Sky PLC, the global satellite broadcaster and communications company, reported this week a 7.5 percent increase in pre-tax profits over the last 12 months. It is the 29th consecutive year that revenue has risen for Sky, amidst a £26bn bidding war between US cable giant Comcast and entertainment colossus Disney. At present, Comcast is leading the race to buy Sky, although the positive set of results from Sky may well up the ante even further.
Sky PLC is 39 percent owned by Twentieth Century Fox, controlled by 87-year-old Australian media mogul Rupert Murdoch. Twentieth Century Fox has agreed to sell all its entertainment assets to Disney, which includes its holdings in Sky.
Sky’s customer base spans Europe, with almost 23 million fee paying subscribers in the UK and Ireland, Austria. Italy and Germany. Sky added new subscribers over the last twelve months, more than half – 270,000 – in the UK and Ireland, where advertising revenue increased by an impressive 6 percent.
Jeremy Darroch, Sky’s chief executive told the BBC: We’ve ended the year strongly with a good set of plans for the year ahead. The opportunity ahead in all of our markets is considerable, so we’re nowhere near the headroom where we’ll naturally run out of growth”
In sport, Darroch said there was strong visibility on 90% of sports rights up to 2021.There were concerns that the growth in streaming sites would damage the effectiveness of the sports coverage. It’s relatively easy to watch boxing with a VPN, or any sporting event which broadcasters like Sky have paid a premium to screen. However, despite the rise in use of peer-to-peer streaming of sports events, it has had little effect on the broadcasters.
Jeremy Darroch the chief executive of Sky plc since December 2007 said of Sky’s 39 percent growth in customer numbers: “Our strong performance reflects the execution of our strategy over an extended period of time, driving sustained growth in revenue, profits and shareholder returns. We do this by providing our customers more of the best content, world class innovation in products and services, combined with industry leading front-line service. Together with an increasingly agile and efficient organisation, we are able to deliver for shareholders whilst ensuring the customer experience is better than anywhere else.”
Sky PLC’s shares are currently trading at £15.13 – about 20p above the most recent offer from Comcast, Market talk is of an imminent improved bid from its rival.