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    Sky Q2 Financial results

    This is a discussion on Sky Q2 Financial results within the Sky news and announcements forums, part of the SkyUser Announcements category; Sky has today released their results for the first half of the financial year. For the full results, please see ...

    1. #1
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      Sky Q2 Financial results

      Sky has today released their results for the first half of the financial year. For the full results, please see the link below.

      https://corporate.sky.com/documents/...ember-2015.pdf

      The following are some of the main points with a mixture of quotes from the document above and my own comments.

      Unaudited results for the six months ended 31 December 2015 Six months to 31 Dec 2015/16 2014/15 Variance
      Revenue £5,718m £5,437m +5%
      - Statutory revenue £5,718m £4,302m +33%
      EBITDA £1,049m £973m +8%
      Operating profit £747m £667m +12%
      - Statutory operating profit £524m £536m -2%
      Earnings per share (basic) 29.9p 27.1p +10%
      - Statutory earnings per share (basic)* 21.0p 63.6p -67%
      Dividend per share 12.6p 12.3p +2%


      EXCELLENT FIRST HALF RESULTS: EXCITING PLANS FOR 2016

      Strong demand from customers

      • 337,000 new customers joined Sky in Q2; highest UK and Ireland customer growth for ten years
      • Customers bought 1.1 million new products, with strong demand for both TV and broadband


      Extending our leadership on screen

      • Key rights secured: Showtime, HBO, Premier League and USA PGA Tour
      • Over 100 Sky original dramas in development or production


      Market leading innovation gathering pace

      • 10 million homes now connected
      • Significant enhancements coming to Sky+
      • On Demand, Box Sets and Sky Go Extra services rolling out in Germany and Italy
      • Launch of an even better NOW TV box
      • Sky Q, our ground-breaking new TV product, available to buy in the UK and Ireland from February


      Excellent financial performance

      • Further strong revenue growth of 5% to £5.7 billion
      • Highest ever first-half operating profit, up 12% to £747 million
      • Increase in interim dividend to 12.6 pence per share


      New Chairman and Deputy Chairman announced

      • Nicholas Ferguson CBE to step down as Chairman and as a Director after 12 years on the Board
      • James Murdoch appointed Chairman; Martin Gilbert appointed Deputy Chairman
      Jeremy Darroch, Group Chief Executive, commented:

      “We have had another very strong half as we continue to transform Sky, broadening our business and expanding into new markets and customer segments. This strategy is delivering today and opening up significant growth opportunities for the future. We are pursuing those opportunities with energy and purpose.

      “Today’s results show that our approach is working and customers are responding in record numbers. Over 337,000 new customers joined Sky in the second quarter and we sold 1.1 million extra paid-for products. This has delivered strong financial performance with revenue growth of 5%, a 12% increase in operating profit and 10% growth in earnings per share.
      Results Highlights

      The turnover over customers is currently at 10.2% for the UK & Ireland. This is down on last year's figure of 10.5%. Both Germany & Italy are doing better, but Germany's figures have risen from 8.3% to 9.8%.

      Revenue is up for both the UK & Ireland and Germany, but down for Italy. Overall it is up for the whole group by 5%.

      6 months to 31-Dec-15 6 months to 31-Dec-14 at constant currency Growth at constant currency
      Revenue £5,718m +5%
      UK & Ireland £4,072m +6%
      Germany & Austria £693m +10%
      Italy £953m -3%
      Operating Profit £747m +12%
      UK & Ireland £756m +16%
      Germany & Austria (£34m) NM
      Italy 25m -19%

      Results are presented on an adjusted like for like basis including the results of Italy and Germany and Austria for the full prior period, and including the results of the continuing operations of UK and Ireland. The constant currency rates used for translating the financial results of Italy and Germany and Austria into sterling are €1.39:£1, being the average rate for the current period.

      Operating profit for the period to 31 December 2015 in Germany and Austria is impacted by the previously communicated change in amortisation profile for Bundesliga rights which had the effect of increasing programming costs by £17 million in the current period compared to the prior period.
      UK and Ireland
      The UK and Ireland delivered a very strong performance. In the quarter, retail customers grew by 205,000 - our strongest Q2 performance in 10 years - and we added 778,000 new paid-for products, taking our product base to over 39 million. We added a further 146,000 TV customers in the quarter, while churn was down 30 basis points year on year to 10.2%, the lowest Q2 level for four years.

