Growth in paid-for products up 42%year on year
873,000 new paid-for subscription products in Q2
High Definition and Broadband now in 5 million homes
36% of customers now take triple play, 534,000 more than a year ago
Leading in connected TV growth; investment driving returns
Record growth in connected Sky+HD boxes, up 1 million in Q2 to 4.4 million
Threefold increase in On Demand usage
Sky Store transactional revenues up 100%
Extending leadership in content across all genres
Major new partnership with HBO
Landmark deal with ITV to include new drama channel exclusive to Sky
Record audiences for new UK commissioned drama
Sky Sports viewing at highest level for 6 years
Good financial performance in line with expectations
Adjusted revenue up 8% to £3,751 million
Adjusted EBITDA flat at £813 million despite investment in connected TV services and one-off step up in Premier League costs
Adjusted basic earnings per share down 3.5% to 27.3 pence
Interim dividend up 9% to 12.0 pence
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Jeremy Darroch, Chief Executive, commented:
"We had a very good first six months of the year as we reaped the benefits of our broader-based approach to growth. In a consumer environment that remains challenging, customers continued to choose to take Sky products in ever greater numbers in the run-up to Christmas, with Q2 growth up by over 40% on last year. In the last 12 months, we have added 3.8 million paid-for subscription products, the fastest rate of annual growth in three years.
"Customer demand in Q2 was strong across the board with good growth in all products. In a good quarter for TV growth, HD passed the milestone of 5 million customers, boosted by the success of our autumn advertising campaign with Joanna Lumley. Home communications also did well as customers continued to respond to the market-leading quality and value that Sky offers. Total sales of home communications products increased 4% year on year in the first half.
"The investments we are making to accelerate growth in connected TV services are delivering excellent results. We added a record 1 million connected Sky+HD boxes in Q2 - almost 11,000 a day - to take our base of connected homes to 4.4 million. This explosive growth means that Sky has quickly established itself as Britain's biggest connected TV platform and, with millions of customers yet to connect their boxes, there is still a big opportunity ahead.
"Everything that we see tells us that customers love the benefits that come with the connected box. On Demand usage more than trebled year on year and the number of movie rentals through Sky Store doubled as customers responded to greater flexibility and choice. More customers than ever are choosing Sky Go to watch content both in and out of the home, helped by the addition of 14 new entertainment channels and the launch of Sky Go on more connected devices. We continue to see significant opportunity for accelerated growth and returns as we use our innovation to differentiate our offering and give Sky customers the best ways to enjoy our content.
"We have further strengthened our market-leading content offering through significant new partnerships. An expanded partnership with HBO will see the two companies work together to co-produce major new cinematic drama series while Sky Atlantic remains the exclusive home of HBO programmes until 2020. In addition, a landmark new deal with ITV means there will be no better place to enjoy ITV on multiple devices, both at home and on the go.
"Our financial performance was strong in the first half and we remain on track for the full year. Good operating momentum led to an 8% increase in revenues for the period, excluding revenues from the discontinued retailing of ESPN. We are moving through a year of investment in which we are absorbing the one-off step up in Premier League costs well, with adjusted EBITDA flat thanks to a continued focus on operating efficiency. The 9% increase in the interim dividend to 12.0 pence, the tenth consecutive year of growth, reflects our confidence in the strength of our business and the progress we are making."
