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    Sky results for the six months ended 31 December 2016

    This is a discussion on Sky results for the six months ended 31 December 2016 within the Sky news and announcements forums, part of the SkyUser Announcements category; Strong first half delivery; on track for full year Sector leading revenue growth across all markets, faster customer growth than ...

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      Sky results for the six months ended 31 December 2016

      • Strong first half delivery; on track for full year
      • Sector leading revenue growth across all markets, faster customer growth than prior year
      • 12% increase in revenue to 6.4 billion, up 6% on a constant currency basis

      • Operating profit of 679 million, after absorbing 314 million step up in Premier League costs
      • Earnings per share of 28.3 pence, 5% lower
      • Statutory results: 12% increase in revenue; operating profit of 461 million; EPS of 18.8 pence
      • Run rate synergy target of 200 million achieved early; further operating efficiency plans underway
      • Significant progress made on executing our strategy for growth; launched Sky Mobile in UK, our next generation box - Sky+Pro - in Germany and Austria, and Sky Adsmart in Italy
      • Record on demand viewing of two billion streams and downloads as we continue to deliver the best value to customers
      • Clear set of plans in place for 2017


      Jeremy Darroch, Group Chief Executive, commented:
      “We have delivered a strong first half performance across the group, continue to make significant progress against our strategy and remain on track for the full year.
      Across the half we have continued to drive customer and product growth in all our markets, adding over 500,000 new customers – faster growth than last year - and selling two million products. That means, in the past three years and since the Skys have come together, we’ve now added 2.5 million customers and total products are up almost 25%. This has resulted in sector leading revenue growth of 6% which we've achieved despite some pressure on discretionary consumer spending across Europe and a decline in the UK advertising market.
      In a year in which we are absorbing significantly higher programming costs, as a result of the step up in Premier League costs, our financial performance has been good. To put this into perspective, our first half operating profit of 679 million is down 65 million on the prior year despite absorbing an additional 314 million of Premier League costs, highlighting the strength of our underlying financial performance. This has been supported by the efficiency of our operating model and the achievement of our 200 million synergy target six months early.

      We remain confident in our strategic plans and have made significant progress against them. We’ve launched Sky Mobile in the UK, delivered further enhancements to the customer experience across the group and extended our reach in Europe’s largest TV market with the launch of Sky Sports News free-to-air and Sky 1 in Germany and Austria. Whilst churn in the UK has remained higher than planned, we have a full set of actions to address this, including replicating the success of our Italian loyalty programme which has resulted in reduced churn.
      We enter 2017 focussed on giving more quality, choice and value to our customers. In the UK we plan to launch our Sky TV service without the need for a satellite dish for the first time, at the same time as pushing ahead in the 15 billion mobile market. We are continuing to build our European TV production studio with 100 original series going into production this year. And we will broaden our businesses further with the launch of Sky Store in Germany and Austria and the full roll-out of our targeted advertising service, Sky Adsmart, in Italy and Ireland.
      Whilst we expect the backdrop in our territories to remain uncertain, we are on track as we enter the second half of the financial year and we remain focused on delivering our clear strategy for growth."
      https://corporate.sky.com/media-cent...edium=referral


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      Re: Sky results for the six months ended 31 December 2016

      Sky Upcoming content highlights over the next six months;

      https://corporate.sky.com/documents/...g-content-.pdf

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      Re: Sky results for the six months ended 31 December 2016

      But a note for any fellow shareholders...

      'As part of the terms of the proposed takeover by 21st Century Fox of Sky ("the Acquisition"), Sky will not pay any dividends in 2017'

      ... which is a bit of a shame really, as it has been the best performing UK share in terms of income production in my pension portfolio (beaten only by the US shares).
      ++ speedyrite ... powered by Sky Broadband since 2007 ++

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      Re: Sky results for the six months ended 31 December 2016

      UK and Ireland

      Our focus in the UK and Ireland has been on maximising the returns on the significant product and content investments we made throughout 2015/16, as well as delivering broad based revenue growth from new products and services, such as transactional and advertising, alongside pay TV subscription. We’ve had a number of highlights throughout the half, including:
      • Introduction of Sky Q box as standard, with around 25% of new customers currently choosing to pay for additional Sky Q functionality
      • Launched the UK’s most comprehensive ultra HD (UHD) service, broadcasting over 60 Premier League games in the period and now have over 300 hours of on demand UHD content available
      • Downloads of Sky Kids app up 40% in the half, with over 18 million episodes viewed in Q2 alone
      • Sky Sports Mix viewed by over four million households, with over 700 hours of live sport shown since launch
      • Sky Sports attracted 29 of the top 30 Premier League audiences so far, with viewing increasing after a slow start to the season
      • Strong usage of our new Sky Cinema service, with a record seven million movie downloads in one week over Christmas, up over 50% versus the average week in the period
      • 18% increase in revenue from transactional business driven by launch of box sets within Sky Store Buy & Keep
      • Record weekly revenue generated by Sky Store over Christmas, totalling 4 million; Sky Store regularly taking more than 50% share of digital sales for new movie release titles
      • Advertising revenues down just 2% against a broader market decline of 5%


