The shares of Sky (LSE: BSY) (NASDAQOTH: BSYBY.US) added 39p to 883p during early trade this morning as revenue rose 8% for the six months ended 31 December. This is attributed to sales of its paid-for subscriptions surging 42%.
The FTSE 100 member now has over five million broadband customers, with 33 million users of its paid-for products in total. This includes the streaming service Now TV, which contributed to a threefold increase in on-demand use.
Profit figures, however, were disappointing. Pre-tax profits fell from £610 million to £554 million, largely attributable to the cost of Premier League television rights and competition from BT Sport.
Furthermore, the company unveiled a new content deal with HBO lasting until 2020, as well as announcing extensions to broadcast rights agreements covering cricket, football and pro-wresting.
Jeremy Darroch, the Chief Executive, commented with the following:
“We had a very good first six months of the year as we reaped the benefits of our broader-based approach to growth. In a consumer environment that remains challenging, customers continued to choose to take Sky products in ever greater numbers in the run-up to Christmas, with Q2 growth up by over 40% on last year. In the last 12 months, we have added 3.8 million paid-for subscription products, the fastest rate of annual growth in three years.”
Prior to today, City experts were expecting Sky’s upcoming annual results to show earnings of 65p per share. Following today’s price movement the shares may therefore trade on a P/E of 14 and offer a potential income of just under 4%.
The decision to ‘buy’ — based on those ratings, today’s results and the wider prospects for the media sector — is solely your decision.
