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Satellite television giant British Sky Broadcasting Group PLC (BSY.LN) Wednesday posted a rise in revenue and profit for the nine months ended March 31, driven by new customers and demand for its broadband and phone products, and said its Internet streaming service, Now TV, is on track to launch in the first-half of 2012.
BSkyB--which counts Virgin Media Inc. (VMED) and BT Group PLC's (BT.LN) BT Vision as its two biggest competitors--booked a 30% rise in net profit to GBP689 million for the nine months ended March 31 from GBP581 million a year earlier, helped by higher revenue and a break fee from News Corp. (NWS) for its failed takeover.
Operating profit before exceptional items, a measurement of how the main business is performing, rose 15% to GBP908 million for the nine months ended March 31, slightly above market expectations of GBP902 million. That compares with GBP790 million over the same period a year earlier.
BSkyB added 326,000 new customers in the nine months, up 3.2% from a year earlier, taking its total subscriber base to 10.6 million.
While the company didn't provide third-quarter financial numbers, it did release some operational indicators. The group signed 78,000 new customers in the third quarter,
Revenue rose 5.1% to GBP5.08 billion in the nine months to March 31 from GBP4.83 billion, in line with market expectations. Average revenue per customer rose 1.7% to GBP546.
News Corp.'s (NWS) bid to take full control of BSkyB collapsed last July following revelations of phone hacking at News Corp.'s now-defunct U.K. tabloid, News of the World. News Corp. is BSkyB's biggest shareholder with a 39.1% stake. It also owns Dow Jones & Co., publisher of this newswire and of The Wall Street Journal.
BSkyB is highly cash generative because of its large number of customers lured by its live coverage of the English Premier League Football and new movies. But customer growth is starting to slow as competition heats up in a tough economic environment. As a result, management are focused on getting existing customers to take more of their products, such as high definition TV and 3D.
The stock has fallen 18% over the past 12 months on concerns over the U.K. communication regulator Ofcom's investigation into whether News Corp. is a "fit and proper" owner of BSkyB, which could lead to the media giant having to selling down its stake in BSkyB. Another worry is the cost of extending its rights to broadcast live coverage of the bulk of the English Premier League soccer matches, a core offering on its pay-TV channels that it can't afford to cede to rivals. The result of an auction for the rights over the next three years is expected in June.
BSkyB shares closed at 691 pence Tuesday, valuing the company at GBP11.73 billion.
-By Lilly Vitorovich, Dow Jones Newswires; 44-0-207 842 9290; email@example.com