FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934
For the month of February 2006
1 February 2006
BRITISH SKY BROADCASTING GROUP PLC
(Name of Registrant)
Grant Way, Isleworth, Middlesex, TW7 5QD England
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F
Form 20-F X Form 40-F
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934
Yes No X
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): Not Applicable
EXHIBIT INDEX
Exhibit
EXHIBIT NO.1 Press release of British Sky Broadcasting Group plc
announcing Interim Results released on 1 February 2006
1 February 2006
BRITISH SKY BROADCASTING GROUP PLC
Results for the six months ended 31 December 2005
BSkyB announces the highest net subscriber growth for three years, record growth
in Sky+ and Multiroom households and a 16% increase in operating profit to
GBP414 million
Operating highlights
- Net DTH subscriber growth of 215,000 (2004: 192,000) in the quarter to
8.1 million (2004: 7.6 million)
- Sky+ households increased by 254,000 (2004: 168,000) in the quarter to
1,281,000 (2004: 642,000), 16% penetration of total DTH subscribers
- Multiroom households increased by 158,000 (2004: 116,000) in the
quarter to 906,000 (2004: 473,000), 11% penetration of total DTH subscribers
- Completion of Easynet acquisition enhances growth potential and
positions the Group to deliver further value for customers and shareholders
- Successful launch of new services enable millions of Sky digital
viewers to access content through their mobile and PC
Financial highlights
- Revenue increased by 9% to GBP2,136 million
- Gross margin expanded by three percentage points to 62%
- Operating profit increased by 16% to GBP414 million, a margin of 19%
- Profit for the period increased by 12% to GBP274 million
- Earnings per share increased by 17% to 14.9 pence
- Free cashflow increased by 29% to GBP318 million
- Interim dividend of 5.5 pence per share declared, an increase of 38%
James Murdoch, Chief Executive said:
"The business is moving forward on all fronts, including strong growth in
earnings and cash flow. In the last quarter, more customers joined Sky than at
any time in the last three years and we've seen record growth in Sky+ and
Multiroom households. Now nearly one in three families chooses Sky.
This year, we'll push the bar further with the launch of high-definition TV and
our broadband service. We are well positioned to sustain our growth as existing
and future customers tell us that Sky is their preferred brand for new
entertainment and communications services. Results like these reinforce our
confidence that we will achieve our goal of 10 million customers in 2010."
Results highlights
All financial results have been prepared in accordance with International
Financial Reporting Standards ("IFRS"), including comparatives.
Key subscriber information 2005 2004 Change % Change
Net DTH subscriber additions(1) 215,000 192,000 23,000 12%
Total DTH subscribers(2)(3)(4)(5) 8,059,000 7,609,000 450,000 6%
Net Sky+ household additions(1) 254,000 168,000 86,000 51%
Total Sky+ households(2) 1,281,000 642,000 639,000 100%
Net Multiroom household
additions(1)(6) 158,000 116,000 42,000 36%
Total Multiroom households(2) 906,000 473,000 433,000 92%
Income statement (GBPm) Six months to 31 December
2005 2004 Change % Change
Revenue 2,136 1,957 179 9%
Operating profit 414 356 58 16%
Operating profit margin 19.4% 18.2% 1.2% 6.6%
Profit before taxation 390 343 47 14%
Profit for the period 274 245 29 12%
Cash flow information (GBPm) Six months to 31 December
2005 2004 Change % Change
Cash generated from operations 514 407 107 26%
Net debt(2)(7) 458 369 -89 -24%
Per share information (pence) Six months to 31 December
2005 2004 Change % Change
Earnings per share 14.9 12.7 2.2 17%
1. In the three months to 31 December
2. As at 31 December
3. Includes DTH subscribers in Republic of Ireland. (393,000, as at 31
December 2005, 347,000, as at 31 December 2004.)
4. DTH subscribers include only primary subscriptions to Sky (no
additional units are counted for Sky+ or Multiroom subscriptions). This
does not include customers taking Sky's freesat offering or churned
customers viewing free-to-air channels.
5. DTH subscribers include subscribers taking Sky packages via DSL through
Kingston Interactive Television and Homechoice.
