Sky share price: Broadcaster releases nine-month results
Sky Plc (LON:SKY) has this morning updated investors on its first-quarter performance. Here are the highlights from Sky’s statement with more to follow:
Group revenues grew by 5% to £8,453 million (2014: £8,051 million). UK and Ireland revenues were up 6% to £5,824 million (2014: £5,490 million) and revenues in Germany were up 9% to £1,037 million (2014: £951 million). Revenues in Italy were resilient at £1,592 million (2014: £1,610 million) despite the challenging economic environment.
We saw excellent rates of growth in all of our main revenue streams across the group. Subscription and transactional revenues grew by 5% and 19% respectively reflecting a record trading performance over the past twelve months. We also delivered strong growth in both Advertising (+6%) and Wholesale (+4%) revenues as we continue to benefit from customer demand for our channels and programming.
Subscription revenues were up 5% to £7,280 million as we converted the healthy growth in customers (+947,000) and products (+4.6 million) over the past 12 months into ongoing revenues. Germany delivered the strongest rate of growth, up 10%, whilst the largest absolute revenue growth came from the UK, driven by increases in our customer base and selling more products, with further benefit from our September price rise. Subscription revenues in Italy were up £7 million as we held our customer base flat year on year and increased HD penetration alongside a Multiscreen price rise.
Our fastest rate of growth was in transactional revenues, up 19% to £120 million driven by the early success of Sky Store in the UK which included incremental revenues this year from our Buy & Keep service launched in April 2014.
Wholesale and syndication revenues were up 4% year on year to £406 million driven primarily by the strong performance in the UK due to rate increases under our new Virgin Media and TalkTalk contracts, and excellent growth in Sky Vision following good international demand for Fortitude and the acquisition of Love Productions. Underlying wholesale revenues in Italy were broadly flat year on year (looking through the benefit in the prior year from Champions League resale revenues) while wholesale revenues in Germany were marginally down, as a result of the successful migration of former Deutsche Telekom customers.
Group advertising revenues increased by 6% with Germany delivering very strong growth of 22% through higher sell-out rates and increased inventory around Bundesliga. In the UK, advertising revenues were boosted by the continued strong performance of AdSmart alongside market growth from the pull forward of election marketing spend. Advertising revenues in Italy were up 5% due to the strong performance of our free-to-air channel Cielo.
Jeremy Darroch, Group Chief Executive, commented:
“We have delivered an excellent third quarter as customers across the enlarged Sky group respond to the quality and breadth of what we offer. In all, we attracted almost 70% more new customers than the prior year and over one million new products. By continuing the strong operating momentum of the first half, we have grown revenues by 5% and operating profit by 20% over the nine months.
The UK and Ireland delivered a stand-out performance, reporting both the highest customer growth and lowest churn for eleven years. We took share in broadband and grew strongly in TV as our dual-brand strategy with NOW TV and Sky continues to deliver. At the same time, Germany enjoyed another record quarter of growth and Italy posted its best Q3 customer growth in three years. We’ve also delivered significantly increased customer loyalty in each of our businesses.
“We are particularly excited by our progress in original drama. Fortitude debuted as the most successful drama ever on Sky Atlantic in the UK, 1992 opened as our most successful original scripted series in Italy, while Germany took its first steps in international co-production with 100 Code.
“As these results demonstrate, our teams are working well together right across the new Sky. Five months in, our integration plans are progressing well and we are well positioned for the expanded growth opportunity ahead.”
As of 07:05 BST, Tuesday, 21 April, Sky Plc share price is 1,050.50p.