Jump in subscribers boosts BSkyB

Rupert Murdoch: Broadcasting empire expands as rivals face cash crisis

LONDON, England -- British Sky Broadcasting, controlled by Rupert Murdoch, said on Wednesday profits rose in the fourth-quarter as it attracted more subscribers than expected after the demise of its main rival.

The UK's biggest pay-TV operator posted a net profit of £1.7 million ($2.7 million), or 0.1 pence a share, in the three months ending on June 30, compared to a loss of £165.6 million, or 9 pence a share, a year earlier.

Fourth-quarter revenue rose 18 percent to £747.9 million from £634.9 million a year earlier.

Many analysts had expected the group to post a loss of £39.1 million and revenues of £723.4 million in the fourth quarter.

The London-based BSkyB said it signed up 214,000 new subscribers in the fourth quarter, up from 171,000 in the previous quarter -- bringing the total to 6.1 million subscribers and closing in on its target of 7 million by the end of 2003.

"With 6.1 million subscribers and 11 percent growth in revenue per subscriber to £347 million, we are on track to meet our targets of seven million subscribers and £400 ARPU [average revenue per subscriber],'' Chief Executive Tony Ball said in a statement.

BSkyB, which is 36 percent owned by Murdoch's News Corp, has improved its market position during a particularly difficult period for the UK's pay-TV industry.

ITV Digital went out of business in April as expected subscriber revenue failed to cover the cost of broadcasting English Football League matches. UK-based cable companies NTL and Telewest have also faced a cash crisis as revenues declined, stock prices fell and debts from ambitious buying sprees mounted.

Earlier this month, BSkyB joined forces with publicly funded BBC and Crown Castle International to acquire digital terrestrial broadcasting licences previously held by ITV Digital. BSkyB also signed a four-year, £95 million contract to carry the Football League matches.

"This is a good result in a traditionally poor quarter,'' Wilton Fry, analyst at Credit Suisse First Boston, told Reuters.

BSkyB on Wednesday also posted a net loss of £1.3 billion, up from a loss of £538.6 million in fiscal 2001. It wrote off its stake in Germany's collapsed Kirch Pay-TV at a cost of £984 million.

BSkyB (BSY) shares were up 5.4 percent to 624 pence in mid-morning London trading on Wednesday.