British Sky Broadcasting Group Plc Announces Results for the Three Months Ended September 30, 1998.

LONDON--(BUSINESS WIRE)--Oct. 30, 1998--British Sky Broadcasting Group plc (NYSE: BSY), the UK-based pay-television broadcasting group, today announced its results for the three months ended September 30, 1998.

HIGHLIGHTS

- SkyDigital launched on October 1, 1998

- 100,400 digital sales of which 65,000 already installed

- Turnover up 9% to 352 million pounds ($600 million)

- Operating profit down 9 million pounds ($15 million) to 71

million pounds ($121 million)

- Profit before tax of 52 million pounds ($89 million) after increased

investment in joint ventures and reduced interest costs

- Earnings per share down from 3.3p to 2.2p (fully taxed 2.5p to

2.1p)

- Net subscribers down 17,000 ahead of the launch of digital

Mark Booth, Chief Executive of British Sky Broadcasting Group plc, said: "The launch of SkyDigital has been a tremendous success. We are comfortably on the way to hitting our target of 200,000 digital subscribers by Christmas. Most importantly, subscribers love the service and find it a true step change from ordinary television. We are delighted."

- US dollar equivalents are provided for reader convenience at the

September 25, 1998 exchange rate of 1 pound = $1.7048.

Financial

In the three months ended September 30, 1998, the Company's operating profits declined 9 million pounds ($15 million) to 71 million pounds ($121 million), as a 28 million pounds ($48 million) increase in revenues was offset by a 37 million pounds ($63 million) increase in costs.

Operating revenues increased during the period by 28 million pounds ($48 million) to 352 million pounds ($600 million), a rise of 9%, with increases in all major revenue categories. Subscription revenues, which account for 84% of revenues increased 8% over the same period last year, with the increase in DTH revenues primarily due to an increase in the average revenue per subscriber. Advertising revenue increased 10% year on year.

Operating costs for the period rose by 37 million pounds ($63 million) or 15% to 281 million pounds ($479 million) with increases in programming and administration costs being offset by a reduction in marketing spend as the company stopped promoting the sale of analogue equipment. The most significant increase was in programming, which saw increases across all major categories due to the rebranding of the channels, new content being secured and a general strengthening of the programming schedules ahead of digital. The increase in administration costs reflects increased activity connected with the digital launch.

Profit before tax of 52 million pounds ($89 million) was 10 million pounds ($17 million) lower than the prior period due principally to the reduced operating profits of 9 million pounds ($15 million) and an increased investment in joint ventures of 2 million pounds ($3 million) being offset by a reduction in interest costs of 1 million pounds ($2 million).

The Company is recognizing the anticipated annual mainstream corporation tax charge on a quarterly basis, which after the partial write back of ACT written off in previous years results in an effective tax rate of 27%.

Distribution

The total number of subscribers at September 30 was 6.88 million, a decrease of 17,000 in the period. Of the total, 6.32 million are UK subscribers and the remaining 0.56 million from Eire. In the UK an increase in cable subscribers of 117,000 was offset by a reduction in DTH subscribers of 143,000. Cable subscribers in Eire rose by 9,000.

The reduction in DTH subscribers was due to a combination of factors. Firstly, a fall in the number of gross DTH analogue sales in the run up to the launch of digital; secondly underlying churn of 15.6% continuing at levels similar to the same period last year; and thirdly a one off reduction of 70,000 subscribers who were on a sports upgrade promotion, not renewing their subscription at the end of the promotion period. This one off reduction has not been included in the churn figure above. For the full year the effect on the churn rate will be 2%.

On October 1, the Company launched SkyDigital, the first digital platform in the UK. Consumer response has been tremendous with over 850,000 requests for Sky information packs. During October there have been 100,400 digital sales of which 65,000 are already installed. Of the total sales, 30,000 are new subscribers. Two further manufacturers, Amstrad and Grundig join Pace in the manufacturing of set top boxes next week. The Company believes that it will achieve its target of at least 200,000 digital subscribers by Christmas.

Other

On October 5, the Company made a recommended offer to acquire Manchester United plc. The transaction has been referred to the Monopolies and Mergers Commission (MMC), and accordingly the offer has lapsed. The MMC is due to report on the transaction by March 12, 1999. The Company does not believe that the transaction raises any competition issue which would be sustained on a detailed examination by the MMC and is confident that the transaction will ultimately be cleared.

On October 13, Granada Group plc sold its 6.5% direct interest in the Company. Following this disposal, Graham Parrott, the Granada representative on the Board, has resigned.

