BSkyB reports 1bn pre-tax profits
BSkyB revenue up 16% as company announces 750m share buy-back scheme to appease angry investors
BSkyB has reported pre-tax profits of 1bn in the year to the end of June, as the company announced a 750m share buy-back to appease investors unhappy after the failure of News Corporation's bid to takeover the satellite broadcaster.
BSkyB, which also announced on Friday that it has partnered with the BBC for the live rights for Formula One from 2012 to 2018, said that News Corporation will participate in the share buy-back programme but that its 39.1% stake in Sky will remain unaffected.
This means that News Corporation investors will benefit from the buy-back programme to the tune of 293m.
BSkyB reported a revenue increase of 16% to 6.6bn in the year to the end of June. The company also reported that earnings before interest, tax, depreciation and amortisation were up 19% to 1.4bn, healthily beating analyst expectations of close to 1bn.
The company also announced a 20% rise in the full year dividend to 23.28p, and a final dividend of 14.54p a total cash payment of 253m.
"This has been a year of outstanding operational and financial results for Sky," said James Murdoch, who held onto his role as chairman after a board vote on Thursday despite criticism of his handling of the News of the World phone hacking scandal.
Jeremy Darroch, the BSkyB chief executive, said that there had been a full discussion across governance at the board meeting and that there was unanimous agreement backing Murdoch.
However, he added that the board would keep a "watching brief" on the development of the phone hacking inquiry.
"The issues around News of the World were appalling and unacceptable there are a number of inquiries going on and they will establish the facts," he said. "[The] board will have a watching brief on all aspects of our business, including externally."
The composition of BSkyB's board has been criticised by some investors who argue that New! s Corpor ation wields too much influence and that a significant number of members should be changed.
BSkyB said that two directors, Allan Leighton and David Evans, would retire later this year.
"Two is the start," said Darroch, when asked on a call with journalists about further potential board changes. "We will commence with that. There will be more through and other changes as directors rotate off after that. We want the first couple under our belt first."
Despite indicating something of a shake-up, Darroch denied that there was too much influence from News Corporation in the make-up of the board of directors.
"The majority of the board are independent directors, in terms of voting they control the board," he said.
BSkyB said that the buyback was roughly 50% bigger than its previous capital return programmes in 2005 and 2006, which totalled 950m.
The company's full-year operating profits rose 23% to 1.07bn, the first time in its history the company has cracked the 1bn mark and clear evidence of why Rupert Murdoch had been so keen to snap up the 60% stake in BSkyB he did not already own.
Comments