Shares in British Sky Broadcasting Group (LSE: BSY) dipped this morning, down 3% in early trade, despite posting record financial results for the twelve months ending 30 June 2013.
Revenue lifted 7% year on year, to £7,235m, while operating profit on an adjusted basis jumped 9% to £1,330m (up 4% on a reported basis to £1,291m).
Basic earnings per share rose a healthy 18% to 60p. As a result, the full-year dividend increased by the same percentage, to 30p per share, representing the ninth consecutive year of growth. Management also revealed plans to return £500m to shareholders through a share-buyback programme.
Elsewhere in the company’s record results, over three million new paid-for subscription products were added, for a total of 31.6 million. The new services are “resonating strongly with customers”, with a whopping 170% increase in internet-connected Sky+HD boxes over the year, bringing the current total to 2.7 million, and a fivefold increase in On Demand downloads, 19% increase in Sky Go users and 200% growth in Sky Store video rentals.
Chief executive Jeremy Darroch commented:
“The strength of our financial performance is a result of our successful transition to more broadly-based growth and sustained investment to create a better service and wider range of products for customers.
“We expect the consumer environment to remain challenging over the coming twelve months. Against that backdrop, we have a strong set of plans that will extend our leadership in core areas – on screen, in home communications and in front-line service delivery; accelerate growth in new services; and improve efficiency to build a bigger, more profitable business for shareholders.”
Despite the well-publicised competition from BT‘s fresh sports offerings, management at Sky believe they have a strong set of plans for the forthcoming year, including building upon their leadership in “a new slate of original British drama and Sky Sports”, “best quality and value in broadband” and its “advantage in customer service”. It expects to see volume-driven impact of £60m to £70m on operating profit with rapid returns from accelerated take-up and usage of new services in 2013/14.
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> Sam does not own shares in British Sky Broadcasting.