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Original Source: FD (FAIR DISCLOSURE) WIRE
. James Murdoch, British Sky Broadcasting Group plc, CEO . Jeremy Darroch, British Sky Broadcasting Group plc, CFO . Larry Havarti, Gameco, Analyst . Tom Eagan, Oppenheimer and Company, Analyst . Mark Moore, Brookside Capital, Analyst . Adam Spielman, PPM American, Analyst . Peter Tully, CDP Capital, Analyst
BSY.L reported that total revenues for the nine months ended 03/31/06 grew by 9% to 3.1b pounds. EPS for the nine months ended 03/31/06 increased by 16% to 23.2 pence.
A. Key Data From Call 1. Total revenues for the nine months ended 03/31/06 = 3.1b pounds. 2. EPS for the nine months ended 03/31/06 = 23.2 pence. 3. Operating profit for the nine months ended 03/31/06 = 660m pounds. 4. Operating profit margin for the nine months ended 03/31/06 = 21%.
S1. 3Q06 Business Performance (J.M.) 1. Highlights: 1. BSY.L reported a record operating profit of 660m pounds and incredible performance in terms of improvement in product mix. 1. 86% growth in Sky+. 2. 76% growth in Multiroom households to almost a 1m. 1. Since the end of 3Q06, the Co. has 0.5m customers taking a Multiroom product from BSY.L. 2. Three Major Projects: 1. BSY.L noted that the Co.'s focus for 1H of calendar year would be on three major projects that would support and will position the business for future growth. 2. The Co. completed the implementation of its new customer management systems. 1. These systems represent a commitment to improve the Co.'s already industry leading customer service and will allow it to continue to raise the bar in terms of this service, which is a critical differentiator for BSY.L against its competitors. 1. It will allow the Co. to bring new products to market faster and more effectively, and to improve sales,
increase the marketing effectiveness, and decrease churn to the use of state-of-the-art customer management initiatives and BSY.L's robust prospect database. 2. BSY.L announced plans to expand its customer service infrastructure. 1. This includes creating 600 new jobs that are field engineering operations. 3. These decisions will support continued growth of the business and the launch of new products and services. 3. The Co. reported that it has gotten ready for the national launch of high definition (HD) television in the UK. 1. Sky high def will redefine the mid-to-high end of television services in the UK and Ireland and is the first national
launch of a service of its kind. 2. BSY.L commented that it is pleased with the early demand and thinks that desire to subscribe to HD will build strongly throughout the calendar year. 4. Broadband plans are well on track. 1. The Co. expects to launch residential broadband services this summer. 3. Other Highlights: 1. The business continued to grow and is performing in line with the plans the Co. laid out for calendar 2006. 1. Total revenue was up 9% to 3.1b pounds. 2. Operating profit increased by 15% to 660m pounds. 3. EPS increased by 16% to 23.2 pence. 4. BSY.L expects subscriber growth to be around 100,000 for 1H of calendar year 2006 and net additions of 40,000 for the qtr., is in line with the plans. 2. Customers continued to demonstrate a strong appetite for additional products and services. 1. The Co. is pleased with the performance of products like Sky+ and Multiroom in 3Q06.
2. 20% of BSY.L's customers now take more than one service from
it and Sky+ was sold to 149,000 units in 3Q06. 3. The Co. exceeded more than 1m Multiroom customers.
S2. Financial Review (J.D.) 1. Financial Performance for the Nine Months through 03/31/06: 1. Total revenues grew by 9% to 3.1b pounds.
1. This was mainly driven by an 8% increase in DTH revenues,
following 5% growth in the subscriber base and a 3% increase in ARPU. 2. Advertising revenues continued to grow strongly and were up 6% against a market that was down 0.6% YonY. 3. Other revenues grew by 43% mainly due to the first time consolidation of the Easynet business. 4. The strong growth in revenues combined with a programming cost base that reduced by 3m pounds in absolute terms led to 4 percentage point increase in GM to 61% of sales.
5. Marketing costs and other expenses increased by an 182m and
that was mainly behind higher acquisition, upgrade volumes,
and the inclusion of two first-time items: 1. Consolidation Easynet expenses, which totaled 49m. 2. An additional depreciation charge of 26m pounds, mainly relating to the first six months depreciation of BSY.L's new customer management systems. 6. Operating profit grew by 15% to a record 660m pounds and that generated an operating profit margin of 21%. 7. EBITDA was 756m. 8. After working capital outflow of 60m pounds, which mainly related to the phasing of rights payments in sports and Sky One, the Group generated a cash inflow from operations of 696m pounds. 9. After adjusting for cash outflows, which principally comprised taxation, …