British Sky Broadcasting Group plc Results for the Quarter Ended September 30, 2000.Business Editors LONDON--(BUSINESS WIRE)--Nov. 3, 2000 5 million subscriber subscriber, n the person, usually the employee, who represents the family unit in relation to the prepayment plan. Other family members are dependents. Also called certificate holders or enrollees. target to be achieved ahead of schedule 4.95 million sales to date British Sky Broadcasting British Sky Broadcasting (BSkyB — formerly two companies, Sky Television and BSB) is a company that operates Sky Digital, a subscription television service in the UK and the Republic of Ireland. It produces TV content, and owns several TV channels. Group plc (NYSE NYSE See: New York Stock Exchange : BSY BSY Busy BSY British School of Yoga BSY Bit Sync BSY Busy Line ), the UK-based pay-television broadcasting group, today announced its results for the three months ended September September: see month. 30, 2000.
HIGHLIGHTS
-- 4.95 million DTH sales as at November 2
-- Record Q1 net DTH growth of 210,000
-- Sky audience share up 19% across all UK television homes
-- Revenues up 33% to (pound)520 million ($765 million)
-- EBITDA before joint ventures increases to (pound)49 million
($72 million)
-- Over 1,000 hours of interactive sports programming shown to
date
Tony Ball, Chief Executive of British Sky Broadcasting Group plc, said: "Reaching our 5 million target ahead of schedule is a fantastic achievement. We are confident that we are on course to achieve our target of 7 million subscribers by the end of 2003. More people switching to digital choose Sky: it is the only place to get the great choice, dynamic interactivity and t-commerce T-commerce or television commerce is e-commerce undertaken using digital television. It has yet to become as widespread as e-commerce on the Internet. See also
In the last year we added more than a million DTH (Direct-To-Home) Typically refers to satellite TV broadcasting directly to a dish antenna on the roof of a house. See DBS. subscribers with growth in the last quarter at record levels. And as people switch to Sky digital, our low churn churn: see butter. level shows they are staying with us." A conference call for analysts will be held at 3.00 p.m. (GMT (Greenwich Mean Time) See UTC. GMT - Universal Time 1 ) / 10.00 a.m. (EST EST electroshock therapy. EST abbr. electroshock therapy ) today. To register for this, please contact Emma Kent at Bell Pottinger Pottinger may refer to:
 r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). ) or
David Chang Chang (chăng) or Yangtze (yăng`sē`, yäng`dzŭ`), Mandarin Chang Jiang, longest river of China and of Asia, c.3,880 mi (6,245 km) long, rising in the Tibetan highlands, SW Qinghai prov. at Taylor Taylor, city (1990 pop. 70,811), Wayne co., SE Mich., a suburb of Detroit adjacent to Dearborn; founded 1847 as a township, inc. as a city 1968. A small rural village until World War II, it developed significantly in the second half of the 20th cent. Rafferty Rafferty or Rafferty's rulesNoun, pl Austral & NZ slang no rules at all [origin unknown] on +1 212 889 4350 (US & Asia). Further information at www.sky.com/corporate Operating review The total number of subscribers to Sky channels at September 30, 2000 was 9,238,000, an increase of 250,000 in the three months to September 30, 2000 (`the period'). Of the total subscribers, 8,621,000 were in the UK, and 617,000 in Eire. The number of DTH subscribers at September 30, 2000 was 4,723,000 of which 4,083,000 (86%) were digital subscribers. The net DTH subscriber growth in the period was 210,000 compared with 122,000 in the three months to September 30, 1999 (`the comparable period'), an increase of 72%. This represents record first-quarter net growth in DTH subscribers since 1993. As at November November: see month. 