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MUMBAI:
UK Pay TV service provider BskyB's net profit for the full
year ended 30 June 2007 has dropped nine per cent to £499
million ($1 billion) due
to the startup cost of a broadband service to compete against
rivals.
Revenue,
though, increased 10 per cent to £4.5 billion. ($9.3 billion) as
it added 1.4 million
direct-to-home (DTH) customers. Annual net customer growth was 406,000 to 8.5
million. The
operating profit was £815 million, including losses of £169 million
from Residential Broadband and £23 million from Easynet Enterprise, and
an exceptional gain of £49 million. BSkyB
CEO James Murdoch said, “This year has been one of enormous importance and
change for us, with the launch of our broadband and talk services transforming
our business and our future prospects fundamentally. This expanded product range
is now attracting new customers to Sky at a very healthy pace, as well as deepening
our relationships with existing customers. “The
team has delivered a strong financial performance whilst building the foundations
for future growth. Continued successful execution of our strategy gives us confidence
that we are well placed to capitalise on the significant opportunities available
to us, and the proposed 27 per cent increase in the full year dividend is a mark
of that confidence.
"Sky
generated growing levels of demand in the 12 months to 30 June 2007, as we continue
our evolution from a single product company into a multi-product business. The
superior choice, quality and value of our products and services, coupled with
the success of our ‘See, Speak, Surf’ marketing campaign, have combined
to attract record customer numbers to our platform. "We
recorded 1,446,000 new DTH customer additions in the year, the highest since analogue
switch-off in 2001, and annual net customer growth of 406,000 leaves us firmly
on track to meet our target of 10 million DTH customers in 2010. One year after
becoming carbon neutral Sky’s leadership on climate change was recognised
with the prestigious Man Group International Climate Change Award at the 2007
Business in the Community Awards. "Our
product range has never been stronger, with more customers choosing more products
from us than ever before. We had record annual product sales of over four million,
an increase of 68 per cent on the prior year. We have also improved the product
mix among our existing base with one in three customers now choosing an additional
product. "Sky+
exceeded its 25 per cent penetration target three years early and we remain on
track to achieve our 30 per cent multiroom penetration target in 2010. Sky HD
added 254,000 customers in the year, the fastest take-up of an additional TV product
that we have seen. The successful launch of Sky Broadband and Sky Talk has played
an important role in generating these levels of demand. "At
the end of the year we recorded 716,000 broadband customers and 526,000 telephony
customers. We have been encouraged by early customer mix, with 71 per cent of
our on-net broadband customers choosing a paid-for product and 93 per cent of
customers connected within 11 working days. Our local loop unbundled (LLU) network
covered 70 per cent of UK households, a full six months ahead of plan. We also
saw the first evidence of our investment in broadband and telephony bringing additional
operational and financial benefits. "
This investment has provided us with a further tool to attract new customers,
with around a third of our fourth quarter broadband customer additions being new
to Sky. Increasing our emphasis on broadband and telephony in acquisition and
retention has enabled us to reduce the use of viewing package discounts. While
this led to a short term increase in churn, it has improved the long-term health
and profitability of our customer base, and contributed to strong Arpu growth.
"We
have seen the benefits of spreading our fixed marketing costs over a larger customer
base, with subscriber acquisition costs (SAC) showing a year-on-year reduction
for the first time in three years." | 
