Sky. We have broadened our business and expanded
into new consumer segments, applying our proven strategy across the
group.
"The group is leveraging the many opportunities of scale;
sharing resources, insights, expertise and innovation. We are
investing in a broad range of world class entertainment in every
market, distributed across an unrivalled choice of market-leading
platforms and supported by excellent service, because these are the
things that really matter to customers.
"Each of our markets is making very strong progress. In the UK
and Ireland we passed GBP8 billion in revenue for the first time by
giving consumers more and more reasons to choose Sky including our
new premium service, Sky Q. In Germany and Austria, we have
broadened our TV offering to attract more customers. Today we are
announcing the launch of Sky 1 which combines with our new Sky Arts
channel, Sky Atlantic and increased on demand content to create a
compelling entertainment portfolio. We have also ensured that Sky
remains the undisputed home of the Bundesliga until 2021. Our
business in Italy is outperforming a competitive market, delivering
programmes which capture the public's imagination such as Gomorrah,
X Factor and Moto GP across a growing choice of platforms. This
approach is working, with the Italian customer base returning to
growth for the first time in five years.
"Our focus on operating efficiently and effectively in all our
markets has enabled us to further reduce our costs as a percentage
of sales, providing more fuel to grow profits and to invest where
it counts - on screen and in our products and services.
"Our deep insights into the needs of customers, along with our
investments in brilliant programmes and technology, strong
relationships with our partners and, above all, our desire to
embrace change means that we continue to better serve our
customers, and grow our business. Our ambition is to be the best
customer-led entertainment and communications company in the world,
delivering long term benefits for all our shareholders."
Results highlights
Foreign
12 months 12 months exchange 12 months
(GBPm) to 30-Jun-16 to 30-Jun-15 Growth impact to 30-Jun-15
---------------- -------------- -------------- ------- ---------- --------------
Adjusted Actual
Results Constant exchange
currency rates
Revenue 11,965 11,221 +7% 62 11,283
UK and Ireland 8,371 7,820 +7% - 7,820
Germany and
Austria 1,512 1,352 +12% 25 1,377
Italy 2,082 2,049 +2% 37 2,086
Revenue
(excl. week
53 impact) 11,791 11,221 +5% n/a n/a
Operating
Profit 1,558 1,397 +12% 3 1,400
UK and Ireland 1,504 1,350 +11% - 1,350
Germany and
Austria 4 (11) - - (11)
Italy 50 58 -14% 3 61
Statutory Actual
Results exchange
rates
Revenue 11,965 9,989 +20%
Operating
profit 977 972 +1%
Dividend
per share
(p) 33.5 32.8 +2%
Earnings per share
(basic)
Adjusted
(p) 63.1 56.0 +13%
Statutory*
(p) 39.0 79.1 -51%
* 2014/15 statutory earnings per share are from continuing
operations and include the profit of GBP791 million on the sale of
our shareholdings in ITV and Nat Geo.
Unless otherwise stated, all numbers are presented on an
adjusted basis for the full year ended 30 June 2016. For
comparative amounts in the prior year, numbers are presented on an
adjusted like for like basis (i.e. including a full twelve months
of Italy and Germany) and are translated at a constant currency
rate of EUR1.34:GBP1. The current year results include 53 weeks of
trading compared with 52 weeks in the prior year.
Adjusted results exclude items which may distort comparability
in order to provide a measure of underlying performance. Such items
arise from events or transactions that fall within the ordinary
activities of the Group but which management believes should be
separately identified to help explain underlying performance.
WELL ESTABLISHED STRATEGY DRIVING PERFORMANCE
Across the year we have made significant progress against our
strategy to broaden our business; expanding into new markets,
opening up new customer segments and developing more products and
services. In each of our geographies we are ensuring Sky is the
home of more of the best content from around the world, delivered
with market-leading innovation across multiple platforms by a
trusted brand, offering best in class customer service.
This approach, first established and successful in the UK,
enables us to drive broad-based sustained revenue growth which -
underpinned by investment in our customer offer and sustained
operating efficiency - has led to a stronger and more profitable
business and increased returns for shareholders. This proven
strategy has delivered an average annual organic revenue growth of
7% with double digit growth in EPS in the UK and Ireland since
2007/08. We have grown our revenues, profits and returns strongly
over the last 12 months and we enter 2016/17 on track in every
territory.
Strong plans for 2016/17
Looking to 2016/17 we will continue to execute our strategy by
capturing our expanded opportunities for growth with a strong set
of plans in each market, underpinned by a continued focus on cost.
We aim to grow our revenues at a similar annual run rate of between
5% and 7% as in recent years and this, combined with a particularly
strong focus on cost efficiency, will allow us to substantially
absorb the impact on profits and earnings of the approximately
GBP600 million one-off step up in the UK Premier League rights
cost.
UK and Ireland
In the UK and Ireland we have three clear priorities. The first
is to maximise the returns on the significant product and content
investments we have already made over the last twelve months; from
Sky Q and NOW TV to our new channels and services - Sky Sports Mix,
the Sky Kids app and Sky Cinema. Our second priority is to deliver
strong revenue growth as we extend our transactional and
advertising businesses. Our third priority is to successfully
launch our brand into the mobile market in the UK, opening up a
significant new source of revenue and profits. Alongside these
priorities we will execute our comprehensive plans to step-change
our cost management, effectively offsetting most of the increase in
Premier League costs this year.
Germany and Austria
We have clear priorities as we pursue the significant
opportunity in Germany and Austria, Europe's largest TV market. We
will continue to take a balanced approach to our growth in Germany,
increasing our short term profitability whilst ensuring we don't
underinvest in future opportunities in this attractive market.
Our first priority is to grow and broaden the business in
2016/17 by developing entertainment for the whole household
including launching our Sky 1 and Sky Cinema Family channels this
autumn. Our second priority is to broaden our range of products and
services, and introduce our new set top box, Sky+ Pro, which will
be UHD ready, with built in WiFi and a 1TB hard drive. Our third
priority is to innovate further to offer more value and choice for
customers, including the launch our new streaming service Sky
Ticket. Finally, we will continue to build additional revenues
streams, developing our advertising business and extending our
reach as we take Sky Sports News HD free-to-air, before launching
our transactional service Sky Store in summer 2017.
Italy
In Italy we have three strategic priorities: to provide the very
best TV experience; to offer our services on a choice of platforms;
and to drive broad revenue growth across subscription and
additional revenue streams. In 2016/17 we will progress this
further, delivering new shows including The Young Pope and 1993;
innovations including Sky Go Extra, the Sky Kids App and improving
the MySky proposition with our next generation box with HD on
demand content. We launched our service with new pricing under the
NOW TV brand in June, and this year will expand into more devices
in the first quarter. We will complete our line-up of products and
services with the launch of Sky Q later in 2017. Finally, we will
continue to broaden our business; growing advertising revenues
across our pay and free to air channels; introducing Sky AdSmart
and further growing viewing to Tv8, the fastest growing free to air
channel in Italy.
Cost efficiency
Sustained operating cost improvement is a core pillar of our
growth strategy. In 2016/17 we will deliver our biggest year ever
in terms of cost efficiency, aiming to reduce operating costs as a
percentage of sales by between 2% and 3%, equivalent to over GBP300
million on a run rate basis.
2016/17 is the year to which our original run rate synergy
target of GBP200 million applied, and today we confirm that we are
on track to exceed this. Our focus now is to further extend those
savings, targeting GBP400 million of run rate synergies by the end
of 2020 from a combination of the increasing scale of existing
programmes as the business grows along with new initiatives such as
the deeper integration of certain functions, and the establishment
of a Group Performance Team which will benchmark and deploy best
practice across the markets.
Each market has its own efficiency programmes, well established
in the case of Italy and the UK, and for the first time in Germany
this year. Examples of in-market efficiencies that we will make in
2016/17 include:
-- Reducing inbound customer calls through digital 'e-care'
-- Combining sports and news production in the UK
-- Relocating the UK advertising sales team from central London to our Osterley campus
-- Launch of a brand new Sky customer service app in the UK
-- Further reduction in our standard definition set top box population
-- Revisiting allocation of our advertising budget to optimise rates and response
-- Removing some of the legacy 'plc' overhead in Sky Germany
Measuring our success
As an enlarged group operating across territories at different
stages of development, and across markets and segments with
different structures, we measure our success by how the group comes
together to deliver consistent long-term growth. Moving forward, we
will measure ourselves on medium term growth in revenue and
operating profit as the most relevant indicators of success against
our broader growth strategy, capturing our transactional and
adjacent businesses as well as our core TV subscription
revenues.
SUMMARY OF GROUP OPERATIONAL AND FINANCIAL PERFORMANCE
Group revenues for the year increased 7% to GBP11,965 million
(5% on a 52 week basis). With a good performance on costs, this
translated into operating profit of GBP1,558 million, up 12% year
on year. As a result the Board has proposed a full year dividend of
33.5 pence, delivering the twelfth consecutive year of dividend
growth.
Our financial performance was driven by growing customer demand
across the group. In total we added 808,000 customers, including
160,000 in Q4, taking our total customer base to 21.8 million. At
the same time we increased products by 3.3 million, with 503,000
sold in Q4 alone.
