Business

Sky profits up as takeover battle rages

Sky has reported a rise in annual revenues, profits and customer numbers, and sought to underline its growth prospects as a £26bn bidding war between two American suitors approaches its conclusion.

The home and mobile entertainment and communications company, which owns Sky News, said that statutory operating profit in the year to June rose by 7% to £1.034bn.

Earnings before interest, tax, depreciation and amortisation were up 9% to more than £2.3bn.

Sky plc said that revenue had risen for the 29th consecutive year, with like-for-like revenue up 5% to £13.6bn.

Sky's CEO Jeremy Darroch explains the company's aims in terms of reducing the amount of plastic entering the world's oceans
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Sky’s chief executive Jeremy Darroch says a focus on customers has driven the company’s performance

The results, which are likely to be Sky’s last annual figures as a standalone company, also showed ‎a 39% growth in customer numbers and 81% growth across its product portfolio, which includes home and mobile telecoms, and fast broadband.

Sky said its UK television churn figure, which accounts for the number of customers whose subscriptions lapse, had fallen to its lowest level in a decade.

The company, which also operates in European markets such as Germany, Ireland and Italy, said its original content unit had performed strongly, with Patrick Melrose, a drama series starring the actor Benedict Cumberbatch, sold to 60 territories before it had even aired.

Sky also sought to focus on its record of technological innovation, with a new hands-free, voice-activated service for its Sky Q platform to be developed over the next 12 months.

Sky Q Multiscreen, watch around the home
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Sky Q is the company’s premier content platform

Jeremy Darroch, Sky’s chief executive, described it as “an exceptional year”, adding: “Our strong performance reflects the execution of our strategy over an extended period of time, driving sustained growth in revenue, profits and shareholder returns.

“We do this by providing our customers more of the best content, world class innovation in products and services, combined with industry leading front-line service.

“Together with an increasingly agile and efficient organisation, we are able to deliver for shareholders whilst ensuring the customer experience is better than anywhere else.”

Comcast said its bid came with a series of legally binding commitments on Sky ownership and UK investment
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Comcast says its Sky bid comes with a series of legally binding commitments on ownership and UK investment

The announcement of Sky’s annual results comes amid a full-blown takeover battle involving 21st Century Fox and Comcast, the owner of Universal Studios.

Comcast said earlier this month that it would pay £14.75-a-share for Sky, valuing the company at £26bn.

Its offer trumped a bid tabled just hours earlier from Fox, which had offered £14-a-share for the 61% of Sky that it does not already own.

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Fox, which is in the process of selling most of its entertainment assets to Disney, must now decide whether to return with an improved bid.

The rival offers have escalated into a bidding war following the Government’s decision to clear a takeover of Sky by Fox, subject to Sky News being spun off into separate ownership.