BSkyB announces new buyback after strong year
LONDON (Reuters) - BSkyB announced a new 500 million pound ($766 million)share buyback on Friday as it released full-year results showing the group in fighting spirits ahead of its pending pay-TV battle with telecoms giant BT.
Britain's dominant pay-TV group, which provides telephony, broadband and premium TV, said it intended to seek approval for the new capital return in November, while it also hiked its full-year dividend by 18 percent.
That capped off full-year results which showed adjusted operating profit up 9 percent to 1.3 billion pounds, helped by an increase in the amount customers are willing to pay for the service to an average annual amount of 577 pounds.
The one slight weak spot was the addition of 51,000 net new customers to the service in the fourth quarter, below forecasts of 72,000.
The results for the period until the end of June are the last update to be provided before deep-pocketed rival BT launches its new sports TV service in August.
BT wants to use the Premier League rights to maintain its leadership of the market for broadband services, with many consumers now looking to buy bundles of pay TV, telephony and broadband.
As part of its plans to keep ahead of BT, BSkyB said it would invest to build out its on-demand service and its mobile video capabilities, which could result in an impact of 60 to 70 million pounds on operating profit in the next full year.
"We have had another very good year of growth, with revenues up 7 percent, operating profit up 9 percent and earnings per share up 18 percent," Chief Executive Jerem Darroch said.
"On the back of this performance, we are increasing returns to shareholders with the ninth consecutive rise in the ordinary dividend and we intend to seek approval for a further 500 million pounds of share repurchases."
(Reporting by Kate Holton; editing by Rhys Jones)