2, 2000 sales to date were 4,953,000. This means that Sky will achieve its year end target of 5 million subscribers almost two months ahead of schedule. DTH churn for the period was 9.8% per annum Per annum Yearly. compared to 14.2% per annum in the comparable period. The continuing low rate of churn amongst the larger number of digital subscribers more than offset higher churn within the much smaller, declining, analogue (electronics) analogue - (US: "analog") A description of a continuously variable signal or a circuit or device designed to handle such signals. The opposite is "discrete" or "digital". subscriber base. The number of cable subscribers to Sky channels at September 30, 2000 was 3,052,000, a reduction of 273,000 on the comparable period. On September 6, 2000 the company announced a program supply deal with NTL NTL Nevertheless NTL National Transportation Library NTL Norsk Tjenestemannslag NTL National Training Laboratories NTL Never Too Late NTL Nothing to Lose NTL National Training Laboratory NTL None the Less NTL Number Theory Library Inc. designed to increase both the penetration of Sky's channels and the viewing choices of NTL customers. The deal, which is subject to regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. approval, will also result in increasing guaranteed revenue streams to Sky. Further details of subscribers are included in Appendix 1. Sky's share of viewing in all UK television homes rose 19% in the period to 5.7% from 4.8% for the comparable period. For the first time ever Sky's share of viewing within Sky digital homes has now overtaken that of ITV (1) See interactive TV. (2) (iTV) The code name for Apple's video media hub (see Apple TV). . ITV's share of viewing in Sky digital homes during the period was 17.3% compared to 20.4% in all multichannel Using two or more paths for transmission or processing. It can refer to a variety of architectures including (1) multiple I/O channels between the CPU and peripheral devices, (2) multiple wires in a cable, (3) multiple "logical" channels within a single wire or fiber or (4) multiple homes and 27.9% in all UK homes. Sky's own share of viewing within Sky digital homes averaged 19.0% for the period. (Source: SPC/BARB). The decline in ITV's share of viewing across all UK homes to 27.9% in the period from 30.3% for the comparable period was due in part to its absence from the digital satellite platform. Financial review The company's earnings before interest, tax, depreciation and amortization (`EBITDA') and before joint ventures and exceptional items for the three months ended September 30, 2000 increased by 31% to (pound)49 million ($72 million) from (pound)37 million ($54 million) in the comparable period. The full financial results for the period are set out in Appendix 2. Revenues increased by 33% to (pound)520 million ($765 million) for the three months to September 30, 2000, from (pound)391 million ($575 million) for the comparable period. There were strong increases in all segments except cable revenues which declined by 3% against the comparable period due to the lower number of cable subscribers. DTH subscription revenues increased to (pound)347 million ($510 million), a (pound)98 million ($143 million) (39%) increase on the comparable period. This was a result of the 32% increase in the average number of subscribers and a 7% increase in the average revenue per subscriber per annum to (pound)286 ($420) (1999/00: (pound)268 ($394)) due to higher pay per view revenues from digital subscribers. The recently- announced price rise effective from January January: see month. 1, 2001, the first for eighteen months, is expected to increase the average revenue per subscriber in the second half of the current financial year. Advertising revenue for the quarter was (pound)57 million ($84 million), an increase of 11% on the comparable period. Operating expenditure before goodwill for the period rose by (pound)120 million ($176 million) to (pound)484 million ($712 million). Marketing costs increased by (pound)28 million ($42 million) to (pound)104 million ($153 million) due to higher digital additions in the period. The cost of programming increased by (pound)60 million ($88 million) against the comparable period to (pound)251 million ($369 million) due mostly to the higher number of subscribers. New Media and Open.... New media revenues of (pound)16 million ($24 million), separately identified for the first time this period, were driven primarily by internet and telephone betting revenues from the business of Sports Internet Group, which was acquired in July July: see month. 2000. This revenue stream is expected to grow further once interactive television betting is launched later this calendar year. The development of Open continued during the period. Open continued to experience an encouraging level of usage and the number of brand partners increased to over 75. A first class management team is now in place with the appointment of BSkyB's Jon JON Jonah JON Jesus of Nazareth JON Job Order Number JON Johnston Island, US, Outlying Islands (Airport Code) Florsheim Flörsheim (or Flörsheim am Main) is a town in Hesse, Germany. Florsheim can also mean:
