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Last Updated: Friday, 27 July 2007, 06:58 GMT 07:58 UK
Broadband launch hits Sky profits
James Murdoch, Chief executive, BSkyB
BSkyB's boss says he is laying the foundations for future growth
Satellite broadcaster BSkyB has reported a fall in profits as a result of investment in services such as broadband and telephone land lines.

Pre-tax profits for the year to June fell 9% to 724m. Sky says its profits "reflect investment for future growth".

Sky Broadband reported a net operating loss of 169m, but signed up 716,000 new subscribers.

BSkyB's operating profit fell 7% to 815m, but that was still better than analysts had been expecting.

BSkyB released its subscriber numbers earlier this month, which showed that subscribers had grown 406,000 to 8.58 million.

The growth was partly as a result of the row that led to some Sky channels being unavailable to Virgin Media.

Dividend increased

Wholesale subscription revenue, which is the money it receives from other broadcasters that show its channels, fell 16m.

Despite falling profits, Sky is increasing its dividend by 27% to 15.5 pence per share.

Chief executive James Murdoch said that the dividend growth reflected the company's confidence in the future.

"We are well placed to capitalise on the significant opportunities available to us," he said.


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