6. Multiroom includes households subscribing to more than one digibox.
(No additional units are counted for the second or any subsequent Multiroom
subscriptions.)
7. Cash, cash-equivalents, short-term deposits, borrowings and borrowings
related financial instruments
Enquiries:
Analysts/Investors:
Andrew Griffith Tel: 020 7705 3118
Robert Kingston Tel: 020 7705 3726
E-mail: investor-relations@bskyb.com
Press:
Matthew Anderson Tel: 020 7705 3267
Robert Fraser Tel: 020 7705 3036
E-mail: corporate.communications@bskyb.com
Finsbury:
Alice Macandrew Tel: 020 7251 3801
There will be a presentation to analysts and investors at 09:30 a.m. (GMT) today
at the LSE, 10 Paternoster Square, London, EC4M 7LS.
A conference call for US analysts and investors will be held at 10:00 a.m. (EST)
today. Details of this call have been sent to North American institutions and
can be obtained from John Sutton at Taylor Rafferty on +1 212 889 4350.
A live webcast of the presentation to analysts and investors, together with this
press release, will be available today on Sky's corporate website which may be
found at www.sky.com/corporate. Interviews with James Murdoch, CEO and Jeremy
Darroch, CFO, in audio / video and transcript will be available from 7:00 a.m.
today at www.sky.com/corporate and www.cantos.com.
OVERVIEW
During the three months ended 31 December 2005 ("the quarter"), Sky exceeded the
target it set two and a half years ago of 8 million direct-to-home ("DTH")
digital satellite subscribers by the end of calendar year 2005.
Over the same time period, Sky has expanded gross margin(1) by 12 percentage
points to 62%, operating profit margin by eight percentage points to 19% and has
just recorded the sixteenth consecutive quarter of year on year growth in
earnings per share(2).
Growth in the number of households subscribing to Sky+ and Multiroom has also
accelerated over this two and a half year period. At 30 June 2003, one in every
sixty-five Sky customers subscribed to Sky+. Today this ratio is one in six. The
number of Multiroom households has also grown fivefold.
(1) Defined as revenue less total programming expenses as a proportion of
revenue
(2) The financial results for the years ended 30 June 2003 and 2004 were
prepared under UK GAAP
OUTLOOK
The Group delivered a strong performance in the six months ended 31 December
2005 ("the period") achieving core performance targets including subscriber
growth, sales, operating profit and earnings per share. Operationally, the Group
has continued to enhance the subscriber mix with 16% penetration of Sky+, 11%
penetration of Multiroom and 73% of DTH customers subscribing to one or more
premium channels.
After a strong focus on customer acquisition in the important pre-Christmas
selling period, the priority for the first half of calendar 2006 will be on
executing a number of key work streams that will support and strengthen Sky's
capacity for growth and innovation, and enable the business to drive the pace of
change in the industry. These include:
- Completing the migration of all eight million customers to the
recently introduced CRM system, currently being used for new customers only;
- The national launch of high definition TV; and
- The development and preparatory work for the launch and roll-out of
residential broadband services.
Against this background, and with the main benefits of these operational
initiatives starting to accrue in the run up to Christmas 2006, the Group
expects the phasing of subscriber growth to be weighted towards the second half
of this calendar year. Continued growth is anticipated in both the remaining
quarters of this financial year with the Group planning to add a total of around
100,000 net subscribers by 30 June 2006. Looking further out, the Group remains
on track to achieve its medium-term targets of 10 million DTH subscribers in
2010, with 25% penetration of Sky+ and 30% penetration of Multiroom.
OPERATING REVIEW
At 31 December 2005, the total number of DTH digital satellite subscribers was
8,059,000, representing a net increase of 215,000 in the quarter, the highest
net growth since the equivalent period three years ago. Gross DTH subscriber
additions in the quarter increased by 15% year on year to 426,000, the highest
rate of growth for five years.
During the three months ended 31 December 2005, over a quarter of a million
households subscribed to Sky+ for the first time, taking the total number of
Sky+ households to 1,281,000, 16% penetration of total DTH subscribers. 84% of
customers state that Sky+ improves the quality of the TV programmes they watch
and over half say that Sky+ had introduced them to programmes and subjects that
they previously would not have watched. The Sky+ experience, which gives
customers real choice and the flexibility to control and manage how they consume
entertainment within the home continues to rate highly; four out of five
customers rate their satisfaction at least '8' on a scale of '1' to '10' with
one in three giving it the perfect '10' score(3).
