Sky makes strong start to financial year

Subscription broadcaster and broadband provider Sky posted an update to its first quarter trading on Thursday, with group revenue up 7% to £3.1bn and like-for-like revenue up 5%.

The FTSE 100 firm reported positive growth in all markets, with revenue in the UK and Ireland up £101m to £2.1bn, or 5% at constant currencies.

In Germany and Austria, revenue was up £98m to £434m, or 9% at constant currencies, while in Italy revenue totalled £610m - an increase of £156m, or 13% growth at constant currencies.

The company said more than 100,000 new customers joined in the quarter, including Italy’s highest first quarter customer growth in four years.

It also reported a strong start to the year for cost efficiency, with operating costs down 2% on the prior year.

Sky said it was on track against its full-year expectations.

“I'm pleased with the start we have made to the year, with like-for-like revenue growth of over 5% and more than 100,000 new customers joining Sky,” said group chief executive Jeremy Darroch.

“We finished the quarter strongly after a slower start against the backdrop of the Rio Olympics and UEFA Euro 2016.

“It was also a strong quarter of innovation with the launch of our new streaming service, Sky Ticket, in Germany; Ultra HD in the UK, Ireland, Germany and Austria; and our enhanced mobile TV proposition, Sky Go Extra, in Italy, as we transform all our markets to multi- platform distribution services.”

Darroch confirmed the company was on track financially in a year of investment on screen.

“We are bringing customers the very best TV with more of the biggest Premier League matches, Europe's best box set service and more new and exclusive original drama,” he said.

“We are already seeing the benefit with good growth in revenues, more new customers joining us and existing customers consuming more.

“Alongside this we are making very strong progress on efficiency with operating costs for the quarter lower than a year ago in absolute terms.”

Looking ahead, Darroch said the forthcoming launch of Sky’s mobile proposition will add another major product offering to its UK line up.

“In Germany, the upcoming launch of Sky 1 builds on a series of recent steps transforming the appeal of our proposition beyond our traditional sports base, including the new Entertainment pack, adding Sky Box Sets to the service, and our new Sky+ Pro set-top box.

“And in Italy, customers can look forward to a quarter of unprecedented innovation, with the launch of HD programming on demand, a brand new user interface and our Sky Kids app all coming before Christmas,” Darroch said.

“We are on track as we enter our busy Q2 trading period and we remain focussed on delivering our clear strategy for growth.”