SOURCE: British Sky Broadcasting Group PLC

January 31, 2012 02:15 ET

BSkyB Half Year Results

MIDDLESEX, UNITED KINGDOM--(Marketwire - Jan 31, 2012) -

     Unaudited results for the six months ended 31 December 2011


                         Adjusted results          Reported results

Six months to     2011       2010   Variance   2011       2010  Variance
31 December

Revenue         GBP3,364m  GBP3,186m    +6%  GBP3,364m  GBP3,186m   +6%
EBITDA (2)       GBP772m    GBP677m    +14%   GBP803m    GBP648m   +24%
profit(2)        GBP601m    GBP520m    +16%   GBP632m    GBP491m   +29%
Earnings per
share (basic)(3)  24.0p      20.0p     +20%    25.3p      20.3p    +25%
Dividend per
share             9.20p      8.74p      +5%    9.20p      8.74p     +5%

Excellent financial performance; strong growth across the board

* Revenue up 6% to GBP3.4 billion
* Highest ever first-half adjusted operating profit, up 16% to GBP601
* Efficiency programmes delivering lower operating costs; adjusted
  operating margin up 160 basis points to 17.9%
* Adjusted basic EPS up 20% to 24.0 pence
* Adjusted free cash flow up 12% to GBP495 million
* Interim dividend up 5% to 9.20 pence, in addition to the GBP750
  million buy-back initiated on 29 November 2011

Continued growth in products and customers in the quarter

* Total net product growth of 772,000 to 26.8 million, up 13%
* Added 100,000 new households to reach 10.471 million customers
* Good response to price freeze; strong customer loyalty in a tough
  economic environment with churn of 9.6%
* Continued improvement in product mix with more than three million
  customers taking all three of TV, broadband and telephony, up by 26%
  year on year
* Customers responding to leading innovation with 2.5 million users of
  Sky Go to date

Strong set of plans for 2012

* Bringing more high quality content for Sky customers, including home
  grown comedy and drama and a new channel dedicated to Formula 1
* New agreements to add BBC iPlayer and ITV Player to Anytime+
* Free access to 10,000 WiFi hotspots to Sky Broadband Unlimited
* Fibre broadband available to c30% of UK households from April,
  offering up to 40Mb broadband speeds and truly unlimited usage for
  GBP20 a month
* Launching a new internet based pay TV service aimed at new customers
* Creating 1,300 Sky jobs across the UK and Ireland over the next two

Results highlights

Customer Metrics (unaudited)
                          As at      As at      Annual    Growth to
                        31-Dec-11  31-Dec-10    Growth    31-Dec-11

Total products ('000s)     26,830     23,790    +3,040         +772
  TV                       10,253     10,096      +157          +40
  HD                        4,063      3,497      +566         +138
  Multiroom                 2,350      2,219      +131          +55
  Broadband                 3,651      3,006      +645         +166
  Telephony                 3,407      2,757      +650         +159
  Line rental               3,106      2,215      +891         +214

Total customers ('000s)    10,471     10,150      +321         +100

Products per customer         2.6        2.3      +0.3

Other metrics
Customers taking each of
TV, broadband & talk          29%        24%       +5%
ARPU(1)                    GBP544     GBP536     +GBP8
Churn (quarterly
annualised)                  9.6%       9.5%

An additional KPI summary table containing further detailed disclosure
may be found in Schedule 1.

Business Performance(2)(unaudited)
GBP'millions                      6 months       6 months
                              to 31 Dec-11   to 31 Dec-10     Movement

Revenue                              3,364          3,186          +6%
Adjusted operating profit              601            520         +16%
% Adjusted operating profit
margin                               17.9%          16.3%     +160 bps
Adjusted EBITDA                        772            677         +14%
Adjusted free cash flow                495            443         +12%
Adjusted basic earnings per
share(3)                             24.0p          20.0p         +20%

1 Quarterly annualised. Calculations have been restated to include
customers taking standalone home communications products and to reflect
the impact of the Sky magazine closure.

2 A reconciliation of adjusted operating profit and adjusted EBITDA
from continuing operations to reported measures as well as cash
generated from continuing operations to adjusted free cash flow from
continuing operations is set out in Appendix 3.

3 Adjusted basic EPS is calculated from adjusted profit from continuing
operations for the period. A reconciliation of reported profit from
continuing operations to adjusted profit from continuing operations is
set out in note 5 to the condensed consolidated interim financial

Jeremy Darroch, Chief Executive, commented:"It has been a strong first half
with progress on all fronts. While
these are tough times for many consumers, our customers are staying
loyal and more households continue to join us. From broadband to high
definition, people are choosing Sky for a wider range of products than
ever, underlining the transformation of our business over the last few
years."Our approach to growth is working well. We're adding more value to
Sky subscription by investing where it matters most to customers, with
more great entertainment and ground-breaking innovation like Sky Go.
Alongside that, we're improving efficiency behind the scenes so we can
expand margins at the same time. Financially, we've delivered another
strong result, with our highest ever first-half operating profit and
20% growth in earnings per share. On the back of this, we're
increasing the dividend again and have started our share buyback
programme to increase returns for our shareholders."We expect the
environment to remain tough in calendar 2012. No
consumer business can be immune to these conditions and we will manage
any short-term headwinds as they emerge. Staying focused on the
long-term opportunity, we've got a strong set of plans to keep
delivering for customers and shareholders. This will be an outstanding
year on screen, including more original British productions and a new
channel dedicated to Formula 1, and we have exciting products in the
pipeline that will create more ways to access our content and more
reasons to join and stay with us."


We have delivered a strong first half performance with good growth in
customers and products and record financial results. We've continued to
invest on screen and in bringing leading innovation to customers and,
at the same time, maintained our focus on cost efficiency to deliver an
overall reduction in other operating costs. This has translated into
double-digit growth in operating profit, free cash flow and earnings
per share and our highest operating margin for five years.

While household budgets remain under pressure, customers are choosing
Sky over other providers and are spending more with us. Net product
additions of 772,000 in the three months to 31 December 2011 ("the
quarter") took the total base to 26.8 million, up by 13% year on year.
Within that, we added 100,000 net new households and our focus on
loyalty delivered a good performance in churn which, at 9.6%, was
broadly level on the prior year.

We saw growth in every product category, with a particularly strong
performance in home communications. As a result, customers are now
taking an average of 2.6 products, up 13% on last year, and ARPU
continues to rise, reaching a new high of GBP544.

Our operating performance is converting into strong and sustained
financial results. We achieved revenue growth of 6%, at a time when we
froze subscription prices for customers and absorbed headwinds in Sky
business and advertising. We delivered our highest ever first half
adjusted operating profit of GBP601 million, and further progress on
costs delivered an increased adjusted profit margin which reached
17.9%. All of this was achieved alongside continued investment in the
customer experience, with good financial discipline contributing to
adjusted basic EPS growth of 20% and adjusted free cash flow growth of

The Directors have declared an interim dividend of 9.2 pence per share,
representing an increase of 5% year on year, making this the eighth
consecutive year of increased dividends for shareholders. As has been
the case previously, we expect the final dividend payment to form the
greater proportion of the total.

As we said in our 2011 Preliminary final results, our intention for the
current and subsequent financial years is to maintain a policy of
paying out around 50% of full year adjusted earnings as dividends. In
addition, we have commenced our previously announced share buyback
programme of GBP750 million, further increasing returns to shareholders.


We do not expect any material improvement in the macro backdrop in
calendar 2012, with strong consumer headwinds anticipated in the early
part of the year. While remaining cautious in respect of the economic
outlook, we continue to expect that the strength and flexibility of our
business will deliver further progress. Our growth will stay
broadly-based, increasing product penetration and adding new households
where it makes sense. We will also continue to invest in core areas for
customers and we have a strong set of plans for the year ahead,
including more great content, a strong product pipeline and the launch
of an entirely new internet based pay TV service aimed at new
customers. Alongside that, we will maintain our focus on operating
efficiency because this underpins our ability to keep investing for
customers. We believe this is the right approach to build a more
valuable business and increase returns to shareholders over time.


Operational Performance

Our customer focus has once again delivered strong operating results in
the quarter. In a difficult consumer environment, customers are
increasingly recognising our great value by choosing Sky over other
providers and taking more from us. We have maintained a consistent
approach to growth in the quarter by growing broadly across our product
range, focusing on adding high quality customers and building a loyal
customer base.

We added 772,000 total net products in the quarter, growing the base by
13% year on year to reach a total of 26.8 million products. In an
environment where customers are more cautious about making long-term
financial commitments, we added 100,000 net new households in the
quarter. While TV growth was lower year on year at 40,000, we
compensated for this well with 60,000 new standalone home
communications customers. Our total customer base reached almost 10.5
million, of which 218,000 are standalone home communications customers.

The second quarter performance completed a strong first half in which
we added almost 1.5 million net products and saw continued growth in
total customers, adding 177,000 net new households.

We have again delivered good growth in all product categories and
customers are now taking an average of 2.6 products each, 13% higher
year on year. Total HD customers reached four million, with 138,000
net additions in the quarter and another strong performance in home
communications means we now have over three million customers who take
each of TV, broadband and telephony, up 26% year on year.

As customers choose to take more from us, ARPU has grown to a new high
of GBP544 and our customer focus has resulted in continued strong
loyalty, with churn at 9.6%.

We continued to see strong take-up of home communications products as
customers responded to our high quality, great value proposition. We
added 166,000 broadband, 159,000 telephony and 214,000 line rental
customers. At the same time we are improving the economics of our home
communications business, migrating a further 277,000 customers to our
fully unbundled network to reach 59% penetration of the broadband base.

Looking ahead, we plan to add to our broadband service in three ways;
first, we'll extend our network footprint from 82% today to 88% of the
UK by the end of 2013, making our great value broadband available to a
further 1.4 million homes; second, we will launch our free WiFi service
to Sky Broadband Unlimited customers in April, giving seamless access
to our content on the move in 10,000 locations across the UK; third,
from April we will extend our broadband line-up by adding a new fibre
product for customers who want higher speeds. For GBP20 per month,
customers will be able to access download speeds of up to 40Mb, with no
usage caps and can pre-register their interest from today. Using BT's
infrastructure, our fibre product will initially be available to just
under 30% of UK households, with coverage set to grow over time. With
this new addition to our product portfolio, we will provide customers
with even more choice in home communications and, at the same time,
make an attractive on-going return for our business.

As part of our on-going commitment to customers, we are also announcing
today the creation of 1,300 Sky jobs across the UK and Ireland over the
next two years, including the opening of a new service centre in
Dublin. This forms part of an on-going programme to bring more of our
customer service and installation workforce in house and ensure our own
people deal with the most complex customer issues.


We have had a strong quarter on screen, where we have continued to
build on our traditional strengths in sports and movies, as well as
delivering a step change in our entertainment channels.

In the second quarter, our increased investment in British comedy and
drama has delivered success, with our key commissions performing
strongly both in terms of customer response and critical acclaim.
Viewing of our entertainment channels was up by 21% year on year in Sky
homes, continuing our strong start to the fiscal year. The second
season of 'An Idiot Abroad' delivered one of Sky 1's biggest ever
audiences and we secured our first ever British Comedy Awards for 'Spy'
and 'Victoria Wood's Angina Monologues'. The coming year will see us
bring customers more great drama and we have made a strong start with
our new adaptation of 'Treasure Island' delivering Sky 1's highest
drama audience for four years. We will also continue to offer the best
of US content with 'Mad Men', 'Luck' starring Dustin Hoffman and the
second series of 'Game of Thrones'.

The quarter concluded a very successful calendar year in sport in which
we broadcast more live events for Sky viewers than ever before. Our
mobile sports content is proving increasingly popular with customers
and with live mobile streaming via apps for smart phones and tablets,
customers can access live action or updates in more ways than ever
before. In combination with good growth in movie customers, we closed
the half with our highest ever level of subscribers to our premium
channels across all platforms. Looking ahead, we have a strong line-up
for customers. In addition to our coverage of The Masters, the Ryder
Cup and England cricket tours and home series, we have also agreed a
new four year deal to broadcast live international and county cricket,
continuing our successful partnership with the ECB. In March we will
launch our dedicated Formula 1 (F1) channel, Sky Sports F1 HD, giving
in-depth access to all 20 Grand Prix at no extra charge for Sky TV
customers who subscribe to Sky Sports 1 and 2 or our HD pack.

New Products and Services

We continue to innovate to add value for customers. Building on the
early success of Sky Go and Sky Anytime+, in 2012 we have major
initiatives in the areas of portability, on demand content and
companion devices.

Just five months after its launch, 2.5 million customers have used our
Sky Go service to access a range of movies, sports and entertainment
channels through PCs, laptops, X-boxes, smartphones and tablets. In
November, we expanded the range of content available on the Sky Go
mobile application with the launch of a constantly updating library of
600 on demand movie titles from all the major studios. As a result, Sky
Go reached a new high of 1.5 million monthly unique users in December.
Looking ahead, we will launch Sky Go on the Android platform in
February, representing a base of five million devices in the UK. We
also plan to expand the channel line-up on our Sky Go mobile service,
starting with the addition of Sky Atlantic, closely followed by Sky 1,
Sky Living and Sky Sports F1.

Sky Anytime+, our full on demand service, now has 1.2 million enabled
customers. This quarter we have continued to add more content to the
service, increasing the number of hours available as well as doubling
the amount of HD content. As a result, usage is growing strongly, with
weekly downloads increasing by 80% across the second quarter and a high
proportion of viewing to movies. We also plan to increase distribution
to all customers with a Sky+HD box, irrespective of their Internet
Service Provider. As a result, we estimate the potential reach will
grow to more than five million households.

Looking ahead to 2012, we'll add even more great content for customers.
Today we are announcing an expansion to the range of high-quality
content available on Sky Anytime+ following agreements with the BBC and
ITV to add the BBC iPlayer and ITV Player to the service. From today,
customers will be able to access archive content from ITV, including
popular shows such as Prime Suspect, Lewis and Cold Feet. Seven day
catch-up will join the service later this year with the addition of the
BBC iPlayer and more ITV content. Archive BBC content - including the
likes of Doctor Who, Outnumbered and Top Gear - is already available on
Sky Anytime+ through Sky's existing deal with UK TV.

We are bringing together broadcast TV and the internet through a
strategic partnership with zeebox, an innovative second screen consumer
service provider. Launching in the first half of 2012, Sky and zeebox
will offer a ground breaking companion app experience for Sky customers
which provides unique augmented TV viewing features, such as connecting
with friends around TV shows, finding more information about what's on
TV, and buying products relating to their favourite programmes. From
later this year, Sky customers will also be able to use a zeebox
powered Sky app to access their Sky+ box on the move, so they can
manage their Sky+ recording remotely, as well as using their iPhone or
iPad as a remote control for their Sky box, creating a comprehensive
and fully integrated companion TV experience.

Launch of new internet pay TV service in 2012

The rapid growth of broadband-connected devices is opening up new
opportunities to retail our content directly to additional consumers.

Today we are announcing plans to launch a new service aimed at the 13
million UK households who don't currently subscribe to pay TV.
Launching in the first half of calendar 2012, the service will be a new
way to watch our content via broadband connected devices - on a PC,
laptop, tablet, smartphone, games console or connected TV. It will
offer instant access to Sky Movies on demand, with no dish and no
contract, and customers will be able to pay monthly or rent a movie on
a simple pay-as-you-go basis. The service will start by offering
movies, but will soon expand to offer sport and entertainment as well.

Alongside the continued growth of our satellite platform and existing
wholesale arrangements, this will be a new way for us to reach out to
consumers who love great content, but may not want the full Sky
service. With no need for significant infrastructure investment, the
service will open up a new opportunity for customer growth and allow us
to monetise our content more widely.

The Bigger Picture

As part of our commitment to making a positive contribution to life in
the UK and Ireland, we delivered a number of initiatives this quarter
through our Bigger Picture programme.

Through our partnership with British Cycling, which is aimed at
improving participation in the sport, our pro cycling team 'Team Sky'
finished second overall in the 2011 World Tour Rankings. We also
welcomed Mark Cavendish, World Champion and winner of 20 Tour de France
stages, to the team for 2012.

Our environmental leadership was recognised with Sky being placed
amongst the leaders in the Environmental Tracking UK 100 Carbon Ranking
Survey, and Sky Studios being awarded both the Efficient New Build
Project and Judge's Supreme Award at the 2011 Energy Awards.

As part of our wider work with the Arts, our Sky Arts Ignition Series
team have been touring the country to update 300 arts organisations and
young artists on the Sky Arts Ignition and Futures Fund initiatives. We
also announced the first two winners of the Sky Arts Ignition: Futures
Fund; a programme providing bursaries for young artists each year.

The annual Bigger Picture Review 2011, reporting on our performance as
a responsible business, was published online in October at the
following address 


We delivered a record financial performance in the six months to 31
December 2011 ("the period"). Good revenue growth and excellent
progress on costs delivered 16% growth in adjusted operating profit and
20% growth in adjusted basic EPS. Efficiency programmes across the
business have allowed us to reduce other operating costs year on year,
more than offsetting the increased investment in programming to deliver
our highest ever first half adjusted operating profit of GBP601 million
and a 160 basis point improvement in adjusted operating margin to

Unless otherwise stated, all figures and growth rates included within
the financial section exclude exceptional items and are from continuing


Group revenue increased by 6% to GBP3,364 million (2011: GBP3,186
million),with broadly based growth in both retail and wholesale
operations offsetting headwinds in advertising and Sky business.

Retail subscription revenue was up by 5% to GBP2,764 million (2011:
GBP2,638 million), benefiting from growth in customers and products and
despite our decision to freeze subscription prices.

We saw a good performance in wholesale subscription revenue which
increased by 13% to GBP170 million (2011: GBP151 million) as we continue
to benefit from demand for our channels and their HD versions by
subscribers to other platforms.

Advertising revenue was 6% lower year on year at GBP222 million (2011:
GBP236 million), as a result of headwinds impacting the sector and
higher payments to our third party media partners. During the period, we
estimate the TV advertising market declined by 1% year on year, with
our share falling slightly to 19.4% with free-to-air networks
attracting a higher proportion of increased competitor spend during the

Installation, hardware and service revenue was lower year on year at
GBP51 million (2011: GBP63 million), reflecting our introduction of a
free service for customers moving home and fewer engineer visits as a
result of our work to increase the reliability of set-top boxes.

Other revenue was 60% higher at GBP157 million (2011: GBP98 million).
The increase includes GBP34 million from the sale of set-top boxes to
Sky Italia, for which the corresponding cost is recognised in subscriber
management and supply chain. Excluding the impact of the set-top box
sales, other revenue was up by 26% benefiting from continued strong
performance in Sky Bet and the inclusion of GBP11 million from the
consolidation of 'The Cloud'.

Direct Costs

Programming costs increased by 5% to GBP1,109 million (2011: GBP1,058
million). Entertainment costs accounted for GBP37 million of the
increase as a result of the anniversary effect of having a full six
months of Sky Atlantic programming and further investment in original UK
programming such as 'An Idiot Abroad 2', 'Strike Back Project Dawn'
and'Mount Pleasant'. Partner channel costs were GBP12 million higher as a
result of having five additional third party HD channels and 16% growth
in HD customers. Sports and movies costs were broadly level year on

Direct network costs increased by 25% to GBP336 million (2011: GBP269
million) due to increased scale in the business and the 27% growth in
home communications products. Gross margin improved as a result of
revenue growth and cost savings achieved as a greater proportion of
customers are unbundled onto our own network.

Other Operating Costs

We have delivered another strong performance in our cost base, where
efficiency programmes have contributed to a 2% reduction in other
operating costs for the period to GBP1,318 million (2011: GBP1,339 milli
on)and 280 basis points of margin improvement year on year.

Marketing costs fell by 12% to GBP541 million (2011: GBP613 million) as
a result of fewer gross additions and less commission paid to third
party retailers as a result of driving more acquisitions through online
channels. We also reduced above-the-line advertising costs by GBP10
million year on year and achieved the expected savings from our
decision to close the Sky customer magazine.

The per customer cost to acquire a TV subscriber ("SAC") increased GBP14
to GBP368 (2011: GBP354) reflecting a lower number of gross additions
and the difficult consumer environment.

Subscriber management and supply chain costs increased by GBP37 million
year on year. The largest contributor to the increase was the cost of
sales of set-top boxes to Sky Italia, for which the corresponding
revenue is recorded within other revenue and from which we both derive
scale benefits and a small positive profit margin. Excluding the impact
from these box sales, subscriber management and supply costs increased
by 1% year on year.

Transmission, technology and fixed network costs were GBP5 million
higher at GBP194 million (2011: GBP189 million) as a result of required
technical support costs in our new Sky Studios and the increased
running costs of an enlarged fixed network.

Growth in administration costs (excluding exceptional items) was held
below the rate of revenue growth, increasing by 4% to GBP260 million
(2011: GBP251 million). The increase reflects the inclusion of overhead
costs relating to Sky Studios and the first time inclusion of costs
relating to The Cloud.


On an adjusted basis, profit before tax was GBP564 million (2011: GBP477
million) and included the Group's share of joint ventures and
associates' profits of GBP17 million (2011: GBP17 million) and a net
interest charge of GBP54 million (2011: GBP60 million).

Adjusted taxation was GBP146 million (2011: GBP129 million) resulting in
an effective rate of 26% for the period. The adjusted tax charge on
continuing operations for the year is expected to be around 25%,
reflecting the reduction in the rate of UK Corporation Tax.

Adjusted profit for the period was GBP418 million
(2011: GBP348 million),generating an adjusted basic earnings per share from continuing
operations of 24.0 pence (2011: 20.0 pence).

Over the period the weighted average number of shares (excluding those
held by the Employee Share Ownership Plan for the settlement of
employee share awards) was 1,741 million and this is used for the
purposes of calculating basic earnings per share (rather than the
closing number of shares).

Cash Flow and Financial Position

Adjusted free cash flow increased by 12% to GBP495 million (2011: GBP443
million) reflecting 14% growth in adjusted EBITDA and improved working
capital, offset by increases in capital expenditure and taxation. See
Appendix 3 for details of adjusting items.

Capital expenditure of GBP237 million (2011: GBP221 million), was higher
year on year as we accelerated our exchange rollout programme in the
period, incurred costs of the technical fit-out of Sky Studios and
invested in our new contact centres in Sheffield, Newcastle and Leeds.

Strong cash generation during the period has contributed to a reduction
in net debt to GBP615 million. For a reconciliation of net debt see
Appendix 3. The Group's liquidity and headroom remain comfortable with
no bond redemptions falling due until October 2015. During the period,
the Group renewed and extended its revolving credit facility of GBP743
million on more favourable terms. The entire amount remains, and is
expected to remain, undrawn.

Exceptional Items

Reported operating profit of GBP632 million included the receipt of a
GBP38.5 million break fee from News Corporation offset by GBP8 million
of costs directly related to the News Corporation proposal.

Reported profit after tax of GBP441 million also included an exceptional
gain of GBP7 million relating to the re-measurement of derivative
financial instruments not qualifying for hedge accounting (2011: GBP19
million gain), a GBP5 million charge due to writing off the fees
relating to the previous revolving credit facility and a GBP10 million
charge relating to the tax effect on exceptional items.

Distribution to Shareholders

The Directors have declared an interim dividend of 9.2 pence per share.
This represents an increase of 5% year on year and is the eighth
consecutive year of increased dividend for shareholders. As previously
stated, our intention is to maintain a policy of paying out 50% of full
year adjusted earnings as dividends with the final dividend payments
typically forming the higher proportion of the total dividend.

The ex-dividend date will be 28 March 2012 and the dividend will be
paid on 24 April 2012 to shareholders of record on 30 March 2012.

The final dividend for 2010/11 financial year was paid to shareholders
during the period, resulting in a total cash dividend payment in
respect of the 2010/11 financial year of GBP405 million.

At the Company's AGM on 29 November 2011, Sky received approval to
return GBP750 million of capital to shareholders via a share buy-back
programme. Following approval and up to 31 December 2011, the Company
repurchased for cancellation 11.7 million shares for a total
consideration of GBP87 million. The closing share count at the end of
the quarter was 1,741 million.

Risks and uncertainties

The Board continually assesses and monitors the key risks of the
business. The following key risks that could affect the Group's
long-term performance, and the factors which mitigate these risks, are
set out in more detail on pages 24 - 28 of the 2011 Annual Report (save
for the additional risk relating to our exposure to the European
financial crisis). Other than where indicated below, the Board does not
consider that the following principal risks and uncertainties have
changed. Additional risks and uncertainties of which we are not aware
or which we currently believe are immaterial may also adversely affect
our business, financial condition, prospects, liquidity or results of

* The Group's business is highly regulated and changes in regulations,
  changes in interpretation of existing regulations or failure to obtain
  required regulatory approvals or licences could adversely affect the
  Group's ability to operate or compete effectively. Since the 2011
  Annual Report, the Competition Commission has provisionally found that
  the Group's control over Pay-TV movie rights in the United Kingdom is
  restricting competition between Pay-TV providers. It also issued a
  notice of possible remedies and in November 2011 it issued a notice of
  further possible remedies, each notice setting out possible actions
  which the Competition Commission may take to address its provisional
  findings. The Group has announced that it continues to believe that no
  regulatory intervention is required and that consumers benefit from
  high levels of choice, value and innovation across a wide range of
  providers and has noted that the Competition Commission's findings
  remain provisional and have been issued for consultation. According to
  its current administrative timetable, the Competition Commission
  expects to publish its final report in April/May 2012; its statutory
  deadline for completing its investigation is 3 August 2012.
* The Group operates in a highly competitive environment that is
  subject to rapid change and it must continue to invest and adapt to
  remain competitive. In the 2011 Annual Report, we referred under this
  risk heading to Ofcom's launch in June 2011 of a review of TV
  advertising trading in the UK. Since the 2011 Annual Report, Ofcom has
  exercised its discretion not to refer TV advertising to the
  Competition Commission.
* The Group's business is reliant on technology which is subject to the
  risk of failure, change and development.
* The Group is reliant on encryption and other technologies to restrict
  unauthorised access to its services.
* Failure of key suppliers could affect the Group's ability to operate
  its business.
* The Group undertakes significant capital expenditure projects,
  including technology and property projects.
* The Group, in common with other service providers that include third
  party services which the Group retails, relies on intellectual
  property and proprietary rights, including in respect of programming
  content, which may not be adequately protected under current laws or
  which may be subject to unauthorised use. On 4 October 2011, the
  European Court of Justice ("ECJ") handed down its judgment in actions
  brought by the Premier League ("PL"), amongst others, against pubs
  using (and suppliers supplying) foreign decoder cards and boxes to
  view live PL football. The ECJ determined that restrictions in an
  agreement between PL and its Greek licensee, which obliged that
  broadcaster not to supply decoding devices to persons outside the
  licensed territory, are contrary to EU laws. The ECJ found that,
  although PL did not have copyright in the live coverage of its
  football matches, PL title sequences, logo, anthem and graphical
  elements did attract protection under the Copyright Directive. The
  High Court will now need to apply the ECJ's judgment to the facts of
  the cases before it.
* The Group generates wholesale revenue principally from one customer.
* The Group is subject to a number of medium and long-term obligations.
* The Group has some exposure to the European financial crisis although
  the Group's net euro cash flows are approximately 3% of total group
  revenues and the Group's practice is to hold less than GBP10 million
  on deposit in euros. Whilst some of the Group's syndicate banks are
  headquartered in Europe, the Group does not currently anticipate
  drawing the RCF. To mitigate remaining risks, counterparty credit and
  sovereign ratings are closely monitored, and no more than 10% of cash
  deposits are held with a single bank counterparty (with the exception
  of overnight deposits which are invested in a spread of AAA-rated
  liquidity funds).

Responsibility statement

The directors confirm that to the best of their knowledge:

     * The unaudited condensed consolidated interim financial
       statements have been prepared in accordance with IAS 34 as
       adopted by the EU.
     * The interim management report includes a fair review of the
       information required by DTR 4.2.7R and DTR 4.2.8R of the
       Disclosure and Transparency Rules.

The directors of British Sky Broadcasting Group plc are listed on pages
36 - 37 of the 2011 Annual Report. At the Company's AGM on 29 November
2011, David Evans and Allan Leighton retired from the Board. On the
same date, Martin Gilbert and Matthieu Pigasse were appointed to the
Board as Independent Non-Executive Directors.

Copies of this report are available on the Company's website, , and in hard copy from the Company Secretary,
British Sky Broadcasting Group plc, Grant Way, Isleworth, Middlesex TW7

By order of the Board
Jeremy Darroch
Chief Executive Officer



Francesca Pierce          Tel: 020 7032 3337
Lang Messer               Tel: 020 7032 2657



Robert Fraser             Tel: 020 7705 3000
Stephen Gaynor            Tel: 020 7705 3000


Click on, or paste the following link into your web browser, to view
the associated PDF document that includes the table Schedule 1 - KPI

There will be a presentation to analysts and investors at 09:00 a.m.
(GMT) today at Deutsche Bank, Great Winchester Street, London, EC2N
2DB. Participants should register by contacting Yasmin Charabati on +44
20 7251 3801 or at . In addition, a
live webcast of this presentation to UK/European analysts and investors
will be available via 
investors and subsequently available for replay.

There will be a separate conference call for US analysts and investors
at 10.00 a.m. (EST) today. To register for this please contact
Alexandra Sowinski at Taylor Rafferty on +1 212 889 4350.
Alternatively you may register online at .

A live conference call and supporting materials will be available on
Sky's corporate website, . A replay will be
subsequently available.

Use of measures not defined under IFRS

This press release contains certain information on the Group's
financial position, results and cash flows that have been derived from
measures calculated in accordance with IFRS. This information should
not be read in isolation of the related IFRS measures.

Forward-looking statements

This document contains certain forward-looking statements with respect
to our financial condition, results of operations and business, and our
strategy, plans and objectives. These statements include, without
limitation, those that express forecasts, expectations and projections,
such as forecasts, expectations and projections in relation to new
products and services, revenue, profit, cash flow, product penetration,
our broadband network footprint, content, wholesale and returns

Although the Company believes that the expectations reflected in such
forward-looking statements are reasonable, these statements are not
guarantees of future performance and are subject to risks,
uncertainties and other factors, some of which are beyond our control,
are difficult to predict and could cause actual results to differ
materially from those expressed or implied or forecast in the
forward-looking statements. These factors include, but are not limited
to, those risks that are highlighted in the document in the section
entitled "Risks and uncertainties".

All forward-looking statements in this document are based on
information known to the Group on the date hereof. The Group undertakes
no obligation publicly to update or revise any forward-looking
statements, whether as a result of new information, future events or

                    This information is provided by RNS
          The company news service from the London Stock Exchange


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