LONDON — BSkyB, Blighty’s dominant pay TV provider, saw its stock price surge as six-monthly figures showed a 30% hike in half-year profits, boosted by the growing popularity of its high definition offer.
The satcaster made a pre-tax profit of £358 million ($582 million) in the six months to Dec. 31, compared with £276 million ($449 million) a year before.
Revenue rose 10% year on year to £2.9 billion ($4.7 billion) as BSkyB moved to within a whisker of reaching its target of having 10 million U.K. households signed up by the end of the year.
The paybox said that after adding 172,000 new customers net in the three months to the end of December it now had 9.7 million subscribers.
In the same period, the satcaster added 482,000 households to its HD service, an impressive 156% year-on-year hike taking the total number of HD households to 2.08 million.
BSkyB’s stock price rose by 13.5 pence (22 cents), or 2.44%, to 567.5 pence ($9.16) by 8.45 a.m. on the back of the boffo perf. It later fell back to 557.50p ($9).
CEO Jeremy Darroch said: “It has been another good quarter in what remains a tough environment, with more customers joining Sky and strong demand across our entire product range.”
Despite the recession-defying results, BSkyB faces two big challenges in the coming months.
Regulator Ofcom looks poised to force the paybox to retail its premium sports and movie channels to rivals such as Virgin Media at cheaper rates.
Darroch said that the company’s business model was robust enough to take whatever course of action the watchdog announces.
“We anticipate we will hear from Ofcom at the end of March,” Darroch said. “We intend to stay focused on the market place … whatever comes our way we will be in good shape. Until Ofcom concludes the review it is all just talk.”
Another cloud on the horizon is BSkyB’s stake in local terrestrial web ITV, which the Court of Appeal last week ordered must be reduced from 17.9% to less than 7.5%.
Unless the company wins another appeal, a sale at ITV’s current stock price would lead to a loss of in the region of £500 million ($807 million).
Darroch said that BSkyB was still “working on its position” regarding a possible further appeal.