The Directors have declared an interim dividend of 9.2 pence per share. This represents an increase of 5% year on year and is the eighth consecutive year of increased dividend for shareholders. As previously stated, our intention is to maintain a policy of paying out 50% of full year adjusted earnings as dividends with the final dividend payments typically forming the higher proportion of the total dividend.
The ex-dividend date will be 28 March 2012 and the dividend will be paid on 24 April 2012 to shareholders of record on 30 March 2012.
Excellent financial performance; strong growth across the board
· Revenue up 6% to £3.4 billion
· Highest ever first-half adjusted operating profit, up 16% to £601 million
· Efficiency programmes delivering lower operating costs; adjusted operating margin up 160 basis points to 17.9%
· Adjusted basic EPS up 20% to 24.0 pence
· Adjusted free cash flow up 12% to £495 million
· Interim dividend up 5% to 9.20 pence, in addition to the £750 million buy-back initiated on 29 November 2011
Continued growth in products and customers in the quarter
§ Total net product growth of 772,000 to 26.8 million, up 13%
§ Added 100,000 new households to reach 10.471 million customers
§ Good response to price freeze; strong customer loyalty in a tough economic environment with churn of 9.6%
§ Continued improvement in product mix with more than three million customers taking all three of TV, broadband and telephony, up by 26% year on year
§ Customers responding to leading innovation with 2.5 million users of Sky Go to date
Strong set of plans for 2012
§ Bringing more high quality content for Sky customers, including home grown comedy and drama and a new channel dedicated to Formula 1
§ New agreements to add BBC iPlayer and ITV Player to Anytime+
§ Free access to 10,000 WiFi hotspots to Sky Broadband Unlimited customers
§ Fibre broadband available to c30% of UK households from April, offering up to 40Mb broadband speeds and truly unlimited usage for £20 a month
§ Launching a new internet based pay TV service aimed at new customers
§ Creating 1,300 Sky jobs across the UK and Ireland over the next two years
Jeremy Darroch, Chief Executive, commented:
"It has been a strong first half with progress on all fronts. While these are tough times for many consumers, our customers are staying loyal and more households continue to join us. From broadband to high definition, people are choosing Sky for a wider range of products than ever, underlining the transformation of our business over the last few years.
"Our approach to growth is working well. We're adding more value to the Sky subscription by investing where it matters most to customers, with more great entertainment and ground-breaking innovation like Sky Go. Alongside that, we're improving efficiency behind the scenes so we can expand margins at the same time. Financially, we've delivered another strong result, with our highest ever first-half operating profit and 20% growth in earnings per share. On the back of this, we're increasing the dividend again and have started our share buyback programme to increase returns for our shareholders.
"We expect the environment to remain tough in calendar 2012. No consumer business can be immune to these conditions and we will manage any short-term headwinds as they emerge. Staying focused on the long-term opportunity, we've got a strong set of plans to keep delivering for customers and shareholders. This will be an outstanding year on screen, including more original British productions and a new channel dedicated to Formula 1, and we have exciting products in the pipeline that will create more ways to access our content and more reasons to join and stay with us."
