Sky steams on in Q3, breaking £10BN revs barrier and generating £1.1BN profit | Pay-TV | News | Rapid TV News
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Proving yet again why the likes of 21st Century Fox and Comcast are lodging huge bids to bring it under their full control, the Sky money truck has rolled on during its third quarter of the year.

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For the nine-month period ended 31 March 2018, the European pay-TV giant posted revenues of £10.144 billion, up 5% on a like-for-like basis compared to the same period of 2017, reporting good growth in all territories — that is the UK and Ireland, Germany and Austria and Italy — and all categories. Direct-to-consumer revenue grew by £297 million to £8.851 billion, the result, Sky said, of continued customer and product growth, a higher number of pay-as-you-go buys, a home communications price rise in the UK in March 2017 and a TV price rise in Italy.

As it began its monetisation of its investment in original programming, Sky saw content revenue at the end of the third quarter grow 17% to £617 million. The company said advertising revenue outperformed the estimated market growth rate in each of its territories, delivering overall growth of 9% to £676 million. In Italy as well as Germany and Austria there was double-digit growth.

Sky also reported good news in the period as regards cost efficiency. At the end of Q3 2018, adjusted total costs grew 3% to £9.017 billion, well below the rate of revenue growth, the company stressed. Programming costs grew by 4% to £4.826 billion, including a £116 million step up in the new Bundesliga contract, increased Sky original drama investment across the group, and the growth of Sky 1 in Germany and its relaunch in the UK. This was partly offset by the change to sports rights amortisation approach in the UK. Sales, general and administrative costs were flat in absolute terms at £3.338 billion.

This all resulted in healthy profits. Established business Q3 EBITDA grew annually by 14% to £1.777 billion, up 10% after including the net costs of investing in two new lines of business, Sky Mobile and an over-the-top (OTT) service in Spain. After depreciation and amortisation of £566 million, EBIT was up 11% on a yearly basis to £1.127 billion.

Territorially, the stand-out region was the UK and Ireland which at 31 March 2018 had just under 13 million customers, adding 70,000 new customers in the quarter, 75% higher than in the prior year.

UK and Ireland revenues increased by 4% to £6.668 million driven by customer growth of 285,000 over the last year with notable growth in products, particularly Sky Mobile and Sky Q multiscreen. It also saw growth in content revenues which, said the company, reflected successful investments in original programming. Advertising revenues were up 3%.

Commenting on the results, Sky group chief executive Jeremy Darroch said: “Against the back drop 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 - something recognised by customers now taking over 62 million subscription products from us and our services reaching over 120 million people across Europe ... 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.”