Sky starts strongly as broadband subscribers mushroom

Sky has reported a strong first quarter book, with new paid-for subscription products boosting the company’s revenue.

The FTSE 100 company posted its first quarter results to 30 September on Wednesday, where it posted quarterly revenue of £2.8bn, up 6% on the previous year.

That contributed to a 10% increase in operating profit, up to £375m.

The increase in revenue was driven by an extra 937,000 new paid-for subscription products, including an extra 133,000 new broadband subscribers – a 77% year on year increase that took the total number of subscription products sold for the quarter to 54.7m.

The company also signed on an extra 134,000 customers, taking its total customer base to 21.14m.

Sky chief executive Jeremy Darroch said it was a strong start to the year: “As we continue to place customers right at the heart of our business, we are focused on offering the very best content at the same time as anticipating customers' evolving needs, delivering the programmes that they love across multiple platforms and devices.”

Darroch also noted the success of the group’s connected home strategy in the UK and Ireland, which is starting to be rolled out in other territories.

“We now have almost 10m connected households across the group, driving over 750m views to our connected services this quarter alone.”

The company also highlighted it had signed new multi-year agreements with Disney and the southern hemisphere's SANZAR rugby.

Hargreaves Lansdown’s Richard Hunter said Sky’s numbers make impressive viewing.

“By geography, the benefits of the expansion into Germany and Italy are becoming increasingly evident, whilst by product the UK broadband offering in particular saw nearly 80% growth in the period,” he noted.

“Less positively, margins and penetration in Italy and Germany have yet to reach the levels of the UK business whilst from a cashflow perspective, the recent and hard-fought victory in the Premier League football rights comes at an inevitably high cost.”