Broadcaster Sky on front foot despite takeover block

L Darroch says Sky News not ‘critical’ part of operation l New plug-in stick hastens end of satellite dishes

Satellite broadcasting giant Sky posted a 24 per cent hike in interim operating profit to £573 million in the final six months of 2017, fuelled by hit shows including Game of Thrones.

It comes after Rupert Murdoch’s 21st Century Fox was provisionally blocked by UK regulators earlier this week from buying the 61 per cent of Sky it does not already own.

Sky yesterday also launched a low-cost plug-in stick that will provide access to films and sport on any TV set – a move seen as a clear response to Netflix and Amazon products, and hastening the downgrade of the satellite dish.

The group said like-for-like revenues rose 5 per cent to £6.7 billion in the half-year, while underlying earnings lifted 15 per cent to £1.2bn.

Jeremy Darroch, Sky’s chief executive, said: “This performance reflects the investment choices we have made in recent years, allowing us to more than offset the pressure on consumer spending across Europe, as more customers continue to choose Sky for more of their services.”

The company, which operates in the UK, Ireland, Italy, Germany and Austria, said it would pay an interim dividend of 13.06p a share, on top of a special dividend of 10p. UBS analysts hailed the move as a “positive surprise”.

Sky News this week emerged as a major block to Murdoch’s bid to acquire Sky, given concerns about media plurality in the UK, where the media magnate also owns the Times, Sunday Times and the Sun.

But Darroch said the 24-hour Sky News channel was not as crucial a business for the company as it was when Sky launched in 1989.

He added: “I wouldn’t describe Sky News as critical to the business today – indeed I wouldn’t really pick any part of our business and say it is critical. If for any reason we didn’t have Sky News I don’t think that would be material, if you like, in terms of the direction of the business.”

Sky’s customer base stands at 22.9 million at the half-year end, having added 2,000 customers a day in the period.

The group also reported an 8 per cent hike in pay-as-yougo products sold, such as oneoff films and sporting events including through Now TV, at 20 million in the half-year.

Customer churn also improved, falling to 11.2 per cent from 11.6 per cent a year earlier.

Darroch said Sky expected the consumer environment to remain challenging, but the chief executive added that “we remain confident in our strategy”. Troubled toymaker Hornby has warned that poor Christmas trading will contribute to biggerthan-expected full-year losses. The firm, best known for its model railways and Scalextric car race tracks, said fewer discounts and late stock deliveries led to its festive sales coming in “below management expectations”. However, it also flagged major progress on a cost-cutting drive, reducing fixed overheads by £1.7 million. Shares in the firm closed down 9.3 per cent at 21.5p.