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Sky sets new financial records

Pan-European pay-television broadcast group Sky has today (Thursday) reported a record full-year operating profit of £1.558bn (€1.86bn/$2.05bn), breaking the £8bn revenue barrier in the UK and Ireland for the first time and setting its first-ever operating profit in Germany and Austria.

Sky, which now incorporates operations in the UK and Ireland, Germany and Austria, and Italy, revealed its financial results for the year ending June 30, 2016. Total group revenues rose year-on-year from £11.221bn to £11.965bn, with the UK and Ireland accounting for £8.371bn of this figure, compared to last year’s £7.82bn.

Sky Deutschland set full-year revenue of £1.512bn versus £1.352bn in 2015. Sky Italia reported a slight rise from £2.049bn to £2.082bn.

Group operating profit grew from £1.397bn to £1.558bn, with Sky UK and Ireland accounting for £1.504bn of this – a rise of 11 per cent. Following a loss of £11m last year, Sky Deutschland posted a slight operating profit of £4m. 

Sky Italia posted a reduction in its operating profit, from £58m last year to £50m. However, Sky chief executive Jeremy Darroch hailed the company’s performance in the market. He said: “That Italy returned to customer growth for the first time in five years is a real achievement in a market with more economic headwinds. The power of the three Skys as one group is really starting to take shape.”

Sky today announced further plans for the virtual reality sector and said it will release a virtual reality app and 12 free short VR films later this year. Darroch said VR is still a long-term category but believes it can play a “big and complementary” role. He added: “Our ambition as Sky is to be right at the forefront of that, to help lead the industry.”

Regarding the outlook for the next financial year, Sky added in a statement: “Looking to 2016-17 we will continue to execute our strategy by capturing our expanded opportunities for growth with a strong set of plans in each market, underpinned by a continued focus on cost. We aim to grow our revenues at a similar annual run rate of between five per cent and seven per cent  as in recent years and this, combined with a particularly strong focus on cost efficiency, will allow us to substantially absorb the impact on profits and earnings of the approximately £600m one-off step up in the UK Premier League rights cost.”