A robust full-year performance from media giant British Sky Broadcasting (BSY) helped alleviate concerns over the looming entry next month of rival BT (BT.A) into the lucrative sports television market. Not only did BSkyB deliver a solid dividend hike, but it also promised another £500m of share buybacks.
According to analyst Roddy Davidson at broker Westhouse, the results were a reminder of BSkyB's "underlying strengths including an unrivalled content proposition, loyal subscriber base, very strong cash flow and proven marketing skills". The day before these figures, BT reported that it had signed up more than 500,000 households for BT Sport - but most of these are existing customers.
So far, BSkyB has felt few negative effects from BT's challenge. Indeed, paid-for product subscriptions grew 3.3m - bringing the total to 31.6m. Moreover, the group finished the year strongly with 11 per cent organic growth in product sales in the fourth quarter. BSkyB is also bringing forward investment in some new services - with rapid payback periods. That has led analysts at Barclays to reduce its headline earnings estimates slightly for this year and next - but it has increased them thereafter.
Barclays now expects adjusted EPS of 58.5p for 2014, rising to 64.1p in 2015 and 69.9p in 2016 (from 59.1p for 2013).
BRITISH SKY BROADCASTING (BSY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 816p | MARKET VALUE: | £13.0bn | |
| TOUCH: | 816-817p | 12-MONTH HIGH: | 906p | LOW: 690p |
| DIVIDEND YIELD: | 3.7% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 63p* | NET DEBT: | 117% | |
| Year to 30 Jun | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 5.36 | 0.46 | 14.9 | 17.6 |
| 2010 | 5.71 | 1.19 | 51.0 | 19.4 |
| 2011 | 6.60 | 1.01 | 43.5 | 23.3 |
| 2012 | 6.79 | 1.19 | 52.6 | 25.4 |
| 2013 | 7.24 | 1.26 | 60.7 | 30.0 |
| % change | +7 | +6 | +15 | +18 |
Ex-div: 13 Nov Payment: 6 Dec *Includes intangible assets of £1.72bn, or 108p a share | ||||
