UK TV broadcaster Sky's earnings surge

Subscriber numbers grew by more than 500,000 to 23 million as Comcast and 21st Century Fox fight for control of the group

Sky television centre in Milan. The company is in a good position, says its chief executive, amid a takeover battle. AP

UPDATE:

Comcast is reporting a stronger than expected second-quarter profit even as it struggles to keep cable TV subscribers, according to AP.

Earnings reported Thursday were $3.22 billion, or 69 cents per share. Earnings, adjusted for non-recurring gains, were 65 cents per share, which, according to a survey by Zacks Investment Research, was 4 cents better than expected.

Revenue was $21.74vn in the period, just short of expectations.

Comcast, based in Philadelphia, lost 140,000 cable TV subscribers during the quarter.

Sky's annual net profits have jumped 17 per cent, the pan-European television broadcaster said on Thursday, as US media giants Comcast and 21st Century Fox battle for control of the group.

Sky's profit after tax increased to £815 million (Dh3.95 billion) in the 12 months to June 30, compared with its 2016-17 financial year.

Subscriber numbers grew by more than 500,000, to 23 million, helping to lift revenue by 5 per cent to £13.6m, AFP reported.

"It's been an exceptional year. We've delivered another set of strong results," Sky chief executive Jeremy Darroch said in the earnings statement.

"Our strong performance reflects the execution of our strategy over an extended period of time, driving sustained growth in revenue, profits and shareholder returns," he added.

Lee Wild, head of equity strategy at Interactive Investor, said Sky had shown just why Fox and Comcast were fighting tooth and nail for control of the satellite broadcaster.

"These numbers and a bullish plan for further aggressive growth in the current financial year are clearly presented to squeeze the maximum from potential buyers," he told Reuters. "It could work."

Cable giant Comcast recently raised its bid for Sky to £26m, shortly after Rupert Murdoch's 21st Century Fox hiked its own offer to value the prized company at £24.5mn.

Sky's "share price is still trading around 30 pence above Comcast's £14.75 bid price, so investors clearly believe a better offer will be forthcoming from Fox", Laith Khalaf, senior analyst at stockbroker Hargreaves Lansdown said on Thursday.

Fox – and by proxy Disney – has until August 9 to increase its bid for Sky, a move that could cause British regulators to trigger an auction procedure.

Traditional media giants are looking to beef up their creative offerings to compete with Netflix and other streaming services, AFP said.

Sky's jewel in the crown is its live coverage of English Premier League football, while the company provides also broadband internet and telephone services.

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Analysts say Comcast is favourite to win Sky after it recently dropped out of a bidding war with Disney for prized film and television operations of 21st Century Fox.

Comcast itself has said it would now focus on acquiring Sky.

However, 21st Century Fox is not expected to just sit back, after the UK government earlier this month cleared the way for Mr Murdoch's group to take full control of Sky having agreed to address media plurality concerns.

Fox's long-running pursuit for the 61 per cent of Sky it does not own had been plagued by government concerns also over broadcasting standards – and the influence of Australian-born US citizen Mr Murdoch.

Critics argued that allowing Mr Murdoch – who owns major British newspaper titles The Times and The Sun – full control of Sky News would give him too much influence in the UK news business.

To remedy this, Fox has proposed to sell the rolling TV news channel to Disney should it win full control of Sky.

“This business has got really good momentum,” Mr Darroch said, according to Bloomberg.

“Whatever the future holds for any of us, Sky is in a really good place.”