British Sky Broadcasting Group plc Results for the Three Months Ended September 30, 2001; Strong Growth in Revenue and Operating Profit.Business Editors LONDON--(BUSINESS WIRE)--Nov. 2, 2001 -- Revenue increases by 24% to (pound)643 million ($945 million) -- EBITDA increases by 32% to (pound)65 million ($95 million) -- Operating profit before goodwill increases by 23% to (pound)45 million ($66 million) -- Net digital DTH subscriber growth of 190,000 -- Net DTH subscriber growth of 45,000 following one-off effect of analogue switch-off -- ARPU up 8% to (pound)317 ($466), including interactive ARPU of (pound)13 ($19) -- Sky is now a fully digital service - Analogue switch-off achieved ahead of target Tony Ball, Chief Executive of 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, said: "We have achieved our goal of becoming a fully digital service. Sky continues to attract high quality subscribers and to deliver strong revenue and profit growth despite the difficult advertising market. This is the sixth successive quarter in which we have increased year on year profitability and we remain on track to deliver positive free cashflow for the second half of the financial year." A conference call for analysts will be held at 8:30 a.m. (GMT (Greenwich Mean Time) See UTC. GMT - Universal Time 1 ) today. To register for this, please contact Diane DIANE Diversified Information and Assistance Network (Tennessee Valley Authority) DIANE Direct Information Access Network for Europe DIANE Digital Integrated Attack and Navigation Equipment Bate bate 1 tr.v. bat·ed, bat·ing, bates 1. To lessen the force or intensity of; moderate: "To his dying day he bated his breath a little when he told the story" at Portland Portland, town, England Portland, town (1991 pop. 12,945), Dorset, S England. It is on the Isle of Portland, a small rocky peninsula. Portland stone has been used in St. Paul's Cathedral and other important London buildings. Lobsters and crabs are harvested. PR on +44 20 7404 5351. In addition, a live webcast of the call will be available on Sky's corporate website (www.sky.com/corporate). There will be a separate conference call for US analysts at 10:00 a.m. (EST EST electroshock therapy. EST abbr. electroshock therapy ) today. Details of this call have been sent to US institutions and can be obtained from Patrick Lyon Lyon English Lyons City (pop., 1999: city, 445,452; metro. area, 1,348,932), east-central France. Located at the confluence of the Rhône and Saône rivers, it was founded as the Roman military colony Lugdunum in 43 BC (see 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 rules Noun, pl Austral & NZ slang no rules at all [origin unknown] on +1 212 889 4350. BUSINESS REVIEW Operational At September September: see month. 30, 2001 the total number of direct-to-home See DTH. ("DTH (Direct-To-Home) Typically refers to satellite TV broadcasting directly to a dish antenna on the roof of a house. See DBS. ") subscribers was 5,498,000, all of whom were digital subscribers. Net growth in digital subscribers of 190,000 was achieved in the three months to September 30, 2001 ("the quarter"). Total subscribers to Sky's channels increased by 148,000 in the quarter to 10,192,000. On September 27, 2001, Sky ceased broadcasting its 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". DTH service. On that date, there were 77,000 remaining subscribers to the service. The company expects a proportion of these subscribers to take up Sky's offer to transition to a digital service over the remainder of the fiscal year. Digital churn churn: see butter. for the year to date (annualised) stands at 10.4%. The quarterly annualised average revenue per DTH subscriber (ARPU (Average Revenue Per User) A calculation often used to determine the overall value of an application. It is also used to rate particular customers, especially in the wireless space, by comparing someone's account to the overall average. ) at September 30, 2001 was (pound)317 ($466), an increase of 8% over the three months ended September 30, 2000 ("the comparable period"). In the quarter, Sky continued to diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. its distribution channels. Direct sales and other non-retail channels accounted for 54% of new subscriber additions. Sky channels' share of viewing in all UK homes was 6.0% in the quarter, up from 5.8% on the comparable period. During the quarter, non-terrestrial channels as a whole achieved their highest ever weekly share of viewing in all UK homes (22.5%), while the major terrestrial Dealing with the earth. See terrestrial link. stations ITV (1) See interactive TV. (2) (iTV) The code name for Apple's video media hub (see Apple TV). 1 and BBC BBC in full British Broadcasting Corp. Publicly financed broadcasting system in Britain. A private company at its founding in 1922, it was replaced by a public corporation under royal charter in 1927. 1 achieved their lowest ever weekly shares (24.2% and 24.5% respectively). Sky Sports achieved record audiences for the opening fixtures of the new Premier League season, demonstrating that demand for high quality sports coverage remains strong. Sky Sales has recently won the airtime air·time n. 1. The time during which a radio or television station is broadcasting. Also called airspace. 