Subscriber boost lifts BSkyB

Europe's biggest pay TV channel BSkyB has turned in solid full-year results, lifted by strong growth in advertising sales and subscriber numbers.

The satellite broadcaster said pre-tax profits before charges for the 12 months to late June came in at £260m ($416m), up from a loss of £22m one year earlier.

It was the first time the firm, 36% owned by Rupert Murdoch's News Corporation, had reported an annual pre-tax profit in five years.

Total sales were also up, climbing 15% on the year to £3.18bn.

With only half of households signed up to digital television, there is still plenty of growth potential in the UK BSkyB CEO Tony Ball

BSkyB said its improved performance reflected continued strong growth in subscriber numbers, with a further 133,000 viewers signing up between April and June this year.

The increase brought the total subscriber base to 6.8m, just shy of the 7m target BSkyB has pledged to reach by the end of 2003.

In a sign that BSkyB's subscription-only sport and movie channels remain popular with viewers, the churn - the rate at which subscribers drop out - fell to 9.4% from 10.4% one year earlier, well below the drop-out rate at rival pay TV firms.

EU competition concerns

BSkyB added that it had bucked gloomy trends in the advertising market, with total advertising sales climbing 13% compared with last year to £284m.

Sky Digital services are as popular as ever

BSkyB chief executive Tony Ball pledged further expansion in the months ahead.

"With only half of households signed up to digital television, there is still plenty of growth potential in the UK," he said.

BSkyB is expected to consolidate its position as Britain's top pay TV channel thanks to a new £1bn deal giving it exclusive rights to broadcast live English Premiership football matches for three years from the start of the 2004/05 season.

BSkyB's existing three year Premiership broadcast deal, which expires at the end of the current football season, is a key element of the channel's appeal to viewers.

The company said its screening of match between top-ranked Premiership clubs Manchester United and Arsenal in April this year attracted a near-record audience of 3.8m viewers.

However, BSkyB's new Premiership deal could yet fall foul of European Union regulators, who have asked for assurances that the bidding process for the broadcast rights was competitive.

BSkyB shares were down 16p, or 2.2%, at 708p in late afternoon trade in London.