UK and Ireland
It has been an outstanding year of product innovation for Sky in
the UK and Ireland. From the launch of Sky Q to the ground-breaking
NOW TV Combo - the UK's first contract free triple play bundle -
our product portfolio continues to evolve to meet the diverse needs
of our different customer segments. We launched an innovative Sky
Kids App as an important addition to the service we offer families,
while the launch of Sky Cinema is our latest step in providing
customers with world leading content whenever and however they
choose to watch. Sky Cinema will offer a new movie premiere every
single day of the week and our biggest ever library of blockbuster
and classic movies is available on demand.
Our transactional services are gaining real scale. We are now
regularly the number 1 digital retailer for top movies titles, with
over 3 million customers using Sky Store during the past 12 months.
From today customers will be able to purchase complete series of
box sets from Sky Store Buy & Keep, expanding this hugely
popular service which has seen usage grow by over 80% year on
year.
Alongside these important steps in developing our products and
services, we have continued to deliver a strong financial and
operational performance. Revenue was up 7% to exceed GBP8 billion
for the first time, with operating profit up 11% to GBP1,504
million.
We added 445,000 new customers across the year, including 93,000
in Q4. Total product growth was 2.3 million across the 12 months
with 31,000 new TV products in Q4. In addition, we added a further
24,000 new broadband products in the quarter, taking our total
broadband growth to 347,000 across the year. Within our base we now
have more than 1 million broadband-only customers, who have a
higher propensity to switch providers, in line with the industry
norm. In addition, we continued to limit retention discounts, and
we also communicated to customers a TV price rise in the order of
4-5%, which took effect from June. Together these factors
contributed to an 11.2% churn rate in the UK and Ireland.
Germany and Austria
We have made significant progress this year in Germany and
Austria, where our focus has been on swiftly rolling out our proven
strategy from the UK and broadening the offer from principally
sports and movies to a full entertainment proposition. We have
added to our content and channels as well as the structure of our
customer offer, delivering a full year operating profit for the
first time in Sky Deutschland's history.
Today we are pleased to announce the launch of our flagship
entertainment channel, Sky 1. Launching in November, Sky 1 will
join Sky Atlantic HD and Sky Arts HD - which went live earlier in
the month - to form a compelling entertainment offer in the market.
Sky 1 will feature a brand new series of the world-leading cookery
show, MasterChef, due to begin production in August. The channel
will also show popular family entertainment shows such as Desperate
Housewives, The Tunnel: Sabotage and Grey's Anatomy.
This expansion of our channels and programmes builds on the
success of our new Entertainment pack, which 50% of our new
customers have selected on joining. The pack brings together our
refreshed entertainment offer with services including our new Sky
Kids app, which launched earlier this month, and our expanded on
demand library. Over 1 million Sky homes have now chosen to connect
their boxes to the internet to access our on demand service and
this is enabling us to appeal to a new customer segment; on demand
users are typically younger than our average customer in Germany
and are attracted by the new level of flexibility that the service
provides.
We are also launching Sky Ticket, rebranding our current Sky
Online proposition and offering customers a flexible streaming
service that builds on the expertise we have developed through NOW
TV in the UK and Italy. Sky Ticket will enable us to tap further
into the pay lite segment in Germany and Austria, with an enhanced
customer offer that includes, for the first time, Sky Sport day,
week and month passes.
We continue to extend our leadership in sport and movies,
ensuring that Sky remains the home of the Bundesliga until 2021. We
announced earlier this month that we will launch Sky Sport News HD
as a free to air channel, helping us build our brand and extend our
reach. And in movies we have added to our Sky Cinema portfolio with
Sky Cinema Family HD and will continue with our pop up channels
which have been very popular with customers.
This strategy to broaden our offer to appeal to more customers
is working. Over the past 12 months we delivered revenue growth of
12% and recorded our first full year operating profit of GBP4
million. Total customer growth was 346,000, including 59,000 new
customers in Q4. At the same time, total products exceeded 8
million for the first time, with 909,000 products added in the
year. 12-month rolling churn remained stable at 9.9%.
Italy
In Italy customers are attracted by the breadth of our shows
across a choice of market-leading platforms. The second series of
the gripping crime drama, Gomorrah, attracted an average audience
of over 2 million, becoming our most viewed TV series ever. In
June, average viewers to Sky Sports reached an all-time high, with
over 2 million customers tuning in to watch each Euro 2016 match
featuring the Italian football team and over 3 million watching the
quarter final versus Germany on the Sky platform - the most viewed
event on Sky Sports Italy in the past thirteen years.
Awareness and use of Sky Box Sets continues to increase
following the launch in March, with over 20 million downloads to
date. In total, on demand downloads reached over 200 million across
the year, with almost 2.2m customers now connected.
This approach has delivered an increase in revenues, up 2% to
GBP2.1 billion for the full year and up 6% in Q4 alone, excluding
the impact of the 53(rd) week. As communicated last quarter, our
investments in connected boxes and establishing Sky Box Sets with
increased marketing have resulted in an GBP8 million decline in
operating profit to GBP50 million. Our customer base returned to
growth for the first time in five years, with total customers up
17,000 over the 12 months - an outstanding achievement in a year of
economic headwinds in the market. We added 26,000 total products in
the year, including 12,000 in Q4. 12 month rolling churn was
11.1%.
Content
We have had an excellent year on screen. Our strategy of
acquiring the best programmes from around the world, complemented
with more of our own original content, is delivering the shows
customers really want. This quarter we delivered more hit Sky
original programming including returns of The Tunnel and Gommorah.
In 2016/17, customers can look forward to even more world-class
original drama including The Young Pope, Guerrilla and the return
of Fortitude. Our partnerships with the major studios are bringing
customers the best content from around the world. The sixth series
of HBO's Game of Thrones aired in every market, with each episode
reaching over 6 million viewers, while Showtime's Billions broke on
demand records with almost 11 million views on demand
platforms.
In sport, the thrilling end to the Premier League title race
drove quarterly audiences up 7% year on year in the UK and Ireland
while Bundesliga viewing grew 9%, supported by increased viewing on
Sky Go. Motorsports in Italy had a great start to the season, with
the highest Sky Sports share, and viewing to MotoGP and Formula 1
up 19% and 12% respectively. To see a selection of the great
programmes coming up on Sky over the next six months please visit
www.sky.com/corporate
Innovation
2016 has been a remarkable year for product innovation. We
launched our premium Sky Q product and further developed our
streaming services to target the pay lite sector. In the UK and
Ireland, NOW TV sports transactions were up 37% year on year,
reaching over 600,000 in Q4. We added a new NOW TV Kids pass and
last month we launched the NOW TV Combo, the UK's very first
contract-free triple play bundle, and our new NOW TV box offering
seamless access to 60 free-to-air channels and the best of pay
TV.
Across the group we are rolling out our successful connected
homes strategy, and this year almost 2 million homes connected,
bringing our connected base to 11 million. Views across our
connected platforms grew by 42% to over 3.6 billion.
Customers can expect more exciting innovations from Sky. Sky Q
will offer the widest range of ultra HD content across sport,
movies and drama and we'll show the Bundesliga in ultra HD this
season. This year we established Sky VR Studios, bringing our
expertise in storytelling and unrivalled access to major cultural
and sporting events to the creation of immersive Virtual Reality
content. This summer we will launch a Sky VR app, confirming Sky as
the home of quality VR content, along with a new mission to create
high-end productions, exclusive to Sky VR.
Service
We place the customer at the heart of everything we do and are
sharing best practice to continually improve our customer
service.
In the UK and Ireland, customers increasingly want to be able to
interact with us online. With our Digital First programme we
receive over 4 million visits per week to our online help and
account management sites and our service app has been downloaded 2
million times. By offering customers more ways to interact with us
digitally, satisfaction levels are industry leading, as reflected
in Ofcom's customer satisfaction surveys which consistently place
Sky as number 1. We are focused on resolving customer issues the
first time we are contacted, helping to drive a 10% reduction in
call volumes year on year.
By adopting best practice, sales call conversion in Italy has
improved by 10 percentage points year on year. We have worked on
optimising our digital channels in Italy and launched an
advertising campaign to strengthen consumer awareness of our
self-help touchpoints. This helped to drive a further 1 million
downloads of our self-service mobile app to over 2.9 million since
launch in November 2014. In addition, over one million customers
have now signed up to our Extra loyalty programme - offering
rewards to customers in Italy based on their tenure. Together these
programmes have resulted in a 10% increase in customer satisfaction
scores.
In Germany, we have focussed on improvements across our contact
centre estate, resulting in a significant reduction in average
customer handling times. Combined with improved product
reliability, call volumes reduced 16% year on year.
Synergies and integration
On the second anniversary of announcing our acquisition of Sky
Italia and Sky Deutschland, we have transformed the business into a
single group and extended our capabilities. The benefits of
operating as one company are coming through, whether from joint
content acquisitions, to single product and brand groups, to
consolidated broadcast, procurement and data centre operations.
We have designed a single product roadmap, which is enabling all
markets to deliver innovation at a pace they could not have
achieved alone. For example, in June we launched our UK
market-leading Sky Sports app in Italy, built by our new digital
team in Leeds. In July we launched our new Sky Kids app in Germany,
just three months after its launch in the UK and Ireland. Looking
ahead, we will extend the Sky Q platform to both Germany and Italy
over the course of the coming year.
