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BSkyB advances on record profit; FTSE falters
by Max Julius on May 02, 2012 at 09:30
British Sky Broadcasting (BSY.L) shares climbed on Wednesday after the broadcaster reported record profits, while Britain’s FTSE 100 retreated from a one-month high ahead of key US jobs data.
BSkyB added 13.5p, or 2%, to 705p after the London-based company said revenues rose 5% to an all-time high of £5.1 billion in the nine months to the end of March, as adjusted operating profit increased 15% to £908 million.
The gains came amid strong growth in the group’s home communications products, with 702,000 net broadband, telephony and line-rental product additions, BSkyB said.
Analysts at Jefferies branded the earnings ‘a decent set of results’. They stressed that BSkyB continued to show growth in its TV subscriber base, ‘which should help alleviate some concerns that the business is ex-growth’.
Still, Richard Nunn, analyst at Charles Stanley, pointed out that the ongoing review by UK regulator OFCOM regarding into News Corp – which owns a controlling stake in the company – remained potential longer-term threat to BSkyB.
On Tuesday, a UK parliamentary committee declared Rupert Murdoch, News Corp’s owner, ‘not fit’ to lead an international media company, in a report on the group’s handling of a phone-hacking scandal at its now-defunct UK tabloid the News of the World.
Meanwhile, the UK index of blue-chip shares faded 0.15%, or nine points, to 5,804 – after hitting a one-month high of 5,820 – and the All Share index slid 0.1%, or three points, to 3,018. See the FTSE’s performance and the index’s top winners and losers.
The losses came as investors awaited data on the US private sector jobs market from payroll processing firm ADP later in the day, for confirmation that the US recovery is still on track. The report, which economists surveyed by Reuters expected to show 177,000 new jobs were created in April, precedes official figures on US employment, due on Friday.
Sterling weakened 0.12% versus the dollar to $1.62 ahead of the report, but added 0.38% against the euro to €1.229.
Stock indices elsewhere in Europe were mixed, as some played catch-up with strong gains in other global markets on Tuesday, when European markets were closed for the May Day bank holiday.
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