Supported by the growth of Sky+, the number of households taking more than one
subscription increased by a record 158,000 driving the total number of Multiroom
households to 906,000, 11% penetration of total DTH subscribers. As with Sky+,
Multiroom customers show increased levels of loyalty and a higher propensity to
take premium channels.
Annualised average revenue per DTH subscriber ("ARPU") increased by GBP12 on the
previous quarter to GBP397, principally benefiting from the changes to UK and
Ireland retail pricing, which became effective on 1 September 2005.
DTH churn for the quarter (annualised) was 10.6%, a reduction of 1.1 percentage
points on the previous quarter. This reflects the seasonal effect of Christmas
and no price changes in the quarter. The Group is trialling a range of
initiatives aimed at improving customer retention over time. These include a new
welcome process, an improved customer information programme and greater use of
predictive modelling to anticipate at risk customers. The Group's medium term
target for churn remains around 10%, but it continues to expect churn for the
2006 financial year to be around 11%.
In a dynamic market place, as entertainment and communications converge, the
Group continues to differentiate itself by evolving its entertainment-led
proposition to give existing and future customers more choice and control over
how, when and where they watch. Following the acquisition of Easynet, the Group
is well positioned to extend its range of innovative products and services
further and set the pace of change in this fast growing market place.
On 10 January 2006, the Sky by broadband service launched giving millions of Sky
digital subscribers' access to hundreds of films and sporting highlights on
their PC. The service, which enables eligible subscribers with a broadband
connection to browse, download and manage content 'on demand' through an
intuitive portal has shown encouraging usage since launch. In the first three
weeks after launch around 52,000 customers joined the service, generating over
70,000 movie downloads. The most popular movie downloads were "Layer Cake", "I
Robot" and "The Girl Next Door".
Since launching Sky Mobile TV in partnership with Vodafone on 1 November 2005,
3G mobile customers have shown a strong appetite for the service during a three
month free period, accessing more than five million unique streams of 'live' and
'made for mobile' content in the 10 weeks to 10 January 2006. It is anticipated
that the service, which gives subscribers access to 19 channels, will be made
available to other mobile networks later this calendar year. The Sky by mobile
service, which is free of charge and exclusive to eligible Sky digital
customers, also launched on 10 January 2006. Customers are able to enjoy sports,
news and entertainment updates and videos on the move, manage their Sky Bet
account and will be able to set their Sky+ box to record, remotely from their
mobile phone later this calendar year.
On 28 November 2005, National Geographic announced that it would be the first
broadcaster to join Sky's High Definition TV line-up. The channel's innovative
and factual coverage of natural history, wildlife and science, combined with the
enhanced picture quality, vibrant colour and sound of High Definition will be an
exciting addition to the HD line-up. On 21 December 2005, Sky and Sony announced
a major new marketing agreement to promote the HD revolution, raise customer
awareness and provide increased value to customers ahead of the scheduled launch
in the first half of this calendar year. A reported 700,000 'HD Ready' TV sets
had been sold by the end of calendar 2005 and an estimated 2 million will have
been sold by the end of calendar year 2006(4).
During the Christmas period, Multichannel television increased its viewing share
from 29.6% to 31.7%(5) with the top three most watched programmes all being on
Sky channels; Everton vs. Liverpool and Charlton vs. Arsenal in Premier League
Football and the UK TV premiere of Shrek 2 on Christmas Day.
In 2005, Sky Sports offered more sport than ever before, broadcasting almost
40,000 hours of coverage, with the six most televised sports all receiving
increased air-time. Highlights during the quarter included exclusive PPV
coverage of Ricky Hatton's victory in the boxing world title unification fight,
the Darts World Championships and England's cricket tour to Pakistan, the 16th
successive winter of Sky coverage. The year ahead brings an exciting schedule
with exclusive coverage of golf's Ryder Cup in September, the England cricket
team's defence of the Ashes starting in November and more imminently, exclusive
coverage of Chelsea vs. Barcelona in the knock-out stages of football's UEFA
Champions League on 22 February 2006.