      We are making good progress in broadband as the strong performance of the first quarter continued. In the second quarter, broadband growth was up 27% year on year to 144,000. Across the half we attracted 277,000 new broadband customers, an increase of 53% year on year. This performance reflects the quality of our offer and our superior customer service, with Sky ranked by Ofcom as the best performing provider in terms of customer satisfaction. Alongside this, we are pleased with the progress we are making in our plans to add mobile to our offering.

      This excellent operational performance delivered revenue growth of 6% to £4,072 million, and operating profit up 16% to £756 million.

      Content
      Customers across our markets are responding well to our world class content.
      The quality of our movie channels and on demand titles has delivered record results in movie viewing. Over Christmas, we had highest ever weekly audience to Sky Movies in the UK and our pop up channels were popular across our markets. The Bond 007 channels in Germany and Italy each achieved almost one million views of leading titles, and the Harry Potter channel reached more than 3 million viewers in the UK.

      Our breadth of sports coverage has also delivered record breaking audiences. In golf, the British Masters was the most watched European Tour event of the season and rugby’s Super League Grand final achieved its highest UK audience for five years. In Italy we set an all-time record in MotoGP, with a 48% share of viewing for the season finale on Sky Sports MotoGP HD and Cielo.

      Our range of stand-out entertainment and drama is also resonating with our customers. In Italy, the final of X Factor delivered a record audience, up over 30% versus the prior year. In the UK Flash, Supergirl and Arrow all achieved over 1 million viewers, while Fungus the Bogeyman was our best performing Christmas special in four years. On Sky Living, Blindspot provided the channel with its strongest launch programme ever, while Sky Arts achieved a record audience with Portrait Artist of the Year.

      Our customers are embracing the opportunity to view our world-class content on catch-up, on demand and on mobile devices. This is demonstrated by the response to our critically acclaimed original production The Last Panthers. The live premiere of the first episode was watched by 300,000 viewers across Europe, growing by a factor of four to more than 1.3 million over the following 30 days as customers watched the show whenever and wherever they chose.

      The quality of our content means it is attracting a worldwide audience. Sky Vision has sold the first series of Fortitude in over 120 territories. In addition, the first series of Gomorrah was sold in over 110 countries, and The Young Pope, our major new Sky Original Production, has already been pre-sold to over 80 territories across the world, reflecting the quality of the content that we are producing at Sky.

      Plans for 2016: Content

      We are making progress across Europe, securing long-term, strategic deals to complement our own investment in original production. This combination enables us to offer our customers exclusive, world-class content.

      Building on our new HBO deal announced in November, we have agreed a significant pan-European partnership with Showtime, one of the US’ most exciting networks. The agreement means our customers can exclusively enjoy new Showtime dramas like Billions, which premiered in the US on 17 January 2016 with the best series debut performance ever for a Showtime original series. Other new series include the return of Twin Peaks and new seasons of hits such as Ray Donovan and The Affair, alongside an acclaimed catalogue including Dexter, Californication, and House of Lies on demand. From HBO we can look forward to Vinyl, co-created by Martin Scorsese and Mick Jagger, which premieres in February, and the return of Game of Thrones in April.

      To complement our acquired content, our Sky original productions are reaching scale. Looking into 2016, we have over 100 dramas in production or development, including nine returning series. Our pipeline is diverse and compelling, from new dramas such as The Young Pope to returning seasons of Fortitude, The Tunnel and Gomorrah.

      In sport, we have acquired exclusive rights to the English Premier League in Italy for the next three seasons and we can look forward to our best season ever in the UK in 2016/17 with the addition of new Friday night matches, enhanced first picks, and Saturday afternoon games in Ireland. In Germany, we have extended our long-term partnership with the US PGA Tour, with exclusive rights to over 40 golf events each year, and the popular handball Champions League.


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      Re: Sky Q2 Financial results

      2nd part...

      Plans for 2016: Innovation

      With our continued focus on improving the customer experience, broadening our product range, and giving customers more reasons to join Sky and take additional products from us, we have exciting plans for the year ahead for all our customers.

      Sky+ remains at the heart of our offer for millions of customers. From next month, customers in the UK and Ireland will receive the latest software update to their EPG, giving them an even easier way to enjoy their favourite box sets as a full series can be downloaded into their planner in one go. Later in the year we will launch a brand new homepage, showcasing more of our best 8

      content and providing customers with an easy place to continue watching programmes they have yet to finish. In Italy, we will launch our full Sky Box Set service in March, whilst Sky Adsmart will be introduced later in the year.

