Sky has "shrugged off fierce competition, including from BT and Netflix," to add nearly 1 million customers across Europe in the past year, according to Henry Mance of the FINANCIAL TIMES. The pay-TV broadcaster, which last November completed the £7B acquisitions of Sky Italia and Sky Deutschland, "has faced questions over whether it can sustain revenue growth in the face of rivals' cheaper sports and entertainment packages." Adjusted pre-tax profit after gains on disposals and restructuring costs rose 6% to £1.2B ($1.87B) in the year to June 30, "broadly in line with analysts' forecasts." Pre-tax profits were £1.52B ($2.37B). Sky's customer numbers increased 4% year-on-year in the U.K., 12% in Germany, "but remained flat in Italy, with a decline in the last three months." City analyst Thomas Singlehurst said that the results were "very strong," but there was likely to be "some moderation in the rate [of] improvement" in the coming months because of BT's Champions League launch and Sky's own price increases. BT, Sky's biggest rival in the U.K., is expected to "market its own TV packages heavily to coincide with the launch of its exclusive coverage of the Champions League this autumn." Sky CEO Jeremy Darroch said that Sky Sports remained "the first choice" for audiences. Darroch: "We'll get through the next three months" (FT, 7/29). BLOOMBERG's Kristen Schweizer reported Sky has "started to see some benefits from creating a pan-European
broadcaster after consolidating its German and Italian assets under the
U.K. company." It said that it is "on track" to hit its target of £200M ($312M) in synergies by the end of the fiscal year ending in June '17. Sky spends about £2.6B ($4B) a year on content for the U.K., including sports, its own entertainment products and rights to air Hollywood films. In February, the broadcaster agreed to pay more than £4B ($6.2B) for a three-year package of U.K. rights to broadcast the Premier League (BLOOMBERG, 7/29).