2. The time at which a radio or television program is broadcast. sales contracts Sales Contract Contract between a seller and buyer for the sale of goods, services, or both. for the Discovery channels and Emap's portfolio of six digital music channels. These new contracts mean that Sky Sales now sells advertising on behalf of 34 channel brands and is the biggest supplier of commercial impacts to the majority of audiences after ITV and Channel Four. Sky and Warner Bros BROS Brothers BROS Benefits and Retirement Operations Section (King County, Washington) BROS Barnes and Richmond Operatic Society (London, UK) ., a division of Time Warner Entertainment Company L.P., have recently exercised their rights under the existing pay-TV pay-TV n. A system for receiving television broadcasts by making subscription payments, as by renting a device that unscrambles the broadcaster's scrambled signal. Also called pay television. output contract to extend the contract for a number of years, on terms similar to those which are currently prevailing. On October October: see month. 1, 2001, Sky launched the Sky Active service which combines all Sky's existing interactive applications with the services previously offered by Open... The Sky Active Menu offers faster interactive services and simple access, by pressing the red button on the Sky remote while watching a Sky channel or via the interactive button. Financial Sky continues to increase its profitability year on year. 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. before goodwill for the quarter increased to (pound)45 million ($66 million), an increase of 23% compared with (pound)36 million ($53 million) for the comparable period. DTH revenues increased by (pound)91 million ($134 million) to (pound)438 million ($644 million) as a result of a 19% increase in the average number of DTH subscribers, and a 7% increase in core ARPU to (pound)304 ($447). An increase in the average number of digital terrestrial ("DTT DTT Deloitte Touche Tohmatsu (Deloitte & Touch Global Operations) DTT Dithiothreitol (cytology reagent) DTT Digital Terrestrial Television DTT Discrete Trial Training ") subscribers was partly offset by a 4% decrease in average cable subscribers and the continued decline in the average number of premium channels taken by both cable and DTT subscribers. Consequently cable and DTT revenue increased by (pound)3 million ($4 million) in the quarter to (pound)76 million ($112 million). The Group's advertising revenue fell by 6% on the comparable period to (pound)54 million ($79 million). Sky continues to grow its advertising market share, but the overall decrease reflects the severe downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. in the advertising market as a whole. Interactive revenues for the quarter were (pound)47 million ($69 million), of which (pound)27 million ($40 million) related to betting via the telephone, the internet and interactive television. Interactive ARPU was (pound)13 ($19), an increase of 44% on the comparable period. Programming costs for the quarter increased by (pound)51 million ($75 million) to (pound)303 million ($445 million), principally as a result of higher sports rights costs following the start of the new Premier League contract and higher third party channel costs as a result of the higher number of subscribers. Other operating costs operating costs npl → gastos mpl operacionales for the quarter increased by (pound)63 million ($93 million) to (pound)295 million ($434 million) due to the increased cost of subscriber management, reflecting the higher number of subscribers, the consolidation of interactive costs and higher gaming costs in line with increased gaming revenues. Included in other operating costs are marketing costs of (pound)100 million ($147 million). Although marketing costs now include BiB's set top box subsidy subsidy, financial assistance granted by a government or philanthropic foundation to a person or association for the purpose of promoting an enterprise considered beneficial to the public welfare. , which was not consolidated in the comparable period, the Group reduced marketing costs by (pound)5 million ($7 million) from (pound)105 million ($154 million) in the comparable period. This reduction was primarily achieved through a combination of lower set top box costs and reductions in above-the-line spending. As a result, subscriber acquisition cost has fallen to (pound)237 ($348) from approximately (pound)250 ($368) (on a like-for-like basis) in the comparable period. The Group expects subscriber acquisition costs to continue to fall in the course of the rest of the financial year. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become for the quarter before exceptional items increased by 32% from (pound)49 million ($72 million) to (pound)65 million ($95 million). The Group's share of the 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. of joint ventures was reduced from (pound)37 million ($54 million) in the comparable period to (pound)31 million ($45 million) in the quarter. KirchPayTV accounted for (pound)29 million ($43 million) of these losses. After its share of the results of joint ventures, the Group made a loss before taxation of (pound)89 million ($131 million). The loss after tax in the quarter was (pound)95 million ($139 million). The Group's operating cash outflow was (pound)47 million ($69 million) in the quarter, compared to an operating cash outflow of (pound)172 million ($253 million) in the comparable period. This includes increases in working capital (principally related to the timing of payments to sports bodies) of (pound)97 million ($143 million). After capital expenditure of (pound)26 million ($38 million), net interest payments of (pound)54 million ($79 million) and other net outflows of (pound)6 million ($9 million), net debt increased by (pound)133 million ($195 million) to (pound)1,680 million ($2,470 million). KirchPayTV Since the consideration by the Group of the business plan of KirchPayTV in July, there have been a number of strategic, operational and management changes which KirchPayTV have undertaken or plan to undertake in the future. The Group is currently seeking information from KirchPayTV to evaluate the financial effects of these changes on KirchPayTV. The carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of the Group's investment in KirchPayTV may be adversely affected by such changes and in these circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or the Group's right to exercise a put option in respect of its stake in KirchPayTV may need to be taken into consideration. The put option becomes exercisable from October 1, 2002, if no initial public offering of KirchPayTV has occurred before then. If the put option is exercised, Kirch Holding would be required to pay in cash an amount equal to the cost of acquisition at the time the Group entered into the investment agreement, plus interest. Both Kirch Holding and Dr Leo Kirch Leo Kirch (born 21 October 1926 in Volkach, Bavaria) is a German media entrepreneur. Life Leo moved shortly after he was born to the nearby town of Würzburg. After completing high school he studied marketing and management as well as mathematics at the University of are subject to contractually binding terms which preclude pre·clude tr.v. pre·clud·ed, pre·clud·ing, pre·cludes 1. To make impossible, as by action taken in advance; prevent. See Synonyms at prevent. 2. assets being transferred out of Kirch Holding on less than arm's length arm's length adj. the description of an agreement made by two parties freely and independently of each other, and without some special relationship, such as being a relative, having another deal on the side or one party having complete control of the other. terms. However, there is no certainty that the resources of Kirch Holding will be sufficient to satisfy the put option if exercised. Corporate David Evans David Evans may mean:
American anatomist who isolated four pituitary hormones and discovered vitamin E (1922). is President and Chief Executive Officer of Crown Media Holdings Inc., previously known as Hallmark hallmark, mark impressed on silverwork or goldwork to signify official approval of the standard of purity of the metal, also called plate mark. The hallmark was introduced by statute in England in 1300 and enforced by the Goldsmiths' Hall, London. Entertainment Networks Inc. On September 25, 2001, Vivendi announced that it would enter into a monetisation agreement connected to its BSkyB investment. On October 11, 2001, Sky received a notification that Deutsche Bank Deutsche Bank AG (IPA: /'dɔɪ.tʃə/[1]) (ISIN: DE0005140008, NYSE: DB) (English: German Bank AG London held a notifiable notifiable /no·ti·fi·a·ble/ (no?ti-fi´ah-b'l) necessary to be reported to a government health agency. notifiable necessary to be reported to the relevant government authority. Said of individual diseases. interest in 448,190,847 ordinary shares of the company (23.72% of the issued share capital). On October 16, 2001, Sky and Ladbrokes, the betting and gaming division of Hilton Group plc, announced they had discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: negotiations relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc a proposed joint venture to offer a fixed odds betting service on Sky Sports channels Sports channels are television specialty channels (usually available exclusively through cable and satellite) broadcast sporting events, usually live, and when not broadcasting events, sports news and other related programming. and other media. As a result, the provision for loss on disposal of subsidiary has been written-back, resulting in a non-cash exceptional profit of (pound)10 million ($15 million), accounted for below operating profit. Sky continues to operate and develop its interactive TV betting service through its wholly-owned bookmaker, Surrey Surrey, county (1991 pop. 997,000), 653 sq mi (1,691 sq km), SE England. The county seat is Guildford. The North Downs cross the county from east to west. To the north the land slopes gently downward to the Thames, into which flow the Wey and the Mole, Surrey's Sports.
