In only its second report since it consolidated its operations in the UK, Germany and Italy to create Europe’s biggest pay TV platform, Sky reported increased earnings as television subscriber growth and demand for products such as broadband in the UK and Germany drove revenue for the pan-Euro giant.
Shares in Sky at one point rose almost 5% in early trading on the FTSE 100 as the company posted a 20% jump in nine-month profit from the same period the previous year and recorded its best third quarter subscriber growth in over a decade. Total revenues across its European businesses for the nine months rose 5% to $12.6 billion.
Sky said operating profit before exceptional items in the nine months ended March 31 jumped 20% year-over-year to £1.03 billion ($1.54 billion). Revenue from operations in the U.K. and Ireland climbed 6%. In Germany, it increased 9%. Revenue in Italy dropped 1%, but did produce its best third quarter performance for three years.
“The UK and Ireland delivered a stand-out performance, reporting both the highest customer growth and lowest churn for 11 years,” said Sky chief exec Jeremy Darroch. “We took share in broadband and grew strongly in TV as our dual-brand strategy with Now TV and Sky continues to deliver.”
Darroch added that Sky would be spending almost $7 billion on new original content in the coming. Sky has already shown its appetite to increase its homegrown production with an enhanced output deal with HBO that includes a co-development and co-production element, as well as co-financing the likes of Fortitude, with a reported $40 million budget.
Sky Creates Euro Giant; What Next For Rupert Murdoch?
The U.K.’s market-leading pay-television operator said it added 242,000 new customers in the third quarter, up 70% year-over-year. The number of products its existing customers use, including broadband Internet and high-definition TV, jumped by more than one million, up from a rise of 764,000.
Sky, previously known as BSkyB, has finally completed its acquisition of Sky Italia and majority interest in Sky Deutschland to create a European TV giant in a deal worth nearly $11 billion in November last year. Rupert Murdoch, through 21st Century Fox, owns a 39% stake in the company.
Subscribe to Deadline Breaking News Alerts and keep your inbox happy.