Satellite broadcaster BSkyB has unveiled strong growth in annual profits after adding 83,000 subscribers in the three months to the end of June. The improvement took the company's direct-to-home (DTH) digital subscriber base to 7.8m, as it said it remained on track to achieve a target of 8m users by the end of the calendar year.
BSkyB said turnover in the 12 months increased by 11% to £4.05bn while operating profits before exceptional items rose by 34% to £805m, better than the £760m forecast by some analysts in the City.
Chief executive James Murdoch said the results demonstrated the health of the business and the strong position it holds in the market place.
He added: "In a highly competitive environment, we are confident in our ability to achieve our goals."
BSkyB said the latest subscriber additions reflected the benefit of a number of strategic initiatives, including the 'What do you want to watch?' marketing campaign launched in October 2004.
The promotional push meant marketing costs grew by £119m to £515m for the year—equivalent to 13% of total revenues.
BSkyB also bettered City expectations on the average amount spent per customer, which it said improved in the quarter by £2 to £384.
The improvement came after the number of customers taking its multiroom service more than doubled over the year to 645,000, and the broadcaster screened a greater number of pay-per-view events. The number of households taking Sky's personal video recorder service, Sky+, increased by 118,000 in the quarter to 880,000.
BSkyB said its programming costs decreased by £75m on a year earlier to £1.64bn, as it benefited from savings achieved in the renewal of sports contracts. Sport accounts for 46% of total programme costs.
In June, Sky announced a simplified pricing structure that includes six "genre-mixes", allowing customers to select various combinations of basic-tier channels alongside premium sports and movies.
And churn—the percentage of subscribers that leave the company each year—was in line with a year earlier at 10.5% in the fourth quarter, down from 11.1% in the previous three-month period.
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