Sky posts 14% rise in nine-month earnings

Sky (Frankfurt: 893517 - news) has hailed an "excellent" set of financial results as it grew core earnings by 14% in the financial year-to-date despite the tough consumer environment.

The group, which is Europe's leading entertainment company, and owner of Sky News, said it was on track for full-year plans as like-for-like revenues rose 5% to £10.1bn in the nine months to 31 March.

Customer numbers were up by 38,000 in the third quarter, including a 70,000 rise in the UK but a decline of 30,000 in Germany and Austria as the group scales back discounts in favour of higher value customers. There was a fall of 2,000 in Italy.

Over the last year, customer numbers were up by 480,000 to 22.9 million.

The results come as Sky awaits the final outcome of an investigation by UK competition regulators into plans by largest shareholder 21st Century Fox to buy the remainder of the company it does not already own.

Meanwhile, Sky has recently been boosted by the latest extension of its agreement to show Premier League games to 2022 - in a deal which will see it allowed to screen more games at a lower cost.

Chief (Taiwan OTC: 3345.TWO - news) executive Jeremy Darroch said: "It's been a good quarter for Sky. We've delivered excellent financial results."

Earnings before interest, taxation, depreciation and amortisation (EBITDA) in Sky's established markets climbed 14% to £1.8bn compared with the same nine-month period last year.

It comes at a time when all customer-facing businesses are trying to meet the challenge of pressures on household budgets.

Mr Darroch said: "Against the backdrop of a challenging consumer environment, this performance reflects the continual improvement in our broad set of products and services and our focus on providing great value every single day."

He said Sky's customers were now taking more than 62 million individual subscription products from the company with its service reaching more than 120 million people across Europe.

Meanwhile, the Sky Q multiscreen service is now used in 2.5 million homes across the UK, Ireland (Other OTC: IRLD - news) and Italy - and will launch in Germany and Austria in two weeks.

That is part of what Mr Darroch called the "ongoing transformation" of the business which also includes the roll-out of so-called over-the-top (OTT) services streamed over the internet rather than through the use of a satellite dish.

In addition, Sky has agreed partnerships with Netflix (Xetra: 552484 - news) and Spotify.

Original dramas are also an increasing focus, with Save Me starring Lennie James and Suranne Jones, which saw over a million people download all six episodes in the first week.

Mr Darroch said: "Looking ahead, we have the right strategy and abilities in place to provide customers with the best content, products and service.

"Whilst we expect the consumer environment to remain challenging, the business is in good shape and we remain on track for the full year."