SHARES in Rupert Murdoch’s Sky soared to 14-year highs yesterday as the satellite broadcaster posted a one-fifth jump in profits after its UK business made the best start to a calendar year for more than a decade.
The stock rose 53p to 1,105p, a gain of 5 per cent. The last time the shares were above this level was in the dotcom boom/bust of 2000, when they peaked at 2,168p in March of that year.
Including Sky Germany and Sky Italia, where Murdoch engineered full takeovers by Sky last year, group revenues climbed 5 per cent to £8.5 billion over the nine month period, while profits jumped to £1.02bn – busting the nine-monthly £1bn barrier for the first time – from £854m.
Sky, formerly known as BSkyB, added 242,000 customers in the three months to end-March 2015, up almost 70 per cent to 20.8 million.
The Q3 performance included the company’s best UK and Ireland showing for the period in 11 years with customer growth of 127,000, 41 per cent up on the prior year. The company also had its best Q3 performance in Italy in three years.
Sky grew the sale of paid-for subscription products by one million to take total product sales to 3.8 million for the first nine months of its financial year.
Sky’s UK operation achieved the largest share of group operating profit after growing 14 per cent to more than £1bn.
Losses in Germany reduced £43m following strong subscriber revenue growth, while profits in Italy rose £5m to £45m despite economic headwinds.
Group operating costs grew 3 per cent to £7.4bn, reflecting the impact of programming such as the Cricket World Cup. Shows include the HBO hit Game of Thrones and Sky Atlantic’s original drama Fortitude.
Sky chief executive Jeremy Darroch said: “The UK and Ireland delivered a stand-out performance, reporting both the highest customer growth and lowest churn for 11 years.
“We took share in broadband and grew strongly in TV as our dual-brand strategy with NOW TV and Sky continues to deliver.”
Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said the “encouraging numbers underlines Sky’s determination to position itself as a major European force within the media sector”.
Hunter added that Sky continued to benefit from original and acquired content, “whilst its presence as a sporting powerhouse was consolidated after the recent Premier League rights auction, albeit at a high price”.
He said the strong UK and Irish performance was particularly welcome as those markets contributed “the lion’s share” of Sky’s business.