BSkyB has admitted that it has so far spent £2m in less than four months on "advisory fees" relating to News Corporation's bid to take full ownership, as the company beat forecasts for the number of new subscribers.
The satellite TV group added 96,000 net new customers in the three months to the end of September to take its total customer base to 9.956m, easily beating analyst consensus figures which averaged at 76,000. BSkyB added 178,000 broadband subscribers, taking total numbers to 2.8m, and 203,000 telephony customers to 2.5m. Uptake was the highest quarterly growth rate recorded in two years.
Revenues met expectations, rising 15% to £1.5bn, while adjusted operating profit rose 25% year on year to £255m.
The company, which bucked the downturn to announce it is creating 500 new jobs through the opening of a new call centre, added 215,000 new HD customers, taking the total of Sky households with the service to 3.15m.
"Today's results show that our consistent strategy is delivering an excellent performance in a challenging environment," said the BSkyB chief executive, Jeremy Darroch. "Strong top-line growth is converting to accelerating profit and earnings."
The company said it has seen its highest ever combined takeup of broadband, telephony and line rental, with 36% quarter-on-quarter growth. Some 2.3m customers now take a "triple play" package of TV, broadband and telephony.
Darroch shed little light on the progress of News Corp's plan to take full control of BSkyB, which is awaiting Rupert Murdoch's formal notification that he intends to acquire the remaining 61% stake; other than that it is "business as usual".
"There is no offer today, we have a proposal," he said. "In the near term News Corp are due to file formal notification to the European Commission. That will kick off a regulatory process."
Average revenue per user, a key metric watched by analysts, grew from £469 to £514 year on year.
Total advertising increased by 46% year on year to, primarily thanks to the injection of income from Living TV Group, home of pay-TV channels including Bravo, which the company acquired from Virgin Media earlier this year. Excluding Living TV Group ad revenues were up 17% year on year. BSkyB reckons that the TV ad market has grown 15.2% year on year in the third quarter.
Living TV Group contributed £27m in revenue in the quarter. Of this total, £20m was from advertising, £6m from wholesale deals and £1m in "other revenue". However, Living TV Group had costs of £23m, made up of £13m from programming, £1m from marketing, £4m from administration and £5m from transmission, technology and fixed networks. Restructuring costs, primarily from a redundancy process, were £5m.
Programming costs increased by 10% year on year in the quarter to £482m due to increased investment in sport and entertainment. Marketing costs increased significantly some £58m, or 23% year on year, to £302m.
Darroch said that the strong performance of products such as broadband was primarily due to a shift in focus of marketing activity during the quarter from pushing HD to home communications services. BSkyB also pointed out that a landmark moment will occur this year when the number of HD-ready households exceed standard definition homes in the UK. "HD is now established; it is the future of video consumption on the home," he said.
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