The company has recognized its (pound)13 million ($19 million) share of Open's operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. for the period within its share of operating results of joint ventures (1999/00: (pound)20 million ($29 million)). The results of Open will be fully consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: as a subsidiary on completion of the transaction. Goodwill of (pound)5 million ($8 million) included in operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. for the first time is the amortization of the (pound)265 million ($390 million) provisional Temporary; not permanent. Tentative, contingent, preliminary. A provisional civil service appointment is a temporary position that fills a vacancy until a test can be properly administered and statutory requirements can be fulfilled to make a permanent appointment. goodwill arising on the acquisition of Sports Internet Group. Sky Ventures The company's loss from the Sky Ventures portfolio of investments reduced to (pound)2.7 million ($4.0 million) for the period, a reduction of 7% on the comparable period. The market value of the company's 36% of Music Choice Europe, which listed in October October: see month. 2000 was (pound)79 million ($116 million) at the close of trading on November 2, 2000. KirchPayTV The company's share of KirchPayTV losses for the period was(pound)22 million ($32 million) (1999/00: nil). On August 31, 2000 KirchPayTV disposed dis·pose v. dis·posed, dis·pos·ing, dis·pos·es v.tr. 1. To place or set in a particular order; arrange. 2. of their remaining holding of BSkyB BSkyB British Sky Broadcasting shares via an institutional placing. Under UK GAAP UK GAAP United Kingdom Generally Accepted Accounting Principles , a non-cash accounting loss arises on the sale of these shares of which the company's share is (pound)69.5 million ($102 million). This has been treated as an exceptional item. The joint venture goodwill of (pound)17 million ($25 million) is principally the amortization of the provisional (pound)1.4 billion ($2.0 billion) of goodwill arising on the acquisition of the interest in KirchPayTV, which is being amortized over 20 years. As the result of the disposal of its BSkyB shares and of subsequent investments by Kingdom Holdings, Capital Research and Management Company and Lehman Brothers Lehman Brothers Holdings Inc. (NYSE: LEH), founded in 1850, is a diversified, global financial services firm. It is a participant in investment banking, equity and fixed income sales, research and trading, investment management, private equity, and private banking. Merchant Banking II L.P., the KirchPayTV business is now well capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. and able to plan for its long term success in Europe's largest television market. Following the completion of these transactions, BSkyB's holding in KirchPayTV will be 22%. Net debt Net debt increased to(pound)1,437 million ($2,113 million) at September 30, 2000, up from (pound)1,145 million ($1,683 million) at June June: see month. 30, 2000. This was due to increases in working capital related to the timing of payments to sports bodies, (pound)43 million ($63 million) spent on transitioning analogue subscribers, (pound)35 million ($51 million) of funding to Open, (pound)20 million ($29 million) capital expenditure and (pound)45 million ($66 million) of net interest paid. -0-
Appendix 1
Subscribers to Sky Channels
Q1 2000 Q4 2000 Q1 2001
As at 9/30/99 As at 6/30/00 As at 9/30/00
------------- ------------- -------------
DTH
Digital 1,279,000 3,583,000 4,083,000
Analogue 2,303,000 930,000 640,000
--------- --------- ---------
Total DTH 3,582,000 4,513,000 4,723,000
Cable 3,325,000 3,122,000 3,052,000
