Profits leap for BSkyB

Oct 24 2009 by Iain Laing, The Journal

BROADCASTER BSkyB has reported a 40% leap in first-quarter profits as it said strong demand from new customers for high-definition viewing helped offset higher numbers of customers quitting the group.

The broadcasting giant reported pre-tax profits of £180m up from £129m a year earlier. It also posted better-than-expected net customer additions – those joining the group less those leaving – of 94,000 in the three months to September 30.

But its rate of customer churn, measuring customers leaving Sky, rose to 11.3% from 9.9% in the previous quarter after it hiked direct-to-home subscriptions and was more cautious about customers in arrears.

It also said moves to switch seven million viewing cards as part of routine security efforts had affected customer retention.

Sky said the card switch-over prompted some customers to reconsider their options and quit the service.

It reported another 287,000 Sky +HD net customers joining the group in the quarter, up threefold on a year ago as it continued to benefit from slashing the cost of an HD box from £150 to £49 earlier this year. Marketing costs rose by £37m to £245m, reflecting the investment in HD.