Our group content function balances group-wide scale with deep
in-market expertise. Over the course of the year we have signed key
group-wide agreements with HBO, Showtime and Sony, as well as
simultaneously broadcasting Sky original programmes The Last
Panthers and Gomorrah 2. In 2016/17 we will bring six more
pan-European drama commissions to screen across the group and are
increasingly signing group-wide content deals for our common family
of entertainment and cinema channels. Our production hub for Sky
Arts in Milan is now complete, with Masters of Photography produced
in time for the launch of the Sky Arts linear channel in Germany
earlier this month.
We have adopted a common brand across the group, and by December
2016 we will have completed the roll-out of common channel brands
and a consistent look and feel across our channels, allowing
on-screen graphics and promotions to be shared group-wide. We
relaunched Sky Movies as Sky Cinema in the UK and Ireland earlier
this month, with the service set to become the biggest dedicated
movie subscription service in Europe as those in Germany, Austria
and Italy are also rebranded and relaunched under the same
name.
We are also consolidating broadcast and over-the-top operations
(OTT) across the group. In April we moved the playout for 24 German
channels to our enlarged broadcast facility in Milan. We remain on
track to broadcast almost 100 German channels from this facility by
the end of 2016. We have nearly completed the build of our common
OTT platform, which will provide the underlying infrastructure for
NOW TV, Sky Go and Sky Q products across the group.
GROUP FINANCIAL PERFORMANCE
Unless otherwise stated, all numbers are presented on an
adjusted basis for the full year ended 30 June 2016. For
comparative amounts in the prior year, numbers are presented on an
adjusted like for like basis (i.e. including a full twelve months
of Italy and Germany) and are translated at a constant currency
rate of EUR1.34:GBP1. For a reconciliation to amounts at actual
exchange rates see page [3]. The current year results include 53
weeks of trading compared with 52 weeks in the prior year.
Revenue
Group revenues grew by 7% to GBP11,965 million (2015: GBP11,221
million) with growth in each territory. UK and Ireland revenue was
up 7% to GBP8,371 million (2015: GBP7,820 million), revenue in
Germany grew 12% to GBP1,512 million (2015: GBP1,352 million),
whilst Italy grew by 2% to GBP2,082 million (2015: GBP2,049
million), reversing two consecutive years of decline.
We saw continued strong growth in subscription revenue, our
largest category, which was up 6% across the group. Alongside this,
we saw excellent - and even faster - rates of growth across all
other revenue streams with transactional revenues up 15%,
programming and channel sales up 17%, and advertising revenues up
9%.
Costs
Total costs grew by 6%, below the rate of revenue growth.
We continue to invest in programming which was up 6% as we
increased investment in each territory in original content and box
sets. Savings created by not renewing the Champions League in the
UK and Italy, along with the absence of the biennial Ryder Cup in
each territory were partially offset by higher Bundesliga costs.
Our investment in entertainment was more weighted towards the final
quarter of the year, with the return of key shows such as The
Tunnel and The Blacklist alongside the launch of Billions on Sky
Atlantic.
Direct network costs increased by 12%, below the rate of home
communications revenue growth, as we saw continued strong growth in
customers and increased fibre penetration over the last 12 months,
whilst sales, general and administrative costs increased by just
4%.
Profit and earnings
Operating profit grew strongly, up 12% to a record annual profit
of GBP1,558 million (2015: GBP1,397 million) as we combined
excellent revenue growth with careful choices within our cost base
whilst continuing to invest in programming. This has driven a 60
basis point expansion in our operating margin.
Adjusting for depreciation and amortisation of GBP620 million,
group EBITDA was up 8% to GBP2,178 million (2015: GBP2,022
million).
After a tax charge of GBP269 million (2015: GBP251 million) at
an effective tax rate of 20%, profit after tax for the year
increased by 14% to GBP1,077 million (2015:GBP945 million),
resulting in adjusted earnings per share of 63.1 pence (2015: 56.0
pence). The weighted average number of shares, excluding those held
by the Employee Share Ownership Plan ('ESOP') for the settlement of
employee share awards, was 1,707 million (2015: 1,690 million). The
closing number of shares excluding the ESOP shares at 30 June 2016
was 1,708 million (2015: 1,704 million).
Adjusting items
Statutory profit from continuing operations for the prior year
of GBP1,332 million included a total GBP791 million one-off gain on
the disposals of our shareholding in ITV (GBP492 million) and our
stake in the National Geographic Channel (GBP299 million).
Statutory profit for the current year of GBP663 million is after
the deduction of operating expenses of GBP581 million (2015: GBP396
million) principally comprising advisory and transaction fees
incurred on the purchase of the remaining minority shareholdings in
Sky Deutschland; the costs of integrating both Sky Italia and Sky
Deutschland in the enlarged group; corporate efficiency and
restructuring programmes in each territory; and the ongoing
amortisation of acquired intangible assets.
Group cash flow and financial position
Net debt as at 30 June 2016 was GBP6.2 billion (30 June 2015:
GBP5.1 billion). Non-cash movements accounted for GBP918 million of
this increase, predominantly due to the retranslation of Euro
denominated debt into sterling at a less favourable 30 June 2016
exchange rate of EUR1.20 (2015: EUR1.41). This increase in net debt
reverses a reduction in net debt enjoyed in the period from the
completion date of the Sky Europe transaction to 30 June 2015 where
foreign exchange benefitted net debt by GBP446m. Underlying net
debt increased by only GBP244 million, the majority of which
related to the one time GBP170 million for the completion of the
Sky Deutschland squeeze-out.
On the basis of average exchange rates (as used in the groups
banking covenant) our net debt to EBITDA ratio reduced to 2.4 times
(2015: 2.6 times). The group reaffirms its target to reduce
leverage to no more than two times net debt/ EBITDA over the medium
term.
The group continues to maintain a strong financial position and
has ample headroom to its financial covenants, including excellent
liquidity with cash of GBP2.1 billion as at 30 June 2016, and
access to a GBP1 billion Revolving Credit Facility which remained
wholly undrawn throughout the period, and which is committed until
November 2021. The group has a well spread portfolio of debt
maturities, with an average maturity of seven years, and no debt
maturing prior to October 2017.
Returns to shareholders
The Directors' proposed final dividend of 20.95 pence per share
takes the total dividend payable in respect of the financial year
to 33.50 pence per share, an increase of 2% and the twelfth
successive year of growth. Over the past five years our dividend
has grown by a total of 44%, with ordinary shareholders having
received GBP2.6 billion in aggregate, the equivalent of 154 pence
per share.
It remains our policy to maintain a progressive dividend policy,
'looking through' occasional periods of earnings dilution,
including the 2016/17 financial year in which we expect to grow our
dividend at a similar rate whilst our UK business absorbs the
one-time step up in cost in the first year of the new three year
Premier League contract.
The ex-dividend date will be 6 October 2016 and, subject to
shareholder approval at the 2016 Annual General Meeting, the final
dividend of 20.95 pence will be paid on 28 October 2016 to
shareholders on the register at the close of business on 7 October
2016.
CORPORATE
Sky will hold a capital markets day in September or October
2016. The capital markets day will supplement its regular
communications with shareholders. Further information about the day
will be provided in due course.
In addition, as a result of the changing breadth and territorial
diversity of the Group, and in order to provide a more relevant
longer term focus which better reflects the way we manage the
business, from Q1 Sky will provide two quarterly trading statements
for the first and third quarters that will give key information and
financials for the quarter, instead of publishing full financial
results and operational KPIs. The first quarterly trading statement
will be published for Q1 2017 on Friday 21 October 2016.
Board changes
Dave Lewis has decided to step down from the Board at the
conclusion of the 2016 AGM and will not therefore be seeking
reappointment. The Board would like to thank Dave for his
significant contribution since joining the Board in 2012.
The Board has started the process to appoint a new Independent
Non-Executive Director to ensure that the Board continues to be
comprised of a majority of Independent Non-Executive Directors
Group KPI Summary (unaudited)
All figures (000) FY12 FY13 FY14 FY15 FY16 Q4
unless stated
---------------------------- ------ ------ ------ ------ ------ --------
UK and Ireland 2.0% 5.9% 5.1% 6.0% 7.0% 10.7%
Germany and Austria 17.9% 16.3% 15.6% 9.1% 11.8% 17.4%
Italy (0.2)% 2.5% (0.3)% (2.5)% 1.6% 13.0%
Revenue growth 2.9% 6.2% 5.1% 4.7% 6.6% 12.0%
UK and Ireland 28,365 31,634 34,775 38,036 40,373 +362
Germany and Austria 4,552 5,543 6,164 7,133 8,042 +129
Italy 5,649 7,320 8,227 8,614 8,640 +12
Total Products 39,212 44,497 49,166 53,783 57,055 +503
UK and Ireland 10,606 11,153 11,495 12,001 12,446 +93
Germany and Austria 3,132 3,453 3,813 4,280 4,626 +59
Italy 4,901 4,756 4,725 4,725 4,742 +8
Retail customers 18,639 19,362 20,033 21,006 21,814 +160
UK and Ireland 3,673 3,677 4,041 4,028 3,923 (88)
Germany and Austria 129 124 213 146 144 -
Italy - - - - - -
Wholesale customers 3,802 3,801 4,254 4,174 4,067 (88)
Total Customers 22,441 23,163 24,287 25,180 25,881 +72
Churn
UK and Ireland 10.2% 10.7% 10.9% 9.8% 11.2% 11.2%
Germany and Austria 11.9% 12.3% 10.4% 8.6% 9.9% 9.9%
Italy 13.2% 13.9% 10.3% 9.6% 11.1% 11.1%
ARPU
UK and Ireland (GBP) GBP45 GBP46 GBP46 GBP47 GBP47 GBP47
Germany and Austria (EUR) EUR32 EUR35 EUR36 EUR34 EUR35 EUR35
Italy (EUR) EUR42 EUR42 EUR43 EUR43 EUR42 EUR42
---------------------------- ------ ------ ------ ------ ------ --------
- Wholesale customers taking at least one paid-for Sky channel.
