Sky profits climb by 10%

Sky profits climb by 10%

Hit shows like Game of Thrones and Riviera have helped Sky deliver a 10% rise in first-half earnings, underscoring the appeal of the European pay-TV group to the US media companies trying to buy it, writes Paul Sandle.

The results come two days after the UK’s competition regulatory ruled that Fox’s bid to buy the 61% of Sky it does not already own was not in the public interest.

Rupert Murdoch’s Twenty First Century Fox was provisionally blocked from buying the shares in Sky it does not already own, although there are options that would allow the $15.7bn (€12.7bn) deal to go through.

Sky, whose customer base rose by 365,000 in the half to 22.9m, could then be sold to Disney if a separate sale of Murdoch’s TV and film assets receives the green light.

The British broadcaster reported revenue of £6.7bn (€7.66bn) for the six months to the end of December, up 5%, while core earnings rose to £1.1bn.

“This performance reflects the investment choices we have made in recent years, allowing us to more than offset the pressure on consumer spending across Europe, as more customers continue to choose Sky for more of their services,” chief executive Jeremy Darroch said.

Shares in Sky, which are trading at the highest levels since Fox announced its £10.75-a-share bid in December 2016, were up around 1% at one stage in the latest session in London.

The satellite-company, which operates in Italy, Germany and Austria as well as the UK and Ireland, said it would pay an interim dividend of 13.06p a share, on top of a special dividend of 10p, which UBS analysts said was a positive surprise.

Darroch said that the company’s investment in original programming, such as dramas Riviera and Tin Star, drove viewing figures for Sky’s channels up 6%.

“We have an exceptional line-up of acquired series, and when you add to that our own Sky Originals, it puts us in what I think is the strongest content position we’ve ever had,” he told reporters.

Murdoch, who also owns a string of newspapers in the UK, now has to come up with an arrangement that will prevent him from influencing the news agenda at Sky, for instance by spinning off its Sky News channel.

Darroch said that Sky, along with Fox, was focused on this media ownership hurdle after the competition regulator dismissed concerns about Murdoch’s commitment to broadcasting standards.

- Reuters

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