BSkyB Sales Beat Estimates as Ways to Watch TV Expand

British Sky Broadcasting Group Plc, the U.K.’s largest pay-TV broadcaster, unveiled a box to link televisions to the Internet and said it will buy back 500 million pounds ($770 million) of shares as full-year sales grew.

Revenue for the year rose 7 percent to 7.24 billion pounds. That beat the 7.19 billion-pound average estimate, according to data compiled by Bloomberg. Earnings before interest, taxes, depreciation, amortization and some items in the year ended June 30 rose 8 percent to 1.69 billion pounds, the Isleworth, England-based company said in a statement today.

BSkyB relies on exclusive sports broadcasts and premium movie channels to retain and win subscribers. The company has 14.8 million retail and wholesale customers, a 3.9 percent increase from the year prior. BSkyB, about 39 percent owned by Rupert Murdoch’s 21st Century Fox, unveiled its NOW TV set-top box to connect a TV wirelessly to the Internet, in a bid to reach millions of U.K. homes that don’t have a pay-TV service.

“The strength of our financial performance is a result of our successful transition to more broadly-based growth and sustained investment,” Chief Executive Officer Jeremy Darroch said in the statement. The “consumer environment” would remain challenging in the next year, he said.

The shares fell 1.9 percent to 833.50 pence as of 8:17 a.m. in London. BSkyB’s market value is 13.3 billion pounds.

Dividend Increase

BSkyB said today it was also increasing its full-year dividend 18 percent to 30 pence a share.

The company, which offers TV, Internet and phone service separately or bundled together, said customers are taking an average of 2.8 paid-for products from Sky and average revenue per user rose 29 pounds in the year to 577 pounds.

BSkyB is facing tougher competition on several fronts. BT Group Plc, the biggest fixed-line phone company in the U.K., unveiled sports channels in May free for BT broadband customers. BT said yesterday some 500,000 households have ordered BT Sport, set to debut on Aug. 1.

BSkyB has fought back, bringing on David Beckham to star in a new Sky Sports ad campaign. It will also broadcast matches on the first day of the Premier League’s soccer season next month free to customers who don’t subscribe to its sports channels already.

U.S. streaming service Netflix Inc. and Inc.’s European movie Lovefilm are also edging into BSkyB’s home country.

“We’ve seen an explosion in on-demand and mobile viewing as more people connect their Sky boxes to broadband and watch TV on laptops and mobile devices with Sky Go,” Darroch said.

Sky Go Extra, the company’s subscription service where users can watch Sky on their mobiles and laptops, had 166,000 customers at the end of the year, five months after it started. BSkyB also reported a “fivefold” increase in on-demand downloads, it said.

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