Sky continues to push the limits
A RAFT of original dramas including Arctic thriller Fortitude and Italian political drama 1992 have helped Sky to beat City expectations for its full-year figures.
The UK broadcaster, which recently bought Sky Deutschland and Sky Italia, said it has now reached a record 12m customers.
That helped drive a 48pc rise in pre-tax profit to £1.5bn from £1bn.
The more meaningful underlying profit figure, which strips out the distorting effect of earnings from the newly acquired European businesses, showed a 6pc rise to £1.1bn. On the same basis, underlying sales increased to £11.2bn from £10.7bn.
Shares in the business rose yesterday to close up 8p to 1132p.
Chief executive Jeremy Darroch said: ‘It’s clear that the steps we have taken to broaden our business are paying off.
‘The past 12 months have been an outstanding period of growth for Sky. We’ve successfully completed a deal that has transformed the size and scale… for the business.’
Sky attracted almost 1m new customers over the year, 45pc more than the year before.
Its UK and Irish business, which is seen as the template for the rest of the group, was particularly strong.
Sky’s TV strategy is to make or buy shows which can’t be seen anywhere else – such as Game Of Thrones, which launched its fifth season this year – thus forcing customers to pay to watch them.
It broke through the 12m milestone in the UK with the highest growth in 11 years and exceeded 38m in paid-for subscriptions.
But because the company does not break down the figures, it is impossible to tell how many of those have taken out monthly NOW TV, which can be cancelled at any time, rather than longer and more lucrative yearlong contracts. The number of customers leaving Sky was also at the lowest level for 11 years.
Darroch attributed this increased loyalty to more customers taking out additional services, such as broadband and pay-per-view items. This triggers larger discounts and makes customers less likely to switch suppliers.
He said the increase in customers is a direct result of investments made in high-quality content.
It has benefited from selling the rights of its home-grown productions around the world.
Fortitude and 1992 launched simultaneously across five territories.
Sky has commissioned new dramas including The Last Panthers, Cool image: Dramas such as Fortitude have buoyed Sky despite its loss of Champions League football coming in the autumn, and The Cup tournaments after paying Young Pope, a co-production with £897m. America’s HBO and Canal+. It has also targeted the pay-TV
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