      Earlier this month, Sky Go received its biggest redesign since launch in the UK, making the user interface (UI) more engaging and intuitive. Features will be added throughout the year, including a recommendation service and a ‘Watch next episode’ prompt within Sky Box sets, giving more prominence to on demand content, a similar approach to that already adopted in Italy and Germany. On the mobile platform we’re launching a fantastic new Sky Kids app, giving Sky+ customers access to a host of on demand and advert-free kids content. The app has been especially designed for kids, and includes the ability to select age appropriate content, giving parents peace of mind over their kids’ viewing. The app will launch initially in the UK, and will roll out to our other markets in time.

      Later in the year, we will launch a new Sky+HD box in Germany and Italy, giving customers updated features and technology. The box will be compatible with Sky Q functionality, giving our customers the ability to access Sky Q features, as detailed below, at a later date.

      We launched NOW TV in the UK in 2012, and it has enabled us to reach a whole new segment of consumers. From next month, we will begin rolling out a new UI to our NOW TV customers, giving them an easier way to access the content they want. A new integrated homepage will give customers editorial recommendations on what to watch and the catch-up section will be curated directly by our content partners.

      Later in the year we will be launching a brand new NOW TV box, offering seamless access to over 60 free-to-air channels alongside the pay content. This will be our most advanced NOW TV product to date and will offer a streaming service to customers who want to access live free-to-air television alongside some pay content, all in one integrated offering.

      Next month we bring our ground-breaking Sky Q product to market in the UK. Not only will Sky Q redefine how we watch TV, but it makes it easier than ever for customers to access the best of the web and their own personal content along with their favourite TV shows, on the big screen and on their devices.

      The Sky Q suite of products connects wirelessly, making TV viewing seamless, and enables customers to access a whole range of fantastic features. These include pausing viewing on one TV screen and picking up in another room, saving recordings onto a tablet to watch anywhere, and watching different programmes on up to five screens simultaneously whilst also recording four other channels.

      In 2016, Sky Q will evolve with the addition of the UK’s most comprehensive Ultra HD service, powerful voice search and its own app for mobile devices, plus more partnerships and content. Sky Q will sit alongside Sky+HD and NOW TV, giving us three complementary and outstanding products to offer our customers.

      These significant additions to our portfolio, together with our ongoing commitment to help our customers get the most out of their Sky subscription, means that we are extremely well placed to serve the needs of all customers.
      As mentioned above, the full report is available to be downloaded from the Sky website: https://corporate.sky.com/documents/...ember-2015.pdf

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      Re: Sky Q2 Financial results

      Hardly a mention of the long awaited Sky Mobile.

      Sadly the only mention we get of Sky Mobile in today’s report is this: “We are pleased with the progress we are making in our plans to add mobile to our offering.” ISPreview.co.uk queried this and was told that it would launch towards the end of 2016.
      Source: Sky Broadband Top 5.9 Million Internet Subs, Preps Sky Q for February - ISPreview UK

      I'm sure it will do well when it launches, but I feel that they should have started on this way sooner than they did. I fear that such a long delay in getting into this market means that they will have missed the bigger boat. Now that network operators are routinely selling handsets on 18 to 24 month contracts, the consumer upgrade cycle is longer and less frequent.
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      Re: Sky Q2 Financial results

      Sky really are doing well against some tough competition.
      The BT TV effect, along with the likes of netflix and Amazon has had little or no effect the last few years.
      Still increasing their customer base, churn rate still much the same and in a few quarters last year lower. ARPU is still the same at £47 per month.
      Sky q will slightly increase a percantage of the ARPU later this year Id expect.
      Now tv is a good product and attracting many new customers to sky.
      The one surprise for me is that Movies has had record results 'the best in ten years', suspect this is more Nowtv than via a sky box.

      Also though something else I noticed in the reports was Significant enhancements coming to Sky+
      Look forward to that.

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      Re: Sky Q2 Financial results

      Yes, with my shareholder hat on, Sky results continue to impress.

      Quote Originally Posted by lettice View Post
      Now tv is a good product and attracting extra customers.
      Yes it's completely attracted me away from Sky TV (after almost 14 years)!

      Quote Originally Posted by lettice View Post
      The one surprise for me is that Movies is on the increase, suspect this is more Nowtv thatn via a sky box.
      The pricing structure is currently very attractive, as is the simplicity of being able to start and stop subscriptions. No contract, no notice periods.
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