BSkyB dismisses fears over saturation point

BSkyB does not see the tough consumer environment hitting what it expects to be good profit and cash generation, and will consider returning cash to shareholders when appropriate.
By The Newsroom
Published 17th Nov 2011, 08:11 BST

Chief executive Jeremy Darroch dismissed concerns that the pay-TV market was reaching saturation point.

BSkyB added 26,000 net new customers in its most recent quarter, slightly below forecasts and well below previous years, but posted strong profit growth by selling more services to its existing customer base and managing its costs.

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“I see a positive outlook,” Mr Darroch said. “I think we’ll continue to grow the business well. There’s loads of opportunity in this market. There’s a long way to go. We need to keep building for the future so that when the markets are more favourable, we’re in an even better position. And we need to manage the efficiency of the business.

“If we do all that then I think the outlook for revenue growth, margin growth and therefore strong absolute profit and free cash flow generation will be good.”

Mr Darroch noted the television service run by telecoms group BT, BT Vision, had shown good customer growth in its most recent results but said that also gave BSkyB the opportunity to sell its sports packages to those viewers through a wholesale agreement.

A new television platform due to be launched next year called YouView will also be an opportunity to reach new consumers, he said.