Sky First-Half Sales Advance on Strength in U.K. and Ireland

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Sky Plc, the European pay-TV provider controlled by Rupert Murdoch, said first-half revenue rose 17 percent as it attracted more television and broadband customers in the U.K. and expanded in Italy and Germany.

Sales increased to 4.3 billion pounds ($6.5 billion) in the six months through December from 3.67 billion pounds a year earlier, the London-based company said in a statement today. Sky added 493,000 customers in the second quarter, bringing the total to more than 24.8 million.

Sky has subscribers in five European countries after buying control of pay-TV providers in Italy and Germany from Murdoch’s 21st Century Fox Inc. in November. There was a group-wide reduction in churn, or customers leaving, with the annualized rate at 9.2 percent for the U.K. and Ireland in the second quarter, the best performance since 2003, even amid competition from rivals including BT Group Plc.

“Alongside our continued strength in the U.K. and Ireland, the acquisition of Sky Italia and Sky Deutschland gives us an expanded opportunity for growth,” Sky Chief Executive Officer Jeremy Darroch said in the statement. “Both businesses had a strong quarter, Germany posting its highest ever customer growth and Italy showing resilience with good customer growth in a challenging economic environment.”

Sky shares rose as much as 3.3 percent and were up 2.1 percent at 962.5 pence as of 8:25 a.m. in London.

First-half adjusted operating profit climbed 16 percent to 675 million pounds, Sky said in the earnings statement, which is the first to include results for the acquired units.

Sky said last week it will also offer bundles with mobile-phone service in the U.K. from 2016 as it fights competitors including BT, which is buying the country’s biggest wireless operator, EE.

Soccer Auction

“Sky’s first-half looks fractionally ahead of expectations,” said Alex DeGroote, a media analyst at Peel Hunt Research. “The reduction in churn to 9.2 percent is possibly the main highlight” but there are risks ahead in terms of costs for Premier League soccer rights, he said.

Former U.K. phone monopoly BT said this week that it signed up a net 119,000 retail broadband customers during its most recent earnings quarter, with the lure of free access to soccer and rugby games on its BT Sport channels.

Sky, BT and Discovery Communications Inc. are now in the bidding process for TV rights for three seasons of English Premier League soccer, with offers due Feb. 6.

The last auction in 2012 saw BT and Sky pay a record 3 billion pounds for rights for three years, 70 percent more than the previous round.

The current sale comes amid a probe by U.K media regulator Ofcom into complaints by cable-TV provider Virgin Media Inc. that the process breaches competition law and drives up prices for consumers.

Sky announced yesterday that it won a five-year contract to televise golf’s British Open live on its Sky Sports subscription channel, ending the event’s 60-year relationship with the British Broadcasting Corp.