Sky left at 'add' rating by Numis after interims

Numis reiterated an ‘add’ rating and target price of 1,250p for Sky after the broadcaster reported its quarterly interims.

Sky said in the nine months to the end of March revenue rose 5% to £8.7bn, while operating profit rose 12% to £1.14bn.

Sky chief executive, Jeremy Darroch, said it had been a strong quarter, with the company passing a “major milestone” of 40 million products in the UK and Ireland. He said there had been pleasing response to the premium Sky Q box ahead of first installations in the current quarter.

However, the company said it won 177,000 new customers in the three months to March, 160,000 fewer than the previous quarter.

Nevertheless, Numis said: “Net product growth of 177,000 was ahead of consensus 162,000 with a notable performance in Italy and encouraging early response to the premium SkyQ product.

“We upgrade our lower end full year 2016 pre-tax profit/earnings per share forecast to £1,365m/63p (was £1,350m/62p); consensus is 63p. We leave our 2017 estimates, which include the higher costs of the new Premier League contract, unchanged at £1,325m/61p (consensus 59p).”

Shares fell 4.53% to 981.50p at 1019 BST.