Strong demand for broadband lifted first-half profits at bid target BSkyB by 26 per cent, showing why Rupert Murdoch's News Corp is keen to secure its takeover deal without delay.
News Corp has offered to buy the 61 per cent of BSkyB it does not own and faces a six-month competition probe if it cannot allay fears that such a move will give too much control over public opinion to Mr Murdoch.
It already owns British national daily newspapers the Sun and the Times, and national Sunday newspapers the Sunday Times and the News of the World.
As BSkyB consistently posts strong results, analysts say the pressure will only increase for News Corp to up its bid.
BSkyB, one of the most successful pay-TV groups in Europe, is adding new customers at a heady rate and selling them an increasing number of products, while reaping the benefits from an investment cycle and cost-saving programmes.
Today it reported first-half adjusted operating profit of £520 million (€602.4 million), compared with a poll forecasting £500 million, and revenue up 15 per cent to £3.2 billion, also slightly ahead of forecasts.
"The business has delivered a half year of outstanding performance, with record product sales and strong double-digit growth in revenue, profit and cash flow," chief executive Jeremy Darroch said in a statement.
"In recognition of the growing strength of the business, we are increasing the interim dividend by a further 11 per cent, the seventh consecutive year of growth."
In the three months to the end of December, it added 140,000 net new subscribers, towards the lower end of forecasts, as it passed the 10 million customer mark. It sold 343,000 new high-definition TV packages and 204,000 broadband packages, its strongest broadband growth for more than two years.
The strong demand meant customers were on average paying a record £541 per year. Only 9.5 per cent of them left on an annualised basis, which was better than expected.
The results underline the need for Murdoch to secure his deal as soon as possible.
The government is considering unspecified proposals put forward by News Corp to alleviate competition concerns before deciding whether to refer the proposed deal for a full, six-month competition inquiry.
News Corp has offered to pay 700 pence per share for BSkyB but the Sky independent directors are looking for more then 800 pence. Shares in the group closed at 757.50 pence yesterday.
Reuters
