Sky ad revenue rises 2.7%

Sky has posted a 12% increase in operating profit as ad revenue climbed £14m, or 2.7%, over the past 12 months to £524m.

Sky ad revenue rises 2.7%

The pay TV broadcaster posted operating profit of £1.6m and a 7% rise in profit to £12m.

UK and Ireland revenue also grew 7% to £8.4bn and operating profit in the region increased 11% to £1.5bn.

There were 445,000 new customers over the past 12 months, and 93,000 in the fourth quarter. The broadcaster sold 31,000 TV products in Q4, bringing the total for the year to 2.3 million.

Sky said its churn rate was 11.2% – up from 9.8% this time last year. Media analysts Liberum said: "This is a proxy indicator for us that indicates that competition is increasing and the over-the-top services like Netflix and Amazon particularly in the UK are driving competition dynamics."

In an earnings call this morning, Jeremy Darroch, group chief executive, said that it was a "big year" for marketing as the company launched many new products such as Sky Q.

In terms of Brexit, Darroch explained that at times of economic uncertainty consumers are likely to "regress to their home" where he believes Sky offers a great entertainment product.

He added: "We’re on it but it doesn’t really change any of our direction."

Of the financial results, Darroch said: "Our deep insights into the needs of customers, along with our investments in brilliant programmes and technology, strong relationships with our partners and, above all, our desire to embrace change means that we continue to better serve our customers, and grow our business.

"Our ambition is to be the best customer-led entertainment and communications company in the world, delivering long-term benefits for all our shareholders."

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