Sky sees growth during Brexit as more consumers 'regress to their home' in times of uncertainty, reporting profit boom across Europe
Sky has reported healthy growth over the last 12 months with operating profit up 12 per cent, one of just a few companies to have met financial targets in times of economic uncertainty as Brexit has put a halt on UK investment.
Sky Cinema
Despite word that some advertisers are putting a pause on UK investment while the UK’s economic stability teeters, Sky has posted a 2.7 per cent increase in ad revenue in the 12 months ending 30 June, an increase of £14m.
Sky also recorded 445,000 new customers in the UK and Ireland in the 12 month period, including 93,000 in its fourth quarter. Total product growth was 2.3m across the 12 months with 31,000 new TV products in its fourth quarter. UK and Ireland revenue also grew 7 per cent to £8.4bn and operating profit in the region increased 11 per cent to £1.5m.
This was helped by the launch of Sky Q, Sky Kids App, Sky Cinema and the Now TV Combo, which includes a streaming service pass, unlimited broadband and a phone line. As part of its product expansion, Sky today (28 July) announced its Buy and Keep service will expand to TV and film box sets, allowing customers to store complete series of box sets on their TV for the first time.
In Germany and Austria, Sky delivered revenue growth of 12 per cent in the 12 month period and recorded its first full year operating profit of £4m. Total customer growth was 346,000, including 59,000 new customers in its fourth quarter. In Italy revenues were up 2 per cent to £2.1bn for the full year and up 6 per cent in Q4 alone, while its customer base returned to growth for the first time in five years, with total customers up 17,000 over the 12 months.
In an earnings call this morning, Jeremy Darroch, group chief executive, said that consumers are likely to "regress to their home" during times of economic uncertainty, where he believes Sky offers a “great entertainment product”.
It comes just a day after ITV announced it was cutting costs in anticipation of economic uncertainty following Britain’s vote to the leave the European Union, with advertising sales expected to be down seven per cent in August, and as much as 10 per cent in September.