Sky Profits From Surge in U.K. and Europe Customer Numbers

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Sky Plc signed up 242,000 customers in the third quarter, a 70 percent increase on a year earlier, helped by demand for its NOW TV Internet service. The shares rose the most since October 2013.

Rupert Murdoch’s European pay-TV provider said in a statement Tuesday that nine-month sales rose 5 percent and operating profit 20 percent, boosted by the surge in customer numbers across Europe.

In the U.K. and Ireland customer numbers expanded 41 percent, the highest third-quarter growth in more than a decade.

The company does not break down how many customers pay for full subscriptions and how many for cheaper products such as NOW TV, though customer growth for the on-demand British service increased 30 percent year-on-year. Hit shows such as “Game of Thrones” are helping lure customers.

Sky also benefited after buying control of pay-TV providers in Italy and Germany from Murdoch’s 21st Century Fox Inc. in November. Germany and Austria had record customer growth and Italy’s third-quarter performance was the best in three years, although most of the company’s profit still comes from the U.K. and Ireland.

“Sky has delivered a bumper quarter of consumer growth in the third quarter,” said Alex DeGroote, a media analyst at Peel Hunt Research in London. “To date the integration is going ahead of expectation even if there are still challenges ahead.”

The stock was up 4.9 percent at 1,103 pence at 9:23 a.m. in London.

The company said Tuesday it will start offering a similar online streaming box to NOW TV in Italy this quarter. In the U.K. and Ireland, Sky recorded more than 300 million on-demand downloads during the third quarter, a rise of 63 percent.

Nine-month sales were 8.45 billion pounds ($12.6 billion), up from 8.05 billion pounds a year earlier, the Isleworth, England-based company said. Operating profit in the same period through March was 1.03 billion pounds, a 20 percent increase year-on-year.

Sky, along with its peer BT Group Plc, agreed in February to pay a record 5.14 billion pounds ($7.66 billion) for the U.K. rights to broadcast live English Premier league soccer, as it looks to continue its long-standing dominance of the British pay-TV market. The auction total compares to the 3 billion pounds paid for the previous three-year package. Sky will pay 1.39 billion pounds a year for the franchise from 2016, while BT will pay 320 million pounds a season.

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