British Sky Broadcasting, the satellite operator in which Mr Rupert Murdoch's News Corporation has a 40 per cent stake, posted another round of losses today in its ambitious digital drive.
However the company signalled the worst was over saying the business was set to deliver positive cashflow by the end of the year.
BSkyB said it had signed up 940,000 new subscribers in the financial year just ended, taking the total to 5.45 million, including 5.3 million for its digital service.
After a long period of heavy investment in its digital service, pre-tax losses widened to 214 million pounds sterling ($303.6 million) before goodwill and exceptionals, compared to a previous 127.9 million and analyst forecasts of 201-232 million.
But operating profit rose to 160 million pounds from a previous 85 million, as new subscribers boosted revenues to 2.3 billion pounds, 25 per cent higher than the previous year.
"The company is over the hump of digital investment, costs are flattening whilst revenue is marching ahead and the core pay-TV business posted another quarter of strong growth in profitability", said Simon Baker, analyst at SG Securities.
BSkyB shares, which have fallen around 40 per cent since the start of the year, inched 0.15 per cent higher to 677 pence on the London markets this morning after initially jumping two per cent.