      Our ability to develop more products and services was highlighted by the launch of Sky Mobile in the half. Similar to our entry into the broadband market in 2006, we have been able to leverage the strength of our brand and industry leading customer service to create another revenue and future profit stream. Through a range of distinctive features, we’ve created a mobile service that offers customers greater choice and flexibility than current mobile providers. We began sales in mid-December to existing Sky customers and those who had pre-registered, ahead of our full market launch in early January. We are just getting going in this brand new market and remain very confident in the opportunity ahead.
      Taken together, these priorities have led to a good financial and operational performance with revenue up 5% to 4,267 million, despite the headwinds in the advertising market, and operating profit of 620 million.
      We added 205,000 new customers in the half, driven by a strong Christmas trading period, with a further 1.2 million products sold. This included 124,000 new TV products, taking our total TV customer base to over 11.4 million. In addition, we added 140,000 new broadband products meaning that over six million broadband households across the UK and Ireland choose Sky to provide their broadband service.
      On a 12-month rolling basis churn was up year on year to 11.6%, reflecting an increased proportion of broadband customers now making up our total customer base – who have a greater propensity to switch providers - and the highly promotional environment we are operating in. While this trend has continued for longer than expected, we are confident in the plans we have been developing to address this. Over the course of this year we will be launching a full loyalty programme that we believe will deliver tangible results and reflect the success of our loyalty programme in Italy. We’ve already seen an excellent response to our customer Christmas gifting campaign and going forward want to reward loyalty and customer longevity in order to build even stronger customer relationships.
      Plans for 2017

      In the year ahead we will remain focussed on executing our strategy in each market, exploiting our many opportunities for growth and deepening our relationships with customers.
      It’s going to be our biggest ever year on screen. Through our group wide deals with Showtime and HBO, customers will enjoy exclusive access to the highly anticipated returns of Billions, Twin Peaks, Ray Donovan and Game of Thrones. In March we can also look forward to HBO’s brand new drama, Big Little Lies, starring the award-winning actresses Reese Witherspoon and Nicole Kidman. To complement our acquired content, we have a record number of Sky original programmes, with 11 dramas and five comedies airing throughout 2017. Tonight sees the return of our critically acclaimed drama, Fortitude, starring Hollywood actor, Dennis Quaid, while later in the year our third series of the Italian drama, Gommorah, returns alongside our brand new German crime drama, Babylon Berlin. At the same time, throughout 2017 we will have 100 series in production, totalling over 1,000 hours. Within this, we will be working on 15 new dramas including our most ambitious production to date, Britannia; our political drama, Guerrilla, starring Idris Elba; and the return of our most successful Sky drama on Sky 1, Lucky Man.
      Today we are announcing a new deal for exclusive live rights to England matches in the brand new UEFA Nations League as part of a new contract including qualifiers for Euro 2020 and FIFA World Cup 2022. Under the new deal, Sky Sports customers in the UK and Ireland will enjoy up to 900 live international games, live coverage of all the home nations and UEFA League of Nations for the first time, enhancing our position as the home of the best sport.
      The viewing experience will get even better for customers throughout 2017 across our range of market-leading platforms. We will launch voice search on Sky Q as well as broadcasting every Formula 1 race of the new season in UHD in the UK and Ireland. Our plans to roll out Sky Q to our other markets are also on track. Customers with our Sky+ box in the UK and Ireland will receive a number of new features, including personalised movie recommendations, a new search function making it even easier to find their favourite shows and entirely new ways to ‘Buy & Keep’ within Sky Store. In addition, in Italy we will launch our Sky Kids app and in Germany and Austria we plan to extend our streaming service, Sky Ticket, to more devices and platforms.

      We also have exciting plans in place to launch our Sky TV service in the UK without the need for a satellite dish for the first time, opening up the full Sky TV service to millions of customers who either currently don’t want or can’t have a dish installed. Launching in our next financial year and initially in the UK, this new broadband-based service will open up new headroom for growth. Over time, we will launch this service in our other markets, building on our position as Europe’s leading OTT provider.
      Our existing customers are at the heart of everything we do and this year we will recognise and reward their loyalty for choosing and remaining with Sky. This approach has already proved successful in Italy where churn has reduced and we will be using the learnings from this market to introduce new initiatives across the group, including launching the UK’s first tenure based loyalty programme in the spring. In addition, we will use our deep customer insights to ensure customers are on the right package to suit them and we will, in some cases, be upgrading customers to our latest equipment in order to give them the best Sky experience. There will be a range of rewards for all our customers from the very first day they join Sky and taken together we believe these plans will deliver tangible results.
      Finally, we will broaden our business further by launching our movie transactional service, Sky Store, in Germany and fully roll-out our targeted advertising service, Sky Adsmart, in Italy and Ireland.

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      Re: Sky results for the six months ended 31 December 2016

      Quote Originally Posted by speedyrite View Post
      But a note for any fellow shareholders...

      'As part of the terms of the proposed takeover by 21st Century Fox of Sky ("the Acquisition"), Sky will not pay any dividends in 2017'

      ... which is a bit of a shame really, as it has been the best performing UK share in terms of income production in my pension portfolio (beaten only by the US shares).
      That is the norm during a takeover period.
      With the increase in revenue sky have shown, the fox offer will possibly increase.

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      Re: Sky results for the six months ended 31 December 2016

      Quote Originally Posted by lettice View Post
      That is the norm during a takeover period.
      I already knew about this, but other people might have missed it though. And the deal may not conclude until late/end of 2017, if at all (some might say!)
      ++ speedyrite ... powered by Sky Broadband since 2007 ++

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      Re: Sky results for the six months ended 31 December 2016

      Last edited by lettice; 26-01-17 at 11:51 AM.

     

     

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