British Sky Broadcasting said this morning that its first-half pre-tax losses bulged to £112 million, and the UK pay-TV operator plans to write off £25 million linked to new media investments.
BSkyB, which is 37.5% owned by Rupert Murdoch's News Corp, said its direct subscriber sales jumped to 5.25 million as of February 6, while total subscribers, including those from rival cable operators, reached 9.75 million.
Britain's largest and Europe's second biggest pay-TV operator reported growth in its core business with operating profit rising to £50.6 million from a previous £28 million, in contrast to pre-tax losses which expanded from £61.5 million. Revenues rose 28% to £1.086 billion.
Analysts had forecast pre-tax losses of as much as £133 million while operating profit was seen somewhere in a range between £32 and £54 million. Analysts had widely expected a write-off for Internet losses and showed little concern at such a move, given it is only an accounting measure.
BSkyB said its revenue per direct-to-home subscriber rose to £286 million, level with the previous quarter but up from £281 million in the same period last year. The company aims to eventually raise its revenue per subscriber to £400.
Churn, which measures the percentage of subscribers that leave the service, remained flat on the previous quarter at 9.8%. Analysts say BSkyB's churn could rise this year due to increase competition and price rises it has made.
On its interactive ventures, BSkyB said two thirds of its 4.7 million digital subscribers used its interactive TV service Open, making over 30 million connections during the period. It said there were also 1.3 million registered email accounts. BSkyB said Sky Interactive had revenues of £37 million including £33 million of betting revenues.
On its associates, BSkyB said Germany's KirchpayTV posted a pre-exceptional loss for the period of £46 million and had 2.3 million subscribers at the end of December, including 1.9 million for its digital service.
By the end of December, BSkyB's subscribers had risen to 5.051 million, beating its target of five million by year end.