The customer numbers are as reported to us at the end of June
2016.
- In the UK and Ireland, paid-for products includes TV, Sky+ HD,
Multiscreen, Sky Go Extra, Broadband, Line Rental and
Telephony.
- In Italy, paid-for products includes TV, Multivision and paying HD.
- In Germany and Austria, paid-for products includes TV, Second
Smartcard, Premium HD and Mobile TV.
- ARPU is quarterly annualised, residential and presented as a monthly amount.
- Churn is 12 month rolling and includes residential customers
only, unless otherwise stated.
Enquiries:
Analysts/Investors:
Robert Kingston Tel: 020 7032 3726
Edward Steel Tel: 020 7032 2093
E-mail: investor-relations@sky.uk
Media:
Rowan Pearman Tel: 020 7032 1589
Eleanor Mills Tel: 020 7032 6615
Press office: SkyPress@sky.uk Tel: 020 7032 1261
There will be a presentation for analysts and investors at 9:00
a.m. (BST) at Allen & Overy, One Bishops Square, London, E1
6AD. Participants should register by contacting Charlotte Fox on
+44 20 7251 3801 or at Charlotte.Fox@finsbury.com. There will be a
separate conference call for US analysts and investors at 10.30
a.m. (EDT). To register for this please contact Dana Diver at
Taylor Rafferty on +1 212 889 4350. Alternatively you may register
online at http://www.invite-taylor-rafferty.com/_sky/2016FY. A live
webcast of both conference calls will be available via the Sky
website at https://corporate.sky.com/investors/latest-results.
Replays will subsequently be available.
Use of measures not defined under IFRS
This press release contains certain information on the Group's
financial position, results and cash flows that have been derived
from measures calculated in accordance with IFRS. This information
should not be read in isolation from the related IFRS measures.
Forward looking statements
This document contains certain forward looking statements with
respect to the Group's financial condition, results of operations
and business, and our strategy, plans and objectives for the Group.
These statements include, without limitation, those that express
forecasts, expectations and projections, such as forecasts,
expectations and projections in relation to new products and
services, the potential for growth of free-to-air and pay
television, fixed line telephony, broadband and bandwidth
requirements, advertising growth, DTH and OTT customer growth, On
Demand, NOW TV, Sky Go, Sky Go Extra, Sky+ HD, Sky Q, Sky Store,
Sky Online, IPTV, mobile, Multiscreen and other services
penetration, revenue, administration costs and other costs,
advertising growth, churn, profit, cash flow, products and our
broadband network footprint, content, wholesale, marketing,
synergies and integration, and capital expenditure.
Although the Company believes that the expectations reflected in
such forward looking statements are reasonable, these statements
are not guarantees of future performance and are subject to risks,
uncertainties and other factors, some of which are beyond our
control, are difficult to predict and could cause actual results to
differ materially from those expressed or implied or forecast in
the forward looking statements. Information on the significant
risks and uncertainties are described in the "Principal risks and
uncertainties" section of Sky's Annual Report for the full year
ended 30 June 2015 (as updated in Sky's results for the six months
ended 31 December 2015).
All forward looking statements in this document are based on
information known to the Group on the date hereof. The Group
undertakes no obligation publicly to update or revise any forward
looking statements, whether as a result of new information, future
events or otherwise.
Appendix 1 - Consolidated Financial Information
Consolidated Income Statement for the year ended 30 June
2016
2016 2015
Notes GBPm GBPm
------------------------------------------------------------------- ------- --------- --------
Continuing Operations
Revenue 2 11,965 9,989
Operating expense 2 (10,988) (9,017)
EBITDA 1,970 1,738
Depreciation and amortisation (993) (766)
------------------------------------------------------------------- ------- --------- --------
Operating profit 977 972
------------------------------------------------------------------- ------- --------- --------
Share of results of joint ventures and associates 12 2 28
Investment income 6 17 8
Finance costs 6 (244) (283)
Profit on disposal of available-for-sale investments 4 - 492
Profit on disposal of associate 5 - 299
Profit before tax 752 1,516
------------------------------------------------------------------- ------- --------- --------
Taxation 7 (89) (184)
Profit for the year from continuing operations 663 1,332
------------------------------------------------------------------- ------- --------- --------
Discontinued Operations
Profit for the year from discontinued operations 3 - 620
Profit for the year 663 1,952
------------------------------------------------------------------- ------- --------- --------
Profit (loss) for the year attributable to:
Equity shareholders of the parent company 666 1,957
Non-controlling interests (3) (5)
663 1,952
------------------------------------------------------------------- ------- --------- --------
Adjusted earnings per share from adjusted profit for the year (in pence)
Basic 8 63.1p 56.0p
Diluted 8 62.6p 55.3p
------------------------------------------------------------------- ------- --------- --------
Earnings per share from profit for the year (in pence)
Basic
Continuing operations 8 39.0p 79.1p
Discontinued operations 8 - 36.7p
Total 8 39.0p 115.8p
------------------------------------------------------------------- ------- --------- --------
Diluted
Continuing operations 8 38.7p 78.2p
Discontinued operations 8 - 36.2p
Total 8 38.7p 114.4p
------------------------------------------------------------------- ------- --------- --------
Consolidated Statement of Comprehensive Income for the year
ended 30 June 2016
2016 2015
GBPm GBPm
Profit for the year 663 1,952
Other comprehensive income
Amounts recognised directly in equity that may subsequently be recycled to the income statement
Gain on revaluation of available-for-sale investments 1 36
Gain on cash flow hedges 699 276
Tax on cash flow hedges (138) (57)
(Loss) gain on net investment hedges (897) 446
Exchange differences on translation of foreign operations 1,082 (659)
Actuarial movements on employee benefit obligations (3) -
744 42
------------------------------------------------------------------------------------------------ ----- -----
Amounts reclassified and reported in the income statement
Gain on cash flow hedges (458) (174)
Tax on cash flow hedges 92 37
Transfer to income statement on disposal of available-for-sale investment (see note 4) - (492)
Transfer to income statement on disposal of associate (see note 5) - (38)
(366) (667)
------------------------------------------------------------------------------------------------ ----- -----
Other comprehensive income (loss) for the year (net of tax) 378 (625)
------------------------------------------------------------------------------------------------- ----- -----
Total comprehensive income for the year 1,041 1,327
------------------------------------------------------------------------------------------------- ----- -----
Total comprehensive income (loss) for the year attributable to:
Equity shareholders of the parent company 1,044 1,345
Non-controlling interests (3) (18)
1,041 1,327
---------------------------------------------------------------- ----- -----
Consolidated Balance Sheet as at 30 June 2016
2016 2015
Notes GBPm GBPm
Non-current assets
Goodwill 4,713 4,160
Intangible assets 10 4,446 4,084
Property, plant and equipment 11 1,957 1,646
Investments in joint ventures and associates 12 123 133
Available-for-sale investments 13 71 31
Deferred tax assets 14 245 175
Programme distribution rights 15 36 31
Trade and other receivables 16 95 86
Derivative financial assets 1,022 453
12,708 10,799
------------------------------------------------------------------ ----- ------ ---------
Current assets
Inventories 15 990 847
Trade and other receivables 16 1,349 1,096
Current tax assets 14 8
Short-term deposits - 1,100
Cash and cash equivalents 2,137 1,378
Derivative financial assets 212 130
4,702 4,559
------------------------------------------------------------------ ----- ------ ---------
Total assets 17,410 15,358
------------------------------------------------------------------ ----- ------ ---------
Current liabilities
Borrowings 19 31 494
Trade and other payables 17 3,902 3,430
Current tax liabilities 162 154
Provisions 18 181 103
Derivative financial liabilities 50 23
4,326 4,204
------------------------------------------------------------------ ----- ------ ---------
Non-current liabilities
Borrowings 19 8,901 7,418
Trade and other payables 17 81 94
Provisions 18 94 77
Derivative financial liabilities 259 60
Deferred tax liabilities 14 308 281
9,643 7,930
------------------------------------------------------------------ ----- ------ ---------
Total liabilities 13,969 12,134
Share capital 21 860 860
Share premium 2,704 2,704
