Sky has reported strong first quarter results, with a ten per cent increase in operating profit to £375 million, ahead of the predicted £366 million. The company has added 134,000 new customers in the period, invested in original content as well as signing a new multi-year deal with Sanzar rugby.
Customer additions are up seven per cent on the prior year and Sky has grown paid-for subscription products by 937,000. Perhaps more importantly, considering the increasing number and variety of TV services on offer to customers, Sky reported strong churn performance across all territories: In the UK and Ireland churn of 9.8 per cent was down 110 points year on year, the lowest Q1 level for 11 years. Customer growth figures in the territory were up fifty per cent year on year, which marked the highest Q1 rate for four years. Germany and Austria saw 94,000 new customers added, reduced churn, and revenue up 11 per cent.
Italy continues to pose a challenge, with the loss of Champions League rights to BT Sport having a strong impact here on a platform that is more sports-focused. Sky lost 37,000 customers in the region and revenue was down four per cent.
Sky's investment in content seems to be paying off: Sky Atlantic had an impressive quarter across the group with total viewing up over 70 per cent year on year in the UK and Ireland, 28 per cent in Germany and Austria, and 16 per cent in Italy. This can be attributed to the popularity of the second series of True Detective, as well as the channel's strong box set offering including titles such as Sons of Anarchy, Entourage and True Blood. Sky's original documentary commission Going Clear: Scientology and the Prison of Belief won three Emmy Awards, whilst the first episode of You, Me and The Apocalypse in the UK was the biggest original drama series on Sky 1 since 2012. Sky will continue to invest in content, with plans to deliver original content across all European platforms and over 150 hours of Sky original drama now in production.
Despite losing Champions League rights, Sky Sports in the UK has agreed rights to La Liga, the Scottish Premiership Football League, and England Cricket tours to Bangladesh and Pakistan. The Open golf was secured year earlier than originally announced, and the company has also revealed a new contract with Sanzar to offer at least 150 fixtures a year.
Following from its success in the UK Sky now plans to roll out its connected strategy' across the whole group. Its connected platform has grown by 2.3 million homes year on year, which has driven a 33 per cent increase in total views to Sky's connected services. Its connected box TV offering has helped drive revenues, aided by the launch of the Buy and Keep Service.
We have made a strong start to the year with customers responding well to the quality and breadth of our content, products and services, said Jeremy Darrcoh, group chief executive. As we continue to place customers right at the heart of our business, we are focused on offering the very best content at the same time as anticipating customers' evolving needs, delivering the programmes that they love across multiple platforms and devices.
As these results show, we are delivering against a clear set of plans across Europe, and are well positioned for the growth opportunities ahead.
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Sky has reported strong first quarter results, with a ten per cent increase in operating profit to £375 million, ahead of the predicted £366 million. The company has added 134,000 new customers in the period, invested in original content as well as signing a new multi-year deal with Sanzar rugby.
