Stock price rises 5% on news of profit hike
LONDON — Blighty’s biggest paybox, BSkyB, propelled by higher-than-expected takeup of its HD channels, reported a big jump in pre-tax profits for the nine months to the end of March.Pre-tax profits more than doubled from £339 million ($517 million) a year ago to £707 million ($1.078 billion). BSkyB’s London stock price was up by 5% to 626p ($9.5) in morning trading on the news. In the first quarter of the year 428,000 households signed up for Sky+ HD, a 76% year-on-year hike. As the satcaster announced that the much-hyped HD version of Sky News will bow on Blighty’s general election day, May 6, BSkyB revealed it had added 62,000 new subscribers in the three months ending March 31. The paybox is within touching distance of hitting its target of having 10 million customers on board by the end of the year. The total number of subscribers now stands at 9.77 million. For the first time average revenue per user topped £500, growing by 11%. Revenues rose 10% year on year to £4.4 billion ($6.7 billion). CEO Jeremy Darroch hailed the success of the firm’s HD offer. He said: “The business has continued to perform very well in what remains a tough consumer environment. “Today’s results show that our financial performance is accelerating as we move through our investment in broadband and HD.” It remains to be seen if BSkyB can maintain its present impressive momentum in persuading subscribers to trade up to HD. Rival Virgin Media reckons there are big bucks to be had from HD, while Freeview, the U.K. digital terrestrial service, and Freesat, have recently launched their own HD services. However, both these are significantly more modest than BSkyB’s HD service.