BSKYB could be an unexpected beneficiary of the pick-up in the housing market, as customers switch television packages when moving home.
The broadcaster, which is due to post a first-quarter trading update on Thursday, is forecast to benefit from the revival in the housing market in the south-east of England.
The launch of the next phase of the UK government’s Help to Buy scheme is also predicted to increase the number of people moving house.
Numis Securities analyst Paul Richards said: “A key time for households to consider their TV and communications providers is when they move house and, accordingly, an increase in housing transactions should be a positive for Sky, given it offers a compelling combination of content, functionality, service and value.
“With the prospect of improving gross domestic product and increased housing transactions, we see scope for an acceleration in customer acquisition, notwithstanding increased competition for broadband and telephony, and lower-tier TV customers.”
But Steve Liechti, an analyst at Investec Securities, downgraded BSkyB from “hold” to “reduce” after warning that the launch of BT Sport would make the competitive environment “tough”.
“First-quarter key performance indicator delivery looks subdued given BT Sport launch noise, despite a relatively easy first-quarter Olympics comparable,” Liechti said.
“We see limited positive catalysts for the first quarter or even this year given new Premier League costs and incremental video-on-demand investment.”
Liechti has trimmed his full-year forecasts for the second time since the last set of results as BSkyB pumps more cash into marketing and buying content.
New programmes this autumn include The Tunnel, the British version of the Danish-Swedish production The Bridge, and further series of Games Of Thrones and Veep.
Numis’s Richards argued that the launch of BT’s sports channels would only have a “limited impact on Sky’s TV business”, although it would slow the rate at which broadband and telephone customers switch to its services.
“Due to BT’s investment in its ‘free’ sports channel to reduce broadband defections to Sky, we forecast a reduction in growth in broadband and telephony,” he said.
Richards thinks BSkyB will have signed up 75,000 broadband customers in its first quarter, down from 102,000 at the same point last year, with the number of telephone customers added dropping to 100,000 from 120,000, and new line rental customers falling to 120,000 from 145,000.
Although he still expects revenues to grow by 6 per cent to £1.8 billion, Richards has pencilled in profits of £279 million, down from £310m.
Profits are expected to have been hit by higher English Premier League costs of £40m, £15m being invested in video-on-demand and £5m spent on integrating Telefonica’s O2 and BE broadband services, which BSkyB bought in March for £180m up-front and a further £20m if customers stay with the service.