Friday, 26 July 2013

B Sky B - Full Year Results

Further to my write up in March, BSY have today announced full year results for the year to 30th June 2013.

The figures are very impressive - revenues up 7%, profits up 9% and earnings up 18%. As the company has grown, so have profits and dividends for shareholders. In 2004 they paid a dividend of 6p per share, this year it had risen to 30p. That's an impressive CAGR of 19.6% per year.

CEO, Jeremy Darroch
"In our television business, there has been an excellent response from customers to our new services. We've seen an explosion in on-demand and mobile viewing as more people connect their Sky boxes to broadband and watch TV on laptops and mobile devices with Sky Go. Sky Go Extra, our new subscription service, has already attracted more than 150,000 customers in just five months“.

These new services are increasingly popular with customers - Sky Go users have increased 19% to 3.3m, 166,000 of whom are now paying £5 a month for the new subscription service Sky Go Extra
together with a 170% growth in internet-connected Sky+ HD boxes to 2.7 million.

Sky is now installed in over 11m homes in the UK and Ireland offering a comprehensive multi-channel choice of movies, news, entertainment, arts and sport. More and more consumers are choosing to get their phone, TV and broadband services in one package - despite the recent challenge from BT, Sky is still an obvious choice for many. More than 2.7m of these customers  have now connected their Sky+ HD boxes to broadband.
Chris Froome wins 2013 Tour de France

“Overall, we expect accelerating the take-up and usage of new services to have an impact of between £60 million and £70 million on operating profit in 2013/14. The majority of the investment will be in hardware and largely volume-driven. We expect the aggregate effect of investment and higher revenue to be broadly neutral in 2014/15 and to increase our profits in 2015/16 and thereafter”.

Free cash flow has increased to over £1bn this year however net debt levels have also increased from £876m to £1.18bn as a result of share buy backs and rising dividends - something to keep a close eye on.

As is often the case on results day, despite record figures, the share price is down just under 2% at 833p in early trading.

On the back of recent results BSY is increasingly becoming a long term hold in my ISA. As ever, please DYOR.

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