Sky Beats Forecasts With Strong UK Growth

The UK's biggest pay-television company underlined continuing growth opportunities in its home market on Wednesday with a strong set of half-year results.

Sky plc (Other OTC: BSYBF - news) , the owner of Sky News, said that adjusted operating profit in the six months to December 31 rose by 16% to £675m, with revenue up 5% to just over £5.6bn.

The performance beat City forecasts, and featured a number of notable achievements, including Sky's highest customer growth in nine years and the addition of 1m product sales, the highest level for four years.

Sky, which has just launched Fortitude, the most expensive drama it has ever produced, also said that new revenue streams such as its Sky Store on-demand service had performed well.

Last year, the company struck separate deals costing around £7bn to acquire control of its namesake operations in Italy and Germany.

It said that growth in Germany had hit a record level with 214,000 new customers and the highest growth in 12 quarters in Italy.

Jeremy Darroch, Sky's chief executive, said the results represented "an excellent operational and financial performance".

"The strength of our performance in the UK and Ireland (Other OTC: IRLD - news) shows that our approach to segmenting the market with the complementary Sky and NOW TV brands is working," he said.

"Across the board, customers are responding to our investment in more high-quality TV and innovative new services.

"This has resulted in the highest customer growth in nine years, the highest total product growth in four years and the lowest churn in a decade."

Since the end of 2014, Sky has announced a partnership with Telefonica Europe that will allow it to offer mobile voice and data services to customers.

Those services are expected to launch next year.

More immediately, Sky faces a crucial test of its ability to retain its position as the leading broadcaster of live Premier League football.

An auction of seven packages of matches for the three years from 2016-17 is scheduled to get under way on Friday.

BT, the other incumbent rights-holder, and Discovery Communications (NasdaqGS: DISCA - news) , which has a controlling stake in Eurosport, are also expected to bid.