Appendix 1
Subscribers to Sky Channels
Prior Year
Q1 2000/01 Q4 2000/01 Q1 2001/02 Net change
as at as at as at in the
9/30/00 6/30/01 9/30/01 quarter
DTH
Digital 4,083,000 5,308,000 5,498,000 +190,000
Analogue 640,000 145,000 0 -145,000(2)
Total DTH 4,723,000 5,453,000 5,498,000 +45,000
Cable 3,052,000 2,865,000 2,914,000 +49,000
DTT 846,000 1,105,000 1,178,000 +73,000
Total UK 8,621,000 9,423,000 9,590,000 +167,000
Cable - Eire 617,000 621,000 602,000 -19,000
Total UK & Eire 9,238,000 10,044,000 10,192,000 +148,000
DTH Churn rate 9.8% 10.0% 10.4%(1)
for year
to date (annualised)
1: Excludes analogue churn up to September 27, 2001 and the effect
of the termination of the analogue service on September 27,2001. Total
churn including analogue churn and the termination of the analogue
service was 18.4%.
2: Represents the aggregate of: (i) subscribers who transitioned
to the digital service during the quarter, (ii) analogue churn up to
September 27 and (iii) the 77,000 subscribers whose contracts
terminated on September 27.
Consolidated Profit and Loss Account for the three months ended
September 30, 2001
2001/2002
Before Three Before
goodwill Goodwill months goodwill
and and ended and
exceptional exceptional Sept. 30 exceptional
items items Total items
$m(a) $m(a) $m(a) (pound)m
Notes (unaudited)(unaudited) (unaudited)(unaudited)
Turnover: Group
and share of
joint ventures 1,011.8 -- 1,011.8 688.2
Less: share of
joint ventures'
turnover (66.9) -- (66.9) (45.5)
Group turnover 1 944.9 -- 944.9 642.7
Operating expenses,
net 2 (879.3) (43.7) (923.0) (598.1)
EBITDA 94.9 -- 94.9 64.5
Depreciation (29.3) -- (29.3) (19.9)
Amortization -- (43.7) (43.7) --
Operating profit
(loss) 65.6 (43.7) 21.9 44.6
Share of operating
results of joint
ventures 3 (45.4) -- (45.4) (30.9)
Joint ventures'
goodwill
amortization -- (72.3) (72.3) --
Profit on sale of
fixed asset
investment -- 3.3 3.3 --
Share of joint
venture's
exceptional
loss on
sale of fixed
asset investment -- -- -- --
Release of provision
for loss on
disposal of
subsidiary -- 14.7 14.7 --
Profit (loss) on
ordinary activities
before interest
and taxation 20.2 (98.0) (77.8) 13.7
Interest receivable
and similar income 6.1 -- 6.1 4.1
Interest payable
and similar charges (59.4) -- (59.4) (40.4)
Loss on ordinary
activities before
taxation (33.1) (98.0) (131.1) (22.6)
Taxation charge (8.3) -- (8.3) (5.6)
Loss on ordinary
activities after
taxation (41.4) (98.0) (139.4) (28.2)
Equity dividends -
paid and proposed --
Retained loss (139.4)
Loss per share -
basic and diluted (2.2c) (5.2c) (7.4c) (1.5p)
Loss per ADR(b)
- basic and diluted (13.2c) (31.2c) (44.4c) (9.0p)
2001/2002 2000/2001
Three Three
Goodwill months months
and ended ended
exceptional Sept. 30 Sept. 30(c)
items Total Total
(pound)m (pound)m (pound)m
Notes (unaudited) (unaudited) (unaudited)
Turnover: Group and share
of joint ventures -- 688.2 563.6
Less: share of joint
ventures' turnover -- (45.5) (43.3)
Group turnover 1 -- 642.7 520.3
Operating expenses, net 2 (29.7) (627.8) (489.5)
EBITDA -- 64.5 48.9
Depreciation -- (19.9) (12.7)
Amortization (29.7) (29.7) (5.4)
Operating profit (loss) (29.7) 14.9 30.8
Share of operating results
of joint ventures 3 -- (30.9) (37.3)
Joint ventures' goodwill
amortization (49.2) (49.2) (16.8)
Profit on sale of fixed
asset investment 2.3 2.3 --
Share of joint venture's
exceptional loss on
sale of fixed asset
investment -- -- (69.5)
Release of provision for
loss on disposal of
subsidiary 10.0 10.0 --
Profit (loss) on ordinary
activities before
interest and taxation (66.6) (52.9) (92.8)
Interest receivable and
similar income -- 4.1 6.2
Interest payable and
similar charges -- (40.4) (37.0)
Loss on ordinary activities
before taxation (66.6) (89.2) (123.6)
Taxation charge -- (5.6) (5.3)
Loss on ordinary activities
after taxation (66.6) (94.8) (128.9)
Equity dividends -
paid and proposed -- --
Retained loss (94.8) (128.9)
Loss per share -
basic and diluted (3.5p) (5.0p) (7.0p)
Loss per ADR(b) -
basic and diluted (21.0p) (30.0p) (42.0p)
(a) US dollar equivalents are provided for reader convenience at
the September 28, 2001 exchange rate of(pound)1= $1.4702
(b) Each ADR represents six ordinary shares
(c) As restated, following the adoption of FRS 19, Deferred
taxation.
Notes:
1. Turnover
2001/2002 2000/2001
Three Three
months months
ended ended
September 30 September 30
(pound)m (pound)m
(unaudited) (unaudited)
Direct-To-Home subscribers 437.9 347.2
Cable and DTT subscribers 75.6 72.8
Advertising 53.6 56.8
Interactive(a) 47.3 16.3
Other 28.3 27.2
642.7 520.3
(a) Interactive income includes income from gaming, online
advertising, internet, e-commerce, interconnect, text services and Sky
Interactive set-top box subsidy recovery.
2. Operating expenses, net
2001/2002 2000/2001
Before Three Three
goodwill Goodwill months months
and and ended ended
exceptional exceptional Sept. 30 Sept. 30
items items Total Total
(pound)m (pound)m (pound)m (pound)m
(unaudited)(unaudited) (unaudited) (unaudited)
Programming (i) 302.6 - 302.6 251.6
Transmission and
related functions (i) 43.9 - 43.9 28.2
Marketing 100.2 - 100.2 105.0
Subscriber management 73.8 - 73.8 46.3
Administration 51.9 29.7 81.6 43.8
Gaming 25.7 - 25.7 14.6
598.1 29.7 627.8 489.5
(i) The amounts shown are net of (pound)1.8 million (2000/2001
three months ended September 30: (pound)1.5 million) receivable from
the disposal of programming rights not acquired for use by the Group,
and (pound)7.7 million (2000/2001 three months ended September 30:
(pound)14.2 million) in respect of the provision to third party
broadcasters of spare transponder capacity.
3. Share of operating results of joint ventures
2001/2002 2000/2001
Three Three
months months
ended ended
September 30 September 30
(pound)m (pound)m
(unaudited) (unaudited)
Joint ventures:
KirchPayTV 28.7 21.6
BiB - 13.0
Programming joint ventures, net 2.2 2.7
30.9 37.3
This relates to the Group's equity share of the operating results of the Group's joint ventures. The Group recognised 32.5% of the results of BiB up until November 2000. From this date, to May 9, 2001, 100% of BiB's losses were recognised due to the arrangement dated July 17, 2000, under which the Group agreed to provide 100% of BiB's funding after existing funding had been utilised. From May 9, 2001, the Group fully consolidated BiB as a subsidiary. |
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