On 31 October 2005, Sky Three was made available to Sky digital, freesat and
Freeview households offering a mixed schedule that showcases programming from
the Sky One library as well as original lifestyle commissions and travel
documentaries from Sky Travel. The channel has performed well against recent
channel entrants and has helped boost the combined share of the Sky One family
and travel channels by 9% to 2.8% in multichannel homes.
(3) According to an independent survey prepared by ICM Research
(4) GFK / third party forecasts
(5) According to figures from the Broadcaster's Audience Research Board ("BARB")
FINANCIAL REVIEW
Revenue
Total revenues for the period increased by 9% over the six months ended 31
December 2004 ("the comparable period") to GBP2,136 million.
DTH revenues increased by 9% on the comparable period to GBP1,554 million. This
was driven by 6% growth in the average number of DTH subscribers and a 3%
increase in average DTH revenue per subscriber, principally due to the September
2005 price rise.
Wholesale revenues increased by 3% on the comparable period to GBP112 million,
mainly due to the change in wholesale prices in September 2005.
Advertising revenue growth continued to outperform the UK television advertising
sector driven by strong growth in Sky's overall share in this sector to 12.4%.
Advertising revenue increased by 8% on the comparable period, substantially
higher than sector growth of 1.4%, to GBP171 million. With the majority of
agency deals now in place, the Group expects to exceed growth in the UK
television advertising sector in 2006, as was achieved in 2005.
Total SkyBet revenues grew by 15% on the comparable period to GBP136 million.
This was principally due to an increase in activity through Sky Vegas, following
the launch of a number of new casino style games during the period.
Sky Active revenues of GBP46 million were in line with the comparable period.
Growth in revenue from interactive advertising and enhanced TV were offset by a
reduction in revenues from other areas of the business, including the SkyBuy
retail service, which was wound down and closed in the final quarter of last
financial year.
Other revenues increased by 18% on the comparable period to GBP117 million
principally due to the growth in digibox revenues associated with the record
sales in Sky+ and Multiroom, the Sky News channel five contract and revenue
generated from Sky's Credit Card, 'SkyCard'.
Programming costs
Total programming costs were broadly flat on the comparable period, increasing
by GBP4 million to GBP810 million. This resulted in a further increase in gross
margin by three percentage points to 62%.
Sports costs increased by GBP7 million on the comparable period to GBP380
million due to an increased level of live coverage and a deeper sports offering
following the addition of the new A1 Grand Prix competition and the UEFA
Champions League qualifying football matches. The associated increase in costs
was partially offset by the absence of the Ryder Cup, a bi-annual event, in the
period.
Total movie costs decreased by GBP9 million on the comparable period to GBP159
million. The additional costs associated with a larger subscriber base were more
than offset by the benefits of the weaker dollar and savings generated from
recent contract renewals.
Third party channel costs reduced by GBP15 million on the comparable period to
GBP167 million, reflecting a 13% saving in the cost per subscriber per month
partially offset by 6% growth in the average number of DTH subscribers. This
saving has been predominantly driven by the renewal, on improved terms, of a
number of contracts.
Entertainment and news costs increased by GBP21 million on the comparable period
to GBP104 million, reflecting the increased investment in Sky One programming
and the incremental cost associated with the coverage of the hurricanes in
America earlier this year.
Other operating expenses
Marketing costs increased by GBP68 million on the comparable period to GBP332
million. During the period, the group increased the level of gross additions by
15% year on year and enhanced the mix of new customers, with one in five taking
Sky+, as opposed to one in nine last year. As a result of this activity, the
blended subscriber acquisition cost for the period was GBP250. The Group also
continued to drive the penetration of Sky+ and Multiroom to existing
subscribers, with 60% more subscribers upgrading to Sky+ and 53% more upgrading
to Multiroom compared to last year. Above the line marketing costs increased by
GBP3 million on the comparable period to GBP46 million and retention and other
marketing costs were GBP54 million, an increase of GBP8 million on the
comparable period.
Subscriber management costs increased by GBP22 million to GBP215 million,
principally due to higher call volumes associated with the increased sales
activity and the first full quarter of CRM depreciation, following the launch of
the new system on 1 September 2005.
