Sky rallies as Numis rates broadcaster at 'add'

Sky’s ‘add’ rating and target price of 1,250p were kept unchanged by Numis after the broadcaster reported strong first half revenue growth.

The company said in its interim results on Friday that statutory revenue for the six months to 31 December jumped 5% to £5.72bn from £5.44bn. It was driven by signing up 337,000 new customers in the second quarter - the company’s highest UK and Ireland growth in 10 years – and sold 1.1m extra paid-for products.

Operating profit for the period rose 12% to £747m, and the company declared a dividend of 12.6p per share.

Earnings per share gained 10% to 29.7p, ahead of Numis expectations of 28.4p. Adjusted pre-tax profit also beat the broker’s estimates of £620m at £649m.

“Looking forward, the group continues to push innovation including the SkyQ top-end box in the UK and product roll-out to Germany and Italy,” according to Numis analyst Paul Richard.

“We retain our pre-tax profit/earnings per share forecasts of £1,340m/62p for June 2016, £1,345m/62p for 2017 (flat due to higher Premier League costs) and £1,560m/72p for 2018 (driven by Sky Europe synergies).”

Shares rose 2.02% to 1,062p at 1029 GMT.