DTT 363,000 740,000 846,000
--------- --------- ---------
Total UK 7,270,000 8,375,000 8,621,000
Eire 591,000 613,000 617,000
--------- --------- ---------
Total UK & Eire 7,861,000 8,988,000 9,238,000
DTH Churn
rate for quarter 14.2% 10.5% 9.8%
(annualized)
BRITISH SKY BROADCASTING GROUP PLC
Consolidated profit and loss account for the three months ended 30
September 2000 (pound)m (except for per share data)
2000 1999 2000
3 months 3 months Year
ended ended ended
Sept. 30 Sept. 30 June 30
(unaudited) (unaudited) (audited)
------------------- ---------- ---------
Notes $ (pound) (pound) (pound)
million(1) million million million
Revenue: Group ---------- ------- ------- --------
and share of
joint ventures 828.5 563.6 401.4 1,934.7
Less: share of joint
ventures' revenue (63.6) (43.3) (10.3) (87.7)
Revenue 1 764.9 520.3 391.1 1,847.0
Operating
expenses, net 2 (711.7) (484.1) (364.6) (1,761.7)
Operating profit
before goodwill
and
exceptional items 53.2 36.2 26.5 85.3
Goodwill and
exceptional
operating items 2 (7.9) (5.4) - (105.0)
Operating
profit (loss) 45.3 30.8 26.5 (19.7)
Share of operating
results of
joint ventures 3 (54.8) (37.3) (22.4) (121.3)
Joint ventures'
goodwill
amortisation (24.7) (16.8) - (14.4)
Loss on sale
of fixed
asset investments - - - (1.4)
Share of joint
venture's
exceptional loss
on sale of fixed
asset investment (102.2) (69.5) - (14.0)
Interest payable, net (45.3) (30.8) (17.7) (91.9)
Loss before tax (181.7) (123.6) (13.6) (262.7)
Taxation 0.3 0.2 1.5 (8.8)
Retained loss (181.4) (123.4) (12.1) (271.5)
Loss per share
(before goodwill
and
exceptional items) (2.5c) (1.7p) (0.7p) (8.7p)
Loss per ADR (2) (15.0c)
Loss per share
(after goodwill
and
exceptional items) (9.8c) (6.7p) (0.7p) (15.6p)
Loss per ADR (2) (58.8c)
EBITDA (before
exceptional
items and
joint ventures) 71.9 48.9 37.3 137.2
(1) US dollar equivalents are provided for reader convenience only at
the September 29, 2000 exchange rate of (pound)1 = $1.4701.
(2) Each ADR represents six ordinary shares
These accounts do not constitute statutory accounts and are
unaudited.
The accompanying notes are an integral part of this consolidated
profit and loss account.
Notes:
1. Revenue
The Group's revenue, whilst deriving from one class of business,
has been analyzed as follows:
2000 1999 2000
3 months 3 months Year
ended ended ended
September 30 September 30 June 30
(pound)m (pound)m (pound)m
(unaudited) (unaudited) (audited)
------------- ------------ ----------
Direct-to-home subscribers 347.2 249.7 1,189.0
Cable and DTT subscribers 72.8 68.6 303.0
Advertising 56.8 51.0 242.3
New media(1) 16.3 - 4.6
Other 27.2 21.8 108.1
520.3 391.1 1,847.0
(1) New media includes income from internet, e-commerce, betting,
telephony and text services.
2. Operating expenses, net
2000 1999 2000
3 months 3 months Year
ended ended ended
September 30 September 30 June 30
(pound)m (pound)m (pound)m
(unaudited) (unaudited) (audited)
------------ ------------ ----------
Programming (2) 251.0 191.2 935.2
Transmission and
related functions (2) 28.2 25.0 105.2
Marketing 104.1 75.3 381.3
Subscriber management 46.3 45.4 199.9
Administration 39.6 25.9 129.7
New media 14.9 1.8 10.4
484.1 364.6 1,761.7
Exceptional operating
items and goodwill 5.4(3) - 105.0
489.5 364.6 1,866.7
(2) The amounts above are net of (pound)1.5 million (1999/00: 3 months
ended September 30 (pound)4.3 million; full year (pound)51.3
million) receivable from the disposal of programming rights not
acquired for use by the Group, and (pound)14.2 million (1999/00: 3
months ended September 30 (pound)15.0 million; full year
(pound)61.3 million) in respect of the provision to third party
broadcasters of spare transponder capacity.
(3) Amortization of goodwill arising on the acquisition of Sports
Internet Group.
3. Share of operating results of joint ventures
This relates to the Group's equity share of the operating results
of joint ventures.
2000 1999 2000
3 months 3 months Year
ended ended ended
September 30 September 30 June 30
(pound)m (pound)m (pound)m
(unaudited) (unaudited) (audited)
------------ ------------ ---------
KirchPayTV 21.6 - 11.0
British Interactive Broadcasting 13.0 19.5 99.1
Sky Ventures 2.7 2.9 11.2
37.3 22.4 121.3
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