The remaining other operating expenses increased by GBP27 million on the
comparable period to GBP365 million, mainly due to the GBP18 million increase in
betting costs, which increased in line with SkyBet revenues.
Operating profit increased by 16% on the comparable period to GBP414 million
generating a one percentage point increase in operating profit margin to 19%.
After the Group's share of operating profits from joint ventures of GBP7 million
and a net interest charge of GBP31 million, the Group made a profit before tax
in the period of GBP390 million, up from GBP343 million for the comparable
period.
Taxation
The total tax charge for the period was GBP116 million, comprising of a current
tax charge of GBP93 million and a deferred tax charge of GBP23 million. The
Group's underlying effective tax rate, which excludes the effect of joint
ventures, moved from 31.4% for the comparable period to 30.1%, as a result of
reduction in the overall level of profit and loss charges being disallowed for
tax purposes.
The mainstream corporate tax liability for the period was GBP93 million and, in
accordance with the quarterly instalment regime, GBP52 million was paid in
January 2006.
Earnings
The Group's profit for the period increased by 12% to GBP274 million generating
earnings per share of 14.9 pence, a 17% increase on the comparable period.
Cash Flow
Earnings before interest, tax, depreciation and amortisation ("EBITDA")
increased by 16% on the comparable period to GBP470 million. Following a working
capital inflow of GBP44 million, the Group generated a cash inflow from
operations of GBP514 million, up from GBP407 million for the comparable period.
After taxation of GBP76 million, net interest payable of GBP28 million, net
proceeds from joint ventures of GBP2 million and capital expenditure of GBP94
million, the Group generated GBP318 million of free cashflow, an increase of 29%
on the comparable period. After returns of GBP330 million to shareholders,
comprising of GBP92 million through the ordinary dividend and GBP238 million
through the share buy-back programme (excluding GBP2 million of stamp duty and
commissions), fixed asset investments of GBP51 million and other items(6), the
Group's net debt position increased to GBP458 million as at 31 December 2005.
(6) Includes share option exercise proceeds, the revaluation of long-term
borrowings and borrowing-related financial derivatives
CORPORATE
In light of the continued cash generative nature of the Group and reflecting the
strong future prospects of the business, the Board has decided to adjust the
Company's dividend policy whilst ensuring a flexible capital structure.
Accordingly the Board aims to reduce the Company's target dividend cover from
approximately 3.0 times to approximately 2.5 times. In line with this policy,
the Directors are declaring an interim dividend of 5.5 pence per Ordinary Share,
an increase of 38% on the prior year. The ex-dividend date will be 29 March 2006
and the dividend will be paid on 25 April 2006 to shareholders of record on 31
March 2006.
On 6 January 2006, the directors of BSkyB announced that all conditions of the
cash offer for Easynet Group Plc had been satisfied or waived, and accordingly
the offer was declared unconditional in all respects.
On 12 January 2006, the directors of BSkyB announced their intention to exercise
their right, pursuant to the provisions of sections 428 and 430F of the
Companies Act to acquire compulsorily the outstanding Easynet shares to which
the offer relates under the same terms as the offer.
Jacques Nasser has stepped down as Chairman of the Remuneration Committee and
will be replaced as Chairman by Nicholas Ferguson, with immediate effect. Mr
Nasser will however, remain as a member of the Remuneration Committee.
Use of measures not defined under IFRS
This press release contains certain information on the Group's financial
position, operating results and cash flows that have been derived from measures
calculated in accordance with IFRS. This information should not be read in
isolation of the related IFRS measures.
Forward-looking statements
This document contains certain forward-looking statements within the meaning of
the United States Private Securities Litigation Reform Act of 1995 with respect
to the Group's financial condition, results of operations and business, and
management's strategy, plans and objectives for the Group. These statements
include, without limitation, those that express forecasts, expectations and
projections with regard to the potential for growth of free-to-air and pay-TV,
advertising growth, DTH subscriber growth and Multiroom and Sky+ penetration,
DTH revenue, profitability and margin growth, cash flow generation, subscriber
acquisition costs and marketing expenditure, capital expenditure programmes and
proposals for returning capital to shareholders.
