Sky released strong results for the year ending 30 June. The company reported a five per cent increase in group revenue to £11,283 million and an 18 per cent increase in operating profit to £1,400 million. In the UK and Ireland customer numbers passed the 12 million mark and the period saw the highest ever customer growth in Germany and Austria.
Sky secured a number of significant rights deals over the last year and launched homegrown dramas Fortitude (pictured) and 1992 across all five territories simultaneously. It looks like this push into original content is set to continue: the group is planning 35 original dramas in the next three years.
“The past 12 months have been an outstanding period of growth for Sky. We’ve successfully completed a deal that has transformed the size and scale of opportunity for the business whilst delivering an excellent financial and operational performance as more customers chose Sky and took more of our products,” commented Jeremy Darroch, CEO.
“It’s clear that the steps we have taken to broaden out our business are paying off. By distributing our content over multiple platforms and launching new products and services, we are now able to offer something for every household.”
An ‘outstanding’ performance in the UK and Ireland, Sky said, was ‘at the heart of the group results’: the regions delivered revenues up six per cent to £7,820 million and operating profit up 12 per cent to £1,350 million. Customer growth of 506,000 was the highest annual organic customer growth in eleven years.
Paid-for product growth in the UK and Ireland for the year was 3.3 million, exceeding 38 million products. Sky delivered 721,000 new subscription product sales in Q4, bolstered by accelerated growth across TV and broadband. Quarterly TV growth increased by 49 per cent to 113,000, while broadband additions of 96,000 were up 92 per cent year on year.
After three years of decline in Italy, Sky’s customer base in the country remained stable over the last year, which it described as ‘a good result in a challenging market’. Sky in Italy delivered revenues of £2,086 million, down principally due to the absence this year of wholesale revenue from Champions League rights.
The group reported a ‘strong year on screen’ in its quest to ‘create a powerhouse for content in Europe’. Following the release of Fortitude and political drama 1992, Sky launched its first original production out of Germany in March, crime drama 100 Code, attracting a total of 1.8 million views over the series. In UK and Ireland, its commission Enfield Haunting delivered the highest-ever audience for a show on Sky Living and the third-highest audience for a Sky original drama series.
Of course, the broadcaster also benefitted from the fifth series of HBO’s Game of Thrones launching exclusively on Sky in April. It came as little surprise that the show set a new Sky record in Germany and Austria with 5.4 million views across the series while the finale achieved a record audience of 3.1 million in the UK and Ireland.
Sky Sports remains a powerful arm of the business, concluding 35 deals in the last 18 months. It secured the rights to 126 live Premier League games a season from 2016 to 2018, three times as many live matches as any other broadcaster. Sky Sports also bagged exclusive live coverage of The Open golf championship, and in May the Mayweather Pacquiao pay-per-view fight became the highest grossing pay-per-view fight ever for Sky in the UK and Ireland, as well as in Germany and Austria.
In the UK and Ireland, Sky claims to have ‘firmly established Sky at the heart of the connected home’ connecting over a million set-top boxes to the internet. On-demand usage grew, and total on-demand downloads surpassed 1.5 billion in 2015, up 60 per cent on the prior year.
In the UK, Now TV – which delivers content via an internet connection, in competition with the likes of Amazon Prime Video and Netflix – also grew, selling almost three times as many sports passes as last year. Over the summer Sky will launch the new Sky Sports month pass via the service and introduce a new box in August. A new Sky Online service launched in Germany in December with a streaming box based on the same technology in the Now TV box, and a similar streaming box to support Sky Online in Italy in May.
Darroch commented: “Looking ahead, we see an expanded opportunity for growth by serving the market broadly with multiple products and services. The investments we have made have given us a strong platform on which to build and we have a clear set of plans to deliver long-term growth and returns for our shareholders.”