Pay TV operator BSkyB says it is taking a hit of almost £1 billion sterling to write off its stake in Germany's troubled Kirch business.
BSkyB, controlled by Mr Rupert Murdoch's News Corp, said today it was washing its hands of its KirchPayTV stake, sending its shares 4 per cent higher over investors relief it did not plan to throw any more money at what has been a costly German adventure.
The satellite TV operator said it made a pre-tax loss of £1.253 billion in the six months to end-December after a £985 million charge for the KirchPayTV investment.
The group also cheered investors with news it was now generating positive free cashflow, while first-half operating profit before goodwill beat expectations at £70 million against a previous £50.6 million, and forecasts of £61 million-£65 million.
BSkyB said average revenues per user rose to £331 at the end of December, 11 per cent up from the previous quarter, while total revenues rose 22 per cent to £1.32 billion.
Net digital subscribers rose to 5.716 million at the end of December, a net gain of 218,000 in the quarter, well on the way to the group's target of seven million subscribers by end 2003.
Advertising revenues fell 12 per cent to £118 million but only account for 10 per cent of total revenues.
Churn, or the cancellation rate, remained stable at 10.4 per cent, well below the 20 per cent average for British cable operators NTL and Telewest.