These statements (and all other forward-looking statements contained in this
document) are not guarantees of future performance and are subject to risks,
uncertainties and other factors, some of which are beyond the Group's control,
are difficult to predict and could cause actual results to differ materially
from those expressed or implied or forecast in the forward-looking
statements. These factors include, but are not limited to, the fact that the
Group operates in a highly competitive environment, the effects of government
regulation upon the Group's activities, its reliance on technology, which is
subject to risk, change and development, its ability to continue to obtain
exclusive rights to movies, sports events and other programming content, risks
inherent in the implementation of large-scale capital expenditure projects, the
Group's ability to continue to communicate and market its services effectively,
and the risks associated with the Group's operation of digital television
transmission in the UK and Ireland.
Information on some risks and uncertainties are described in the "Risk Factors"
section of Sky's Annual Report on form 20-F for the year ended 30 June 2005.
Copies of the Annual Report on form 20-F are available on request from British
Sky Broadcasting Group plc, Grant Way, Isleworth TW7 5QD or from the British Sky
Broadcasting web page at www.sky.com/corporate. All forward-looking
statements in this document are based on information known to the Group on the
date hereof. The Group undertakes no obligation publicly to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
Appendix 1
Subscribers to Sky Channels
Prior year Q2 Q1 2005/06 Q2 2005/06
as at as at as at
31/12/04 30/09/05 31/12/05
DTH homes1,2 3 7,609,000 7,844,000 8,059,000
Total TV homes
in the UK and
Ireland4 26,249,000 26,417,000 26,585,000
DTH homes as a
percentage of
total UK and
Ireland TV homes 29% 30% 30%
Cable - UK 3,292,000 3,281,000 3,292,000
Cable - Ireland 584,000 588,000 597,000
Total Sky pay homes 11,485,000 11,713,000 11,948,000
Total Sky pay homes
as a percentage of
total UK and
Ireland TV homes 44% 44% 45%
Sky+ homes 642,000 1,027,000 1,281,000
Multiroom homes5 473,000 748,000 906,000
DTT - UK6 4,216,000 5,316,000 6,363,000
1: Includes DTH subscribers in Republic of Ireland. (393,000, as at 31 December
2005, 347,000 as at 31 December 2004.)
2: DTH subscribers includes only primary subscriptions to Sky (no additional
units are counted for Sky+ or Multiroom subscriptions). This does not include
customers taking Sky's freesat offering or churned customers viewing
free-to-air channels.
3: DTH homes include subscribers taking Sky packages via DSL through Kingston
Interactive Television and Homechoice.
4: Total UK homes estimated by BARB and taken from the beginning of the month
following the period end (latest figures as at 1 January 2006). Total Ireland
homes estimated by Nielsen Media Research, conducted on an annual basis in
July with results available in September (latest figures as at July 2005).
5: Multiroom includes households subscribing to more than one digibox. (No
additional units are counted for the second or any subsequent Multiroom
subscriptions.)
6: DTT homes estimated by BARB and taken from the beginning of the following
month (latest figures as at 1 January 2006). These include Sky or Cable homes
that already take multi-channel TV.
Appendix 2
Glossary
Useful Description
definitions
ARPU Average Revenue Per User: the amount spent by the Group's
residential subscribers in the quarter, divided by the average
number of residential subscribers in the quarter, annualised
Churn The rate at which subscribers relinquish their subscriptions,
expressed as a percentage of total subscribers
CRM Customer Relationship Management
Digibox Digital satellite reception equipment
EBITDA Earnings before interest, taxation, depreciation and
amortisation is calculated as operating profit before
depreciation and amortisation or impairment of goodwill and
intangible assets
Effective tax Taxation divided by profit before taxation
rate
Free cash flow Cash generated from operations less net interest paid, taxation
paid, purchase of property, plant & equipment and intangible
assets plus net proceeds from joint ventures and associates
Gross margin Revenue less programming expenses as a proportion of revenue.
HD High Definition
Mainstream Current corporation tax charge for the year.
corporation tax
liability
Multichannel Share of viewers of non-analogue terrestrial television.
viewing share
Multiroom Installation of one or more additional digiboxes in the
household of an existing DTH subscriber.
