Increasing demand sees profits at BSkyB rise by 75 percent

With a marked increase in the purchase of telecoms and broadband packages along with a greater demand for high definition TV services, British Sky Broadcasting, the UK based satellite group has recently reported an increase in its net profits for the first quarter of 75 percent.

The quarter ending on 30th September saw a growth in revenue to £1.38 billion or 10.5 percent whilst its net profits for this period increased from £78 million to £128 million ($213 million) according to the report from the group.

An impairment charge of £24 million taken around a year ago on its ITV investment and lower net interest charges have seriously helped BSkyB in increasing its profits. Also, the consensus forecast of its operational profits of £193 million was exceeded with an increase of 9 percent to £198 million, excluding one-off charges that were made.

Healthy gains made in the European market also saw an increase in the group’s shares of 9 percent in London.

In the recent quarter BSkyB saw an increase in its customer base of 9.54 million with an extra 94 000 new customers having now joined the network operator.

The number of subscribers to HD television services has also seen a very strong rise with 1.6 million users now making use of the service following a net increase of 287 000 to the service.

Even with the costs that are associated with strong additions to a subscriber base the television unit has still been able to maintain good levels of profitability, which has led to these strong results according to analyst at Deutsche Bank.

In a recent note a broker from Deutsche Bank advised “So Sky is securing future revenue growth without near-term profit hit,” the broker said in a note to clients. While only the first quarter, and hence unlikely to drive changes to estimates, we see these figures as a sound start to the year.”

Source – Market Watch