Reserves (117) (399)
Total equity attributable to equity shareholders of the parent company 3,447 3,165
------------------------------------------------------------------------- ------ ---------
Total (deficit) equity attributable to non-controlling interests (6) 59
Total liabilities and equity 17,410 15,358
------------------------------------------------------------------ ----- ------ ---------
Consolidated Cash Flow Statement for the year ended 30 June
2016
2016 2015
Notes GBPm GBPm
Cash flows from operating activities
Cash generated from operations 22 2,086 2,080
Interest received 10 9
Taxation paid (189) (219)
Net cash from operating activities of continuing operations 1,907 1,870
---------------------------------------------------------------------------------------- ----- ------- -------
Cash generated from discontinued operations 3 - 55
Taxation paid by discontinued operations 3 - (11)
Net cash from operating activities of discontinued operations - 44
---------------------------------------------------------------------------------------- ----- ------- -------
Net cash from operating activities 1,907 1,914
---------------------------------------------------------------------------------------- ----- ------- -------
Cash flows from investing activities
Dividends received from joint ventures and associates 20 25
Funding to joint ventures and associates (8) (10)
Purchase of joint ventures and associates (1) -
Purchase of property, plant and equipment (542) (385)
Proceeds on disposal of property, plant and equipment 3 -
Purchase of intangible assets (432) (357)
Purchase of subsidiaries (net of cash and cash equivalents purchased) (26) (6,340)
Purchase of available-for-sale investments (50) (88)
Proceeds on disposal of available-for-sale investments 16 546
Decrease (increase) in short-term deposits 1,100 (805)
Net cash from (used in) investing activities of continuing operations 80 (7,414)
---------------------------------------------------------------------------------------- ----- ------- -------
Purchase of property, plant and equipment by discontinued operations 3 - (8)
Proceeds on disposal of discontinued operations (net of cash and cash equivalents sold) 3 - 568
Net cash from investing activities of discontinued operations - 560
---------------------------------------------------------------------------------------- ----- ------- -------
Net cash from (used in) investing activities 80 (6,854)
---------------------------------------------------------------------------------------- ----- ------- -------
Cash flows from financing activities
Net proceeds from borrowings 353 5,364
Repayment of borrowings (432) (272)
Repayment of obligations under finance leases (18) (10)
Proceeds from disposal of shares in Employee Share Ownership Plan ("ESOP") 10 10
Purchase of own shares for ESOP (200) (12)
Issue of own shares - 1,346
Interest paid (231) (246)
Purchase of non-controlling interests (170) (328)
Dividends paid to shareholders of the parent (564) (549)
Dividends paid to holders of non-controlling interests (3) -
Net cash (used in) from financing activities (1,255) 5,303
---------------------------------------------------------------------------------------- ----- ------- -------
Effect of foreign exchange rate movements 27 (67)
Net increase in cash and cash equivalents 759 296
---------------------------------------------------------------------------------------- ----- ------- -------
Cash and cash equivalents at the beginning of the year 1,378 1,082
Cash and cash equivalents at the end of the year 2,137 1,378
---------------------------------------------------------------------------------------- ----- ------- -------
Consolidated Statement of Changes in Equity for the year ended
30 June 2016
Attributable to equity shareholders
of the parent company
Available- Retained Total
Share Share ESOP Hedging for-sale Other (deficit) share-holders' Non-controlling Total
capital premium reserve reserve reserve reserves earnings equity interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
-------------------- -------- -------- -------- -------- ----------- --------- ---------- --------------- ---------------- -------
At 1 July 2014 781 1,437 (145) (20) 455 455 (1,891) 1,072 - 1,072
Profit (loss)
for the year - - - - - - 1,957 1,957 (5) 1,952
Net investment
hedges - - - - - 446 - 446 - 446
Exchange
differences
on translation
of foreign
operations - - - - - (646) - (646) (13) (659)
Revaluation
of
available-for-sale
investments - - - - 36 - - 36 - 36
Transfer to
income statement
on disposal
of associate
(see note 5) - - - - - (38) - (38) - (38)
Transfer to
income statement
on disposal
of
available-for-sale
investment
(see note 4) - - - - (492) - - (492) - (492)
Transfer on
disposal of
subsidiaries - - - - - (97) 97 - - -
Recognition
and transfer
of cash flow
hedges - - - 102 - - - 102 - 102
Tax on items
taken directly
to equity - - - (20) - - - (20) - (20)
Total comprehensive
income (loss)
for the year - - - 82 (456) (335) 2,054 1,345 (18) 1,327
Share-based
payment - - 20 - - - 69 89 - 89
Issue of own
equity shares 79 1,267 - - - - - 1,346 - 1,346
Non-controlling
interests arising
on purchase
of subsidiaries - - - - - - - - 191 191
Tax on items
taken directly
to equity - - - - - - 17 17 - 17
Share buy-back
programme:
- Reversal
of financial
liability for
close period
purchases - - - - - - 59 59 - 59
Dividends - - - - - - (549) (549) - (549)
Purchase of
non-controlling
interests - - - - - - (214) (214) (114) (328)
At 30 June
2015 860 2,704 (125) 62 (1) 120 (455) 3,165 59 3,224
-------------------- -------- -------- -------- -------- ----------- --------- ---------- --------------- ---------------- -------
Profit (loss)
for the year - - - - - - 666 666 (3) 663
Net investment
hedges - - - - - (897) - (897) - (897)
Exchange
differences
on translation
of foreign
operations - - - - - 1,082 - 1,082 - 1,082
Revaluation
of
available-for-sale
investments - - - - 1 - - 1 - 1
Recognition
and transfer
of cash flow
hedges - - - 241 - - - 241 - 241
Tax on items
taken directly
to equity - - - (46) - - - (46) - (46)
Actuarial movements
on employee
benefit
obligations - - - - - (3) - (3) - (3)
Total comprehensive
income (loss)
for the year - - - 195 1 182 666 1,044 (3) 1,041
-------------------- -------- -------- -------- -------- ----------- --------- ---------- --------------- ---------------- -------
Share-based
payment - - - - - - (88) (88) - (88)
Non-controlling
interests arising
on purchase
of subsidiaries - - - - - - - - 1 1
Dividends - - - - - - (564) (564) (3) (567)
Purchase of
non-controlling
interests - - - - - - (110) (110) (60) (170)
At 30 June
2016 860 2,704 (125) 257 - 302 (551) 3,447 (6) 3,441
-------------------- -------- -------- -------- -------- ----------- --------- ---------- --------------- ---------------- -------
Notes to the consolidated financial statements
1 Basis of Preparation
The financial information set out in this preliminary
announcement does not constitute statutory financial statements for
the years ended 30 June 2016 or 2015, for the purpose of the
Companies Act 2006, but is derived from those financial statements.
Statutory financial statements for 2016, on which the Group's
auditors have given an unqualified report which does not contain
statements under s. 498(2) or (3) of the Companies Act 2006, will
be filed with the Registrar of Companies by 31 December 2016.
Statutory financial statements for 2015 have been filed with the
Registrar of Companies. The Group's auditors have reported on those
accounts; their reports were unqualified and did not contain
statements under s. 498(2) or (3) of the Companies Act 2006.
Whilst the financial information included in this press release
has been prepared in accordance with International Financial
Reporting Standards ("IFRS") as adopted for use in the European
Union and as issued by the International Accounting Standards
Board, this announcement does not itself contain sufficient
information to comply with IFRS. The consolidated financial
statements have been prepared using accounting policies and methods
of computation consistent with those applied in the financial
statements for the year ended 30 June 2015, except for new
accounting pronouncements which have become effective this year,
none of which had a material impact on the Group's results or
financial position.
The Group maintains a 52 or 53 week fiscal year ending on the
Sunday nearest to 30 June in each year. In fiscal 2016, this date
was 3 July 2016, this being a 53 week year (fiscal year 2015: 28
June 2015, 52 week year). For convenience purposes, the Group
continues to date its consolidated financial statements as at 30
June and to refer to the accounting period as a "year" for
reporting purposes.
2 Operating Segments
The Group has three reportable segments that are defined by
geographic area to reflect how the Group's operations are monitored
and managed. The reportable segments presented reflect the Group's
management and reporting structure as viewed by the Board of
Directors, which is considered to be the Group's chief operating
decision maker.
Reportable segment Description
UK & Ireland The activities and operations
of the pay TV, home communications
and adjacent businesses in the
UK and Ireland
Germany & Austria The activities and operations
of the pay TV and adjacent businesses
in Germany and Austria
Italy The activities and operations
of the pay TV and adjacent businesses
in Italy
Segmental income statement for the year ended 30 June 2016
Adjusting Items & Statutory Group
UK & Ireland Germany & Austria Italy Eliminations Total
GBPm GBPm GBPm GBPm GBPm
--------------------- ------------- ------------------ -------- -------------------- --------------------
Continuing
Operations
Subscription 7,006 1,379 1,800 - 10,185
Transactional 146 18 33 - 197
Programme and
Channel Sales 610 21 12 (1) 642
Advertising 524 52 202 - 778
Other 88 42 36 (3) 163
Revenue 8,374 1,512 2,083 (4) 11,965
--------------------- ------------- ------------------ -------- -------------------- --------------------
Inter-segment
revenue (3) - (1) 4 -
Revenue from
external customers 8,371 1,512 2,082 - 11,965
--------------------- ------------- ------------------ -------- -------------------- --------------------
Programming (3,032) (881) (1,250) (54) (5,217)
Direct network costs (939) - - - (939)
Sales, general and
administration (2,899) (627) (783) (523) (4,832)
Operating expense (6,870) (1,508) (2,033) (577) (10,988)
--------------------- ------------- ------------------ -------- -------------------- --------------------
EBITDA 1,910 82 186 (208) 1,970
Depreciation and
amortisation (406) (78) (136) (373) (993)
--------------------- ------------- ------------------ -------- -------------------- --------------------
Operating profit 1,504 4 50 (581) 977
--------------------- ------------- ------------------ -------- -------------------- --------------------
Share of results of
joint ventures and
associates 2
Investment income 17
Finance costs (244)
Profit before tax 752
--------------------- ------------- ------------------ -------- -------------------- --------------------
Segmental income statement for the year ended 30 June 2015
Results for full year
Germany &
Adjusting Austria and
Germany & Items & Italy Statutory
UK & Ireland Austria Italy Eliminations pre-acquisition Group Total
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------- -------------- --------------- -------- -------------- ----------------- ---------------
Continuing
Operations
Subscription 6,596 1,256 1,845 - (1,179) 8,518
Transactional 120 18 35 - (20) 153
Programme and
Channel Sales 515 20 16 (1) (9) 541
Advertising 510 44 162 - (67) 649
Other 95 39 28 (9) (25) 128
Revenue 7,836 1,377 2,086 (10) (1,300) 9,989
-------------------- -------------- --------------- -------- -------------- ----------------- ---------------
Inter-segment
revenue (16) - - 10 6 -
Revenue from
external customers 7,820 1,377 2,086 - (1,294) 9,989
-------------------- -------------- --------------- -------- -------------- ----------------- ---------------
Programming (2,865) (764) (1,258) (9) 724 (4,172)
Direct network
costs (840) - - - - (840)
Sales, general and
administration (2,781) (624) (767) (377) 544 (4,005)
Operating expense (6,486) (1,388) (2,025) (386) 1,268 (9,017)
-------------------- -------------- --------------- -------- -------------- ----------------- ---------------
EBITDA 1,740 74 216 (163) (129) 1,738
Depreciation and
amortisation (390) (85) (155) (233) 97 (766)
-------------------- -------------- --------------- -------- -------------- ----------------- ---------------
Operating profit
(loss) 1,350 (11) 61 (396) (32) 972
-------------------- -------------- --------------- -------- -------------- ----------------- ---------------
Share of results of
joint ventures and
associates 28
Investment income 8
Finance costs (283)
Profit on disposal
of
available-for-sale
investments 492
Profit on disposal
of associate 299
Profit before tax 1,516
-------------------- -------------- --------------- ------------------------ ----------------- ---------------
Results for each segment are presented on an adjusted basis. A
reconciliation of statutory to adjusted results is shown in the Non
GAAP measures section which also includes a description of the
adjusting items.
3 Discontinued operations
On 19 March 2015, the Group completed the sale of a controlling
stake in its online betting and gaming business, Sky Betting &
Gaming ("Sky Bet"), to funds advised by CVC Capital Partners and
members of the Sky Bet management team. Sky has retained an equity
stake of 20% post completion in Sky Bet.
Sky Bet represented a separate major line of business for the
Group. As a result its operations have been treated as discontinued
for the year ended 30 June 2015. A single amount is shown on the
face of the consolidated income statement comprising the post-tax
result of discontinued operations and the post-tax profit
recognised on the disposal of the discontinued operation. A pre-tax
profit of GBP600 million arose on the disposal of Sky Bet, being
the net proceeds of disposal less the carrying amount of Sky Bet's
net liabilities and attributable goodwill.
The results of discontinued operations, which have been included
in the consolidated income statement, were as follows:
2015
To 19
March(i)
GBPm
Revenue 158
Operating expense (128)
Operating profit 30
----------------------------------------- ----------
Profit on disposal 600
Profit before tax 630
----------------------------------------- ----------
Attributable tax expense(ii) (10)
Profit for the year from discontinued
operations 620
----------------------------------------- ----------
(i) Results for the year ended 30 June 2015 include the results
of discontinued operations up to the date of disposal (19 March
2015).
(ii) Attributable tax expense comprises GBP9 million in respect
of operating activities and GBP1 million arising as a result of the
disposal.
4 Profit on disposal of available-for-sale investments
On 17 July 2014, the Group sold a shareholding of 6.4% in ITV
plc, consisting of 259,820,065 ITV shares for an aggregate
consideration of GBP481 million. A profit of GBP429 million was
realised on disposal, being the excess of the consideration above
the previously written-down value of the shares for accounting
purposes (GBP52 million).
On 5 November 2014, the Group sold a further shareholding of
0.8% in ITV plc, consisting of 31,864,665 ITV shares for an
aggregate consideration of GBP65 million. A profit of GBP58 million
was realised on disposal, being the excess of the consideration
above the previously written-down value of the shares for
accounting purposes (GBP7 million).
The Group recognised a gain of GBP5 million as a result of
measuring to fair value its equity interest in Sky Deutschland held
prior to the acquisition.
5 Profit on disposal of associate
On 12 November 2014, the Group transferred a shareholding of 21%
in NGC Network LLC and a shareholding of 21% in NGC Network Latin
America LLC to Twenty-First Century Fox, Inc. for an aggregate
consideration of GBP410 million as part of the purchase of Sky
Italia. A profit of GBP299 million was realised on disposal.
6 Investment income and finance costs
2016 2015
GBPm GBPm
------------------------------------ ----- -----
Investment income
Interest on cash, cash equivalents
and short-term deposits 9 8
Interest on other loans and
receivables 8 -
17 8
------------------------------------ ----- -----
2016 2015
GBPm GBPm
------------------------------------------ ------ ------
Finance costs
Interest payable and similar charges
Facility related costs (6) (44)
Guaranteed Notes (224) (214)
Finance lease interest (8) (7)
(238) (265)
------------------------------------------ ------ ------
Other finance income (expense)
Remeasurement of borrowings and
borrowings-related derivative financial
instruments (not qualifying for
hedge accounting) (12) (16)
Remeasurement of other derivative
financial instruments (not qualifying
for hedge accounting) 6 (3)
Gain arising on derivatives in a
designated fair value hedge accounting
relationship 1 7
Loss arising on adjustment for hedged
item in a designated fair value
hedge accounting relationship (1) (6)
(6) (18)
------------------------------------------ ------ ------
(244) (283)
------------------------------------------ ------ ------
7 Taxation
Taxation recognised in the income statement
2016 2015
GBPm GBPm
-------------------------------------- ----- ----
Current tax expense
Current year - UK 224 229
Adjustment in respect of prior
years - UK (29) (39)
Current year - Overseas 19 62
Total current tax charge 214 252
-------------------------------------- ----- ----
Deferred tax expense
Origination and reversal of temporary
differences - UK 5 (21)
Adjustment in respect of prior
years - UK 9 21
Origination and reversal of temporary
differences - Overseas (130) (67)
Adjustment in respect of prior
years - Overseas (9) (1)
Total deferred tax credit (125) (68)
-------------------------------------- ----- ----
Taxation 89 184
-------------------------------------- ----- ----
8 Earnings per share
The weighted average number of shares for the year was:
2016 2015
Millions Millions
of shares of shares
Ordinary shares 1,719 1,706
ESOP trust ordinary shares (12) (16)
Basic shares 1,707 1,690
------------------------------ ---------- ----------
Dilutive ordinary shares from
share options 14 21
Diluted shares 1,721 1,711
------------------------------ ---------- ----------
Basic and diluted earnings per share are calculated by dividing
the profit for the year attributable to equity shareholders of the
parent company by the weighted average number of shares for the
year. In order to provide a measure of underlying performance,
management has chosen to present an adjusted profit for the year
which excludes items that may distort comparability. Such items
arise from events or transactions that fall within the ordinary
activities of the Group but which management believes should be
separately identified to help explain underlying performance.
2016 2015
GBPm GBPm
-------------------------------------- ------ ------
Profit from continuing operations 663 1,332
Loss attributable to non-controlling
interests 3 5
Profit from continuing operations
attributable to equity shareholders
of the parent company 666 1,337
-------------------------------------- ------ ------
Profit from discontinued
operations - 620
Profit attributable to equity
shareholders of the parent
company 666 1,957
-------------------------------------- ------ ------
2016 2015
GBPm GBPm
----- -----
Reconciliation from profit for the
year from continuing operations attributable
to equity shareholders of the parent
company to adjusted profit for the
year attributable to equity shareholders
of the parent company
Profit for the year from continuing
operations attributable to equity shareholders
of the parent company 666 1,337
Costs relating to corporate restructuring
and efficiency programmes 142 105
Costs relating to the integration of
Sky Deutschland and Sky Italia in the
enlarged Group 84 10
Advisory and transaction fees and finance
costs incurred on the purchase of Sky
Deutschland and Sky Italia 4 107
Amortisation of acquired intangible
assets 347 228
Profit on disposal of available-for-sale
investments - (492)
Profit on disposal of associate - (299)
Remeasurement of all derivative financial
instruments not qualifying for hedge
accounting and hedge ineffectiveness 14 18
Tax adjusting items and the tax effect
of above items (180) (67)
Adjusted profit for the year attributable
to equity shareholders of the parent
company 1,077 947
------------------------------------------------ ----- -----
9 Dividends
2016 2015
GBPm GBPm
----------------------------------- ---------------- ----
Dividends declared and paid during
the year
2014 Final dividend paid: 20.00p
per ordinary share - 340
2015 Interim dividend paid: 12.30p
per ordinary share - 209
2015 Final dividend paid: 20.50p
per ordinary share 350 -
2016 Interim dividend paid: 12.55p
per ordinary share 214 -
564 549
----------------------------------- ---------------- ----
The 2016 final dividend proposed is 20.95 pence per ordinary
share being GBP358 million. The dividend was not declared at the
balance sheet date and is therefore not recognised as a liability
as at 30 June 2016.
10 Intangible assets
Internally
generated Acquired
intangible intangible
Software Customer assets assets
development contracts not not
Internally (external) and yet yet
generated and related Other available available
intangible software customer intangible for for
Trademarks assets licences relationships assets use use Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Cost
At 1 July
2015 476 616 603 2,979 426 122 116 5,338
Additions
from
business
combinations - - - 2 18 - - 20
Additions 1 96 62 - 70 108 127 464
Disposals - (44) (48) (6) (9) - - (107)
Transfers - 82 22 - 1 (82) (23) -
Foreign
exchange
movements 69 - 27 476 4 - 8 584
At 30 June
2016 546 750 666 3,451 510 148 228 6,299
-------------- ------------ ------------- ------------ -------------- ------------ ----------- ------------- ------
Amortisation
At 1 July
2015 4 309 340 271 330 - - 1,254
Amortisation - 113 100 340 73 - - 626
Disposals - (44) (48) (6) - - - (98)
Impairments - 7 3 4 2 - - 16
Foreign
exchange
movements 1 - 10 44 - - - 55
At 30 June
2016 5 385 405 653 405 - - 1,853
-------------- ------------ ------------- ------------ -------------- ------------ ----------- ------------- ------
Carrying
amounts
At 1 July
2015 472 307 263 2,708 96 122 116 4,084
At 30 June
2016 541 365 261 2,798 105 148 228 4,446
-------------- ------------ ------------- ------------ -------------- ------------ ----------- ------------- ------
11 Property, plant and equipment
Equipment, Assets not
Freehold land furniture and Owned set-top yet available
and buildings Leasehold improvements fixtures boxes for use Total
GBPm GBPm GBPm GBPm GBPm GBPm
---------------- --------------- ----------------------- --------------- ---------------- --------------- ------
Cost
At 1 July 2015 391 95 1,609 372 317 2,784
Additions from
business
combinations - - 3 - - 3
Additions 4 4 136 128 328 600
Disposals - (2) (70) (27) - (99)
Transfers 19 - 82 71 (172) -
Foreign
exchange
movements - 7 15 72 8 102
At 30 June 2016 414 104 1,775 616 481 3,390
---------------- --------------- ----------------------- --------------- ---------------- --------------- ------
Depreciation
At 1 July 2015 61 50 948 79 - 1,138
Depreciation 12 11 190 126 - 339
Impairments - - 11 - - 11
Disposals - (2) (69) (18) - (89)
Foreign
exchange
movements - 1 4 29 - 34
At 30 June 2016 73 60 1,084 216 - 1,433
---------------- --------------- ----------------------- --------------- ---------------- --------------- ------
Carrying
amounts
At 1 July 2015 330 45 661 293 317 1,646
At 30 June 2016 341 44 691 400 481 1,957
---------------- --------------- ----------------------- --------------- ---------------- --------------- ------
12 Investments in joint ventures and associates
The movement in joint ventures and associates during the year
was as follows:
2016 2015
GBPm GBPm
Share of net assets
At 1 July 133 173
Movement in net assets
- Funding, 8 10
- Dividends received (20) (25)
- Share of profits 2 28
- Acquisition of associate 1 86
- Disposal of associate - (149)
- Exchange differences on translation
of foreign joint ventures and
associates (1) 10
At 30 June 123 133
-------------------------------------- ---- -----
13 Available-for-sale investments
2016 2015
GBPm GBPm
Listed investments - 3
Unlisted investments 71 28
71 31
--------------------- ---- ----
Unlisted investments consist of minority equity stakes in a
number of technology and start-up companies. During the current
year, the Group purchased investments in iflix Limited (GBP32
million), DataXu Inc. (GBP7 million) and fuboTV Inc. (GBP4
million). Other principal investments include Roku Inc. and Whistle
Sports. During the current year, the Group disposed of its
investments in Elemental Technologies and 1Mainstream.
14 Deferred tax
Recognised deferred tax assets (liabilities)
Share-based Financial
Accelerated Intangibles Short-term payments instruments
tax on business temporary temporary temporary
depreciation combinations Tax losses differences differences differences Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
-------------- -------------- ------------- ------------- ------------- ------------- -------------- --------
At 1 July
2015 (20) (752) 553 83 59 (29) (106)
(Charge)
credit to
income (11) 78 45 (13) (8) 7 98
Charge to
equity - - - - (21) (49) (70)
Acquisition
of
subsidiaries - (4) - - - - (4)
Effect of
change in tax
rate
- Income 1 33 (2) (3) (2) - 27
- Equity - - - - - 3 3
Foreign
exchange
movements (5) (116) 100 12 - (2) (11)
At 30 June
2016 (35) (761) 696 79 28 (70) (63)
-------------- -------------- ------------- ------------- ------------- ------------- -------------- --------
15 Inventories
2016 2015
GBPm GBPm
Television programme rights 940 811
Set-top boxes and related equipment 26 26
Other inventories 24 10
Current inventory 990 847
------------------------------------ ----- ----
Non-current programme distribution
rights 36 31
Total inventory 1,026 878
------------------------------------ ----- ----
16 Trade and other receivables
2016 2015
GBPm GBPm
Net trade receivables 345 267
Amounts receivable from joint ventures
and associates 13 19
Amounts receivable from other related
parties 20 26
Prepayments 527 499
Accrued income 332 216
VAT 2 3
Other 110 66
Current trade and other receivables 1,349 1,096
---------------------------------------- ------------------------------- -------------------------------
Prepayments 8 6
Amounts receivable from joint ventures
and associates 77 70
Other receivables 10 10
Non-current trade and other receivables 95 86
---------------------------------------- ------------------------------- -------------------------------
Total trade and other receivables 1,444 1,182
---------------------------------------- ------------------------------- -------------------------------
17 Trade and other payables
2016 2015
GBPm GBPm
Trade payables 1,421 1,361
Amounts owed to joint ventures
and associates 14 16
Amounts owed to other related
parties 181 175
VAT 246 155
Accruals 1,375 1,160
Deferred income 462 401
Other payables 203 162
Current trade and other payables 3,902 3,430
------------------------------------- ----- -----
Trade payables 34 31
Amounts owed to other related
parties 1 5
Deferred income 7 6
Other payables 39 52
Non-current trade and other payables 81 94
------------------------------------- ----- -----
Total trade and other payables 3,983 3,524
------------------------------------- ----- -----
18 Provisions
At Provided Utilised At
1 July Reclassified during during during Foreign exchange 30 June
2015 the year the year the year movement 2016
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------- -------- ---------------------- ---------- ---------- ---------------------- ---------
Current liabilities
Restructuring
provision 21 4 20 (17) 1 29
Customer-related
provisions 33 - 47 (15) - 65
Other provisions 49 13 47 (23) 1 87
103 17 114 (55) 2 181
---------------------- -------- ---------------------- ---------- ---------- ---------------------- ---------
Non-current
liabilities
Other provisions 51 (17) 32 (10) 5 61
Employee benefit
obligations 26 - 3 (1) 5 33
77 (17) 35 (11) 10 94
---------------------- -------- ---------------------- ---------- ---------- ---------------------- ---------
19 Borrowings
2016 2015
GBPm GBPm
Current borrowings
Loan Notes 6 4
Guaranteed Notes - 468
Obligations under finance leases 25 22
31 494
Non-current borrowings
Loan Notes 1 2
Guaranteed Notes 8,839 7,340
Obligations under finance leases 61 76
8,901 7,418
--------------------------------- ----- -----
20 Financial instruments
The following table categorises the Group's financial
instruments which are held at fair value into one of three levels
to reflect the degree to which observable inputs are used in
determining their fair values:
Level 1 Level 2 Level 3
--------------- -------------- --------------
30 30 30 30 30 30
June June June June June June
2016 2015 2016 2015 2016 2015
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------ ------- ------ ------ ------ ------ ------
Financial assets
Available-for-sale
financial assets
Other investments - 3 - - 71 28
Financial assets
at fair value through
profit or loss
Interest rate swaps - - 79 62 - -
Cross-currency swaps - - 744 356 - -
Forward foreign
exchange contracts - - 411 165 - -
Total - 3 1,234 583 71 28
------------------------ ------- ------ ------ ------ ------ ------
Financial liabilities
Financial liabilities
at fair value through
profit or loss
Interest rate swaps - - (6) - - -
Cross-currency swaps - - (240) (40) - -
Forward foreign
exchange contracts - - (55) (43) - -
Embedded derivative - - (8) - - -
Total - - (309) (83) - -
------------------------ ------- ------ ------ ------ ------ ------
Level 1 fair values measured using quoted prices (unadjusted) in
active markets for identical assets or liabilities, including
shares in listed entities.
Level 2 fair values measured using inputs, other than quoted
prices included within Level 1, that are observable for the asset
or liability either directly or indirectly. Derivative financial
instrument fair values are present values determined from future
cash flows discounted at rates derived from market source data.
Level 3 fair values measured using inputs for the asset or
liability that are not based on observable market data. Certain of
the Group's unlisted available-for-sale financial assets are held
at fair value and are categorised as Level 3 in the fair value
hierarchy.
21 Share capital
2016 2015
GBPm GBPm
------------------------------------ ---- ----
Allotted, called-up and fully paid
shares of 50p
1,719,017,230 (2015: 1,719,017,230) 860 860
------------------------------------ ---- ----
22 Notes to the Consolidated Cash Flow Statement
Reconciliation of profit before tax to cash generated from
operations
2016 2015
GBPm GBPm
Continuing Operations
Profit before tax 752 1,516
Depreciation, impairment and losses
(profits) on disposal of property,
plant and equipment 356 297
Amortisation, impairment and losses
(profits) on disposal of intangible
assets 637 469
Share-based payment expense 100 91
Net finance costs 227 275
Profit on disposal of available-for-sale
investment - (492)
Profit on disposal of associate - (299)
Share of results of joint ventures
and associates (2) (28)
2,070 1,829
----------------------------------------- --------------------- ------------------
(Increase) decrease in trade and
other receivables (204) 1
(Increase) decrease in inventories (2) 568
Increase (decrease) in trade and
other payables 137 (367)
Increase in provisions 83 65
Increase (decrease) in derivative
financial instruments 2 (16)
Cash generated from operations 2,086 2,080
----------------------------------------- --------------------- ------------------
Appendix 2 - Non-GAAP measures
Reconciliation of cash generated from operations to adjusted
free cash flow
for the year ended 30 June 2016
2016 2015
Note GBPm GBPm
Cash generated from operations 22 2,086 2,080
Interest received 10 9
Taxation paid (189) (219)
Dividends received from joint ventures and associates 20 25
Funding to joint ventures and associates (8) (10)
Purchase of property, plant and equipment (542) (385)
Purchase of intangible assets (432) (357)
Interest paid (231) (246)
Free cash flow 714 897
----------------------------------------------------------------------------------------------- ---- ----- -----
Cash paid relating to the integration of Sky Deutschland and Sky Italia in the enlarged Group 34 8
Cash paid relating to corporate restructuring and efficiency programmes 22 34
Cash paid under provisions recognised in prior periods 16 5
Cash paid relating to advisory and transaction fees and finance costs incurred on the purchase
of Sky Italia and Sky Deutschland - 110
Cash paid relating to the integration of the O2 consumer broadband and fixed-line telephony
business - 3
Payment following termination of an escrow agreement with a current wholesale operator - 3
Adjusted free cash flow 786 1,060
----------------------------------------------------------------------------------------------- ---- ----- -----
Where appropriate amounts above are shown net of applicable
corporation tax.
Net debt
2016 2015
GBPm GBPm
Current borrowings 31 494
Non-current borrowings 8,901 7,418
Borrowings-related derivative financial instruments (577) (378)
Gross debt 8,355 7,534
----------------------------------------------------- ------- -------
Cash and cash equivalents (2,137) (1,378)
Short-term deposits - (1,100)
Net debt 6,218 5,056
----------------------------------------------------- ------- -------
Net debt at 30 June 2016 was GBP6,218 million (2015: GBP5,056
million). Non-cash movements accounted for GBP918 million of the
total increase, predominantly due to a movement in the exchange
rate used to translate euro-denominated debt into sterling from
EUR1.41:GBP1 to EUR1.20:GBP1.
Consolidated income statement - reconciliation of statutory and
adjusted numbers
2016
-------------------------------------------------------------------- ------------------------------------------------
Statutory Adjusting Items Adjusted
Notes GBPm GBPm GBPm
-------------------------------------------------------------------- ------- ---------- ---------------- ---------
Continuing Operations
Revenue
Subscription 10,185 - 10,185
Transactional 197 - 197
Programming and Channel Sales 642 - 642
Advertising 778 - 778
Other 163 - 163
11,965 - 11,965
---------------------------------------------------------------------------- ---------- ---------------- ---------
Operating expense
Programming A (5,217) 54 (5,163)
Direct network costs (939) - (939)
Sales, general and administration B (4,832) 527 (4,305)
(10,988) 581 (10,407)
---------------------------------------------------------------------------- ---------- ---------------- ---------
EBITDA 1,970 208 2,178
----------------------------------------------------------------------------- ---------- ---------------- ---------
Operating profit 977 581 1,558
----------------------------------------------------------------------------- ---------- ---------------- ---------
Share of results of joint ventures
and associates C 2 7 9
Investment income 17 - 17
Finance costs D (244) 6 (238)
Profit before tax 752 594 1,346
----------------------------------------------------------------------------- ---------- ---------------- ---------
Taxation E (89) (180) (269)
Profit for the year from continuing operations 663 414 1,077
----------------------------------------------------------------------------- ---------- ---------------- ---------
Loss attributable to non-controlling interests 3 (3) -
Profit for the year from continuing operations attributable to equity
shareholders of the
parent company 666 411 1,077
----------------------------------------------------------------------------- ---------- ---------------- ---------
Earnings per share from continuing operations (basic) 39.0p 24.1p 63.1p
----------------------------------------------------------------------------- ---------- ---------------- ---------
Notes: explanation of adjusting items for the year ended 30 June
2016
A. Costs of GBP28 million relating to corporate restructuring
and efficiency programmes, costs of GBP18 million relating to the
integration of Sky Deutschland and Sky Italia in the enlarged Group
and costs of GBP8 million relating to the remeasurement of
derivative financial instruments not qualifying for hedge
accounting and hedge ineffectiveness.
B. Advisory and transaction fees of GBP4 million incurred on the
purchase of Sky Deutschland and Sky Italia, costs of GBP114 million
relating to corporate restructuring and efficiency programmes
(including depreciation and amortisation of GBP11 million), costs
of GBP66 million relating to the integration of Sky Deutschland and
Sky Italia in the enlarged Group (including depreciation and
amortisation of GBP19 million), and amortisation of acquired
intangible assets of GBP343 million.
C. Amortisation of acquired intangible assets of GBP7 million.
D. Finance costs of GBP6 million relating to the remeasurement
of all derivative financial instruments not qualifying for hedge
accounting and hedge ineffectiveness.
E. Tax adjusting items and the tax effect of the above items.
Consolidated income statement - reconciliation of statutory and
adjusted numbers
2015
-------------------- ------- ---------------------------------------------------------------------------------
Adjusted
---------------------------------------------------
Germany &
Austria and
Excluding Italy
Statutory Adjusting Items adjusting items pre-acquisition Like for Like
Notes GBPm GBPm GBPm GBPm GBPm
-------------------- ------- ---------- ---------------- ----------------- ---------------- --------------
Continuing
Operations
Revenue
Subscription 8,518 - 8,518 1,179 9,697
Transactional 153 - 153 20 173
Programming and Channel
Sales 541 - 541 9 550
Advertising 649 - 649 67 716
Other 128 - 128 19 147
9,989 - 9,989 1,294 11,283
---------------------------- ---------- ---------------- ----------------- ---------------- --------------
Operating expense
Programming A (4,172) 10 (4,162) (724) (4,886)
Direct network costs (840) - (840) - (840)
Sales, general and
administration B (4,005) 386 (3,619) (538) (4,157)
(9,017) 396 (8,621) (1,262) (9,883)
---------------------------- ---------- ---------------- ----------------- ---------------- --------------
EBITDA 1,738 163 1,901 129 2,030
----------------------------- ---------- ---------------- ----------------- ---------------- --------------
Operating profit 972 396 1,368 32 1,400
----------------------------- ---------- ---------------- ----------------- ---------------- --------------
Share of results of joint
ventures
and associates 28 - 28
Investment income 8 - 8
Finance costs C (283) 75 (208)
Profit on disposal
of
available-for-sale
investments D 492 (492) -
Profit on disposal
of associate E 299 (299) -
Profit before tax 1,516 (320) 1,196
----------------------------- ---------- ---------------- -----------------
Taxation F (184) (67) (251)
Profit for the year from
continuing operations 1,332 (387) 945
Loss attributable to
non-controlling interests 5 (3) 2
Profit for the year from
continuing operations
attributable to equity
shareholders of the
parent company 1,337 (390) 947
----------------------------- ---------- ---------------- -----------------
Earnings per share from
continuing operations
(basic) 79.1p (23.1)p 56.0p
----------------------------- ---------- ---------------- -----------------
Notes: explanation of adjusting items for the year ended 30 June
2015
A. Costs of GBP10 million relating to corporate restructuring and efficiency programmes.
B. Advisory and transaction fees including, inter alia,
financial advisory costs, corporate legal advice, due diligence
reporting, assurance services and tax advice of GBP50 million
incurred on the purchase of Sky Deutschland and Sky Italia, costs
of GBP95 million relating to corporate restructuring and efficiency
programmes (including amortisation of GBP2 million in relation to
associated intangibles), costs of GBP10 million relating to the
integration of Sky Deutschland and Sky Italia in the enlarged
Group, and amortisation of acquired intangible assets of GBP231
million.
C. Finance costs of GBP57 million incurred in connection with
GBP6.6 billion of firm underwritten debt facilities and other
associated transaction costs relating to the purchase of Sky
Deutschland and Sky Italia and costs of GBP18 million relating to
the remeasurement of all derivative financial instruments not
qualifying for hedge accounting and hedge ineffectiveness.
D. Profit on the sale of shareholding in ITV and gain on equity
interest in Sky Deutschland held prior to the acquisition.
E. Profit on disposal of a shareholding of 21% in NGC Network
International LLC and a shareholding of 21% in NGC Network Latin
America LLC.
F. Tax adjusting items and the tax effect of the above items.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR LIFEEDAITFIR
(END) Dow Jones Newswires
July 28, 2016 02:11 ET (06:11 GMT)
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