Net debt Cash, cash-equivalents, short-term deposits, borrowings and
borrowings related derivative financial instruments.
PVR Personal Video Recorder: Digital TV receiver which utilises a
built in hard disk drive to enable viewers to record without
videotapes, pause live TV, and record one programme while
watching another.
Sky + Sky's fully-integrated Personal Video Recorder (PVR) and
satellite decoder.
Underlying Taxation divided by profit before taxation, excluding the
effective tax effect of joint ventures and in respect of adjustments in prior
rate years
Viewing share Number of people viewing a channel as a percentage of total
viewing audience
Consolidated Income Statement for the half year ended 31 December 2005
2005/06 2004/05 2004/05
Half year Half year Full year
GBPm GBPm GBPm
Notes (unaudited) (unaudited) (audited)
------------------------------ ----- ----------- ----------- ---------
Revenue 2 2,136 1,957 4,071
Operating expenses 3 (1,722) (1,601) (3,249)
------------------------------ ----- ----------- ----------- ---------
EBITDA 470 404 914
Depreciation and amortisation (56) (48) (92)
------------------------------ ----- ----------- ----------- ---------
Operating profit 414 356 822
------------------------------ ----- ----------- ----------- ---------
Share of results of joint
ventures and associates 7 8 14
Investment income 20 15 29
Finance costs (51) (45) (87)
Profit on disposal of joint
venture - 9 9
Profit before tax 390 343 787
------------------------------ ----- ----------- ----------- ---------
Taxation 4 (116) (98) (209)
Profit for the period 274 245 578
============================== ===== =========== =========== =========
Earnings per share from profit
for the period
Basic and diluted (in pence) 5 14.9p 12.7p 30.2p
------------------------------ ----- ----------- ----------- ---------
All profit for the period is attributable to equity holders of the parent.
All results relate to continuing operations.
The accompanying notes are an integral part of this consolidated income
statement.
Consolidated Income Statement for the quarter ended 31 December 2005
2005/06 2004/05
Three months Three months
ended 31 ended 31
December December
2005 2004
GBPm GBPm
(unaudited) (unaudited)
-------------------------------------------------- --------- ---------
Revenue 1,113 1,009
Operating expenses (914) (842)
-------------------------------------------------- --------- ---------
EBITDA 231 191
Depreciation and amortisation (32) (24)
-------------------------------------------------- --------- ---------
Operating profit 199 167
-------------------------------------------------- --------- ---------
Share of results of joint ventures and associates 5 7
Investment income 12 8
Finance costs (26) (24)
Profit on disposal of joint venture - 9
Profit before tax 190 167
-------------------------------------------------- --------- ---------
Taxation (56) (44)
Profit for the period 134 123
================================================== ========= =========
Earnings per share from profit for the period
Basic and diluted (in pence) 7.3p 6.4p
-------------------------------------------------- --------- ---------
All profit for the period is attributable to equity holders of the parent.
All results relate to continuing operations.
Consolidated Statement of Recognised Income and Expense for the half year ended
31 December 2005
2005/06 2004/05 2004/05
Half year Half year Full year
GBPm GBPm GBPm
(unaudited) (unaudited) (audited)
----------------------------------------- --------- ---------- --------
Profit for the period 274 245 578
========================================= ========= ========== ========
Unrealised gains (losses) arising during
the period
Cash flow hedges 19 (78) (22)
Tax on cash flow hedges (6) 23 6
13 (55) (16)
----------------------------------------- --------- ---------- --------
Reclassified and reported in profit for
the period
(Gains) losses on cash flow hedges (18) 54 4
Tax on cash flow hedges 6 (16) (1)
(12) 38 3
----------------------------------------- --------- ---------- --------
Net gains (losses) not recognised in
the Income Statement 1 (17) (13)
========================================= ========= ========== ========
Total recognised income for the period 275 228 565
========================================= ========= ========== ========
All recognised income for the period is attributable to equity holders of the
parent.
Consolidated Balance Sheet as at 31 December 2005
31 December 31 December 30 June
2005 2004 2005
GBPm GBPm GBPm
Notes (unaudited) (unaudited) (audited)
------------------------------ ----- ---------- ---------- --------
Non-current assets
Goodwill 417 417 417
Intangