29th January 2016
Broadcaster Sky has announced better than expected profits, leading analysts to predict the share price could begin to rise again.
In its second quarter results, Sky reported that operating profit was up 12% to £747 million and revenue was up 5% to £5.718 million. A total of 337,000 new customers joined the Sky service in Q2.
The group also announced James Murdoch is to become chairman in April as Nick Ferguson steps down after 12 years.
Graham Spooner, investment research analyst at The Share Centre, said the first half results for the company mean it has ‘started the year with good momentum’ and shares were up 2% on the back of news that Murdoch was to be chairman.
‘Over 337,000 new customers joined the company in the second quarter which is the highest UK growth for the company in 10 years,’ he said.
‘Good growth was also seen in Germany, which the company sees as one of Europe’s fastest growing pay TV markets. Sky also sold 1.1 million extra paid-for products over the period, with strong demand experienced particularly for its TV and broadband services.’
The company now has over 21.5 million customers and chief executive Jeremy Darroch ‘believe that the group is well positioned to deliver further strong growth and returns for shareholders, courtesy of an outstanding set of new initiatives and products’, said Spooner.
‘Subsequently, we recommend Sky as a ‘buy’ for medium risk investors seeking growth. The ability to win new customers and more importantly, to upgrade to a single package, along with the expansion of products, leads us to believe that the share price could again start to head in the right direction,’ said Spooner.