Driven by growth in the UK and Ireland, revenue jumped 5% to £11.3 billion, facilitating a 18% rally in operating profit to £1.4 billion and earnings per share of 53p.
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The company said it had its highest organic growth in the UK and Ireland for 11 years, adding 506,000 customers to take it past the 12 million mark for the first time.
Its customer base in Italy remained stable after three years of negative growth.
Sky’s statutory pre-tax profits, which do not draw a like-for-like comparison, were up 48 per cent at £1.5billion on revenues up 34 per cent at £9.9billion.
“Across the portfolio, we’ve secured a series of big rights deals and made exciting progress in our push into original content”, said Jeremy Darroch, Sky’s group chief executive.
The company said its integration of the Italian and German businesses is proceeding well, and it is on track to hit its target of GBP200 million in run-rate synergies as it exits the financial year 2017.
Average revenue per user, a measure of customers’ monthly bills, was flat in the U.K.at 47 pounds and declined slightly in Germany and Austria to 34 euros from 35 euros last quarter. Sky recorded 721,000 new subscription product sales in the UK/Ireland in Q4, boosted by accelerated growth across TV and broadband. However, this should be bolstered by standout performance in the UK and encouraging signs in Germany. “Noting that the shares had outperformed more than 10% relative over three months, Investec analyst Steve Liechti said that while the figures look more or less in line, “flagged profit growth is not as fast as at 9M given tougher comps/investment”.
The group hailed an “outstanding” performance in the UK and Ireland, where it now has more than 12 million customers.
“It’s clear that the steps we have taken to broaden out our business are paying off”.
“Reduce [rating of shares] retained given increasing competitive pressures in a consolidating European market with cost pressures a drag, though potential Fox bid and positive Ofcom ruling vs BT Openreach are positive catalysts”. The UK’s legacy telco BT now competes with Sky in its pay-TV heartland, Premier League soccer TV coverage. “There’s a good opportunity to potentially expand into new markets [in Europe] and that’s something that we’re thinking about over the coming months”, said Darroch.
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In today’s trading, Sky shares were up one percent at 1,135.00p, as of 08:27 BST.
