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HD demand helps BSkyB to buck trend

Pa
Friday 31 October 2008 10:46 GMT
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BSkyB today said its customer numbers topped nine million after the satellite broadcaster bucked "challenging" trading conditions.

The firm added 87,000 new customers in the three months to September 30, taking its total to 9.07 million - its best first-quarter performance for five years.

The broadcaster's churn rate - customer turnover - rose to 10.9 per cent in a period when the company raised prices, but remains within its 10-11 per cent guidance.

Shares in the firm have recently come under pressure amid fears that households will cut back on pay-TV channels amid looming recession.

But chief executive Jeremy Darroch said the group had produced "a good set of results in a challenging environment".

BSkyB saw record demand for its high-definition services, while there was "good growth" in products such as broadband and its Sky Talk telephone offering.

The firm boasts almost 1.8 million broadband customers with one in five Sky customers now taking up the service.

The company upped its average revenue per user figure by £19 to £430 and said there was headroom for further growth in the business despite an uncertain economic outlook.

"While no consumer business is immune to a downturn, our move to a broader customer offer... has enabled us to build a healthy and relatively resilient subscription base," the company added.

BSkyB said its "fundamental" selling point remained its wide-ranging sports packages unavailable to terrestrial viewers.

Alongside Premiership football, the firm has secured cricket broadcasting rights to all home Tests, one-day internationals and 20-20 internationals until the end of 2013.

BSkyB also gained its biggest ever tennis audience for the recent US Open final between Roger Federer and British challenger Andy Murray.

The company increased pre-tax profits 7 per cent to £129 million after exceptional costs including a further £24 million loss on its controversial 17.9 per cent stake in ITV, which the firm has been ordered to reduce to below 7.5 per cent.

Panmure Gordon analyst Alex DeGroote said: "Looking at the main KPIs (key performance indicators), the performance is very satisfactory, with no obvious evidence of 'recession impact' so far."

But he added: "Stating the obvious, BSkyB has never faced a proper recession before. It is therefore unproven how resilient the business model will be."

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