British Sky Broadcasting Group plc is the leading provider of pay-television broadcasting services in the UK and Ireland, with over 6 million paying subscribers. Its operations include the operation and distribution of twelve wholly-owned television channels, as well as direct-to-home marketing of twenty-eight channels owned by third parties.

BSkyB ADRs (each equal to six ordinary shares) trade on the New York Stock Exchange under the symbol BSY. BSkyB ordinary shares are listed on the London Stock Exchange, and can be accessed on Reuters under the symbol BSY.L, and on Quotron and Bloomberg under the symbol BSY. Additional information is available on BSkyB's home page: http://www.sky.co.uk. -0-

BRITISH SKY BROADCASTING GROUP PLC

Consolidated profit and loss account for the three months ended
September 30, 1998


                           1998            1997
                        3 months          3 months         Year
                          ended            ended           ended
                      September 30       September 30  June 30, 1998
                       (unaudited)     (unaudited)      (audited)
             Notes  million(a) million    million        million
                        $     pounds       pounds         pounds

Revenue        1      599.6   351.7        323.4        1,434.1

Operating
expenses, net  2    (479.2) (281.1)      (243.8)      (1,093.5)

Operating
 profit               120.4    70.6         79.6          340.6

Share of
results of
joint ventures 3      (10.2)  (6.0)        (4.5)         (16.5)

Interest
payable, net          (21.5) (12.6)       (13.5)         (53.2)

Profit
before tax             88.7   52.0         61.6          270.9

Taxation              (23.9) (14.0)        (5.6)         (21.7)

Profit
after tax              64.8   38.0         56.0          249.2

Dividends                -      -            -         (103.1)

Retained
profit                 64.8   38.0         56.0          146.1

Earnings
per share -
basic and
fully diluted          3.8c   2.2p         3.3p          14.5p

Earnings
per ADR (b) -
basic and
fully diluted         22.8c    -            -              -

Earnings
per share -
fully taxed
basis                  3.6c    2.1p         2.5p          10.9p

Earnings
per ADR -
fully taxed
basis                  21.6c     -            -              -

Dividend
per share                 -            -            -            6.0p


(a)  US dollar equivalents are provided for reader convenience at the
     September 25, 1998 exchange rate of 1 pound = $1.7048.

(b)  Each ADR represents six ordinary shares

     These accounts do not constitute statutory accounts are
unaudited. The figures for the year ended June 30, 1998 have been
extracted from the accounts of British Sky Broadcasting Group plc on
which the auditors gave an unqualified audit report.
     The accompanying notes are an integral part of this consolidated
profit and loss account.

Notes:

1.    Revenue

     The Group's revenue, while deriving from one class of business,
has been analyzed as follows:

1998 1997

3 months 3 months Year

ended ended ended

September 30 September 30 June 30, 1998

m pounds m pounds m pounds

(unaudited) (unaudited) (audited)

Direct-to-home subscribers 239.1 220.5 967.8 Cable subscribers 56.7 53.9 227.8 Advertising

43.7 39.6 195.0 Other (see note 2) 12.2

9.4 43.5

351.7 323.4 1,434.1

2. Operating expenses, net

1998 1997

3 months 3 months Year

ended ended ended

September 30 September 30 June 30, 1998

m pounds m pounds m pounds

(unaudited) (unaudited) (audited)

Programming (a) 180.9 147.1 687.5 Transmission and related functions (a) 20.9 16.5 69.8 Marketing

30.5 39.7 167.9 Subscriber management 24.3

23.4 92.2 Administration 24.5 17.1 76.1

281.1 243.8 1,093.5

(a) The amounts above are net of 4.1 million pounds (1997/98: 3 months

ended September 30 2.3 million pounds; full year 31.6 million

pounds) receivable from the disposal of programming rights not

acquired for use by the Group, and 9.8m pounds (1997/98: 3 months

ended September 30 7.4 million pounds; full year 32.3 million

pounds) in respect of the provision to third party broadcasters

of spare transponder capacity.

3. Share of results of joint ventures

This relates to the Group's equity share of the operating results of joint ventures.

1998 1997

3 months 3 months Year

ended ended ended

September 30 September 30 June 30, 1998

m pounds m pounds m pounds

(unaudited) (unaudited) (audited)

British Interactive

Broadcasting 2.7 1.8 5.4 Programming

joint ventures 3.3 2.7 11.1

6.0 4.5 16.5 -0-