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Subscriber goal in sight for BSkyB.

Byline: John Duckers Business Editor

Pay TV firm British Sky Broadcasting yesterday said it had delivered healthy subscriber growth for the third quarter in what is normally a quiet period, helping boost operating profit by 96 per cent.

The company has targeted seven million digital subscribers by the end of the year and said that it remained on track to meet that goal.

Reporting results for the nine months to March 31, BSkyB said net subscriber numbers for its direct-to-home service had risen by 150,000 by the third quarter to 6.7 million.

Coming straight after the strong Christmas period, BSkyB's third quarter is traditionally slower due to seasonality with fewer new subscribers choosing to join up in the first three months of the new year.

Revenue from subscribers to the direct-to-home service rose 23 per cent to pounds 1.7 million.

Based in Isleworth, Middlesex, BSkyB said advertising revenue increased by 15 per cent in the period to pounds 204 million boosting operating profits by 96 per cent to pounds 245 million.

Chief executive Tony Ball said: 'We are reporting another strong set of results. In what is normally a quiet period we have delivered healthy subscriber growth and an operating profit which has almost doubled year on year, thanks to strong revenue growth and sustained cost control.'

Including both cable TV viewers and estimated digital terrestrial homes, the company said at least one or more of its Sky channels were now distributed to 12 million homes in the UK and Ireland.

The churn rate for direct-tohome - the number of customers not renewing subscriptions - fell to 9.3 per cent, a record low level which came in spite of a higher price for the service in the period.

Annualised average revenue per user (ARPU) - the key industry measure - was pounds 364 in the third quarter, a seven per cent increase over the same quarter of 2002 and pounds 13 higher than the previous quarter to December 31.

BSkyB said the increase in ARPU reflected price rises introduced on January 1.

At the bottom line, BSkyB's pre-tax profits were pounds 53.9 million for the nine months compared with pre-tax losses of pounds 1.3 billion last year when it took a big write-off from its involvement with Germany's KirchPayTV.

For the third quarter alone, pre-tax profits came in above analysts' expectations at pounds 65.8 million, up from pounds 11.6 million a year earlier.

BSkyB said it was paying pounds 210 for each customer it acquired, representing a pounds 25 reduction on the same period last year thanks to cheaper set-top boxes which customers use to acquire the digital signal on their televisions.

Asked about the bidding for the television rights to English Premier League football, which Sky used to build its dominant position, Mr Ball said it was still awaiting the results of the European Commission pricefixing probe of the league.

'I would expect by the middle of next month the league will be in a position to put out some kind of tender documents,' he said.

Sky paid about pounds 1.1 billion for a three-year contract that runs through to the end of next season.
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Title Annotation:Business
Publication:The Birmingham Post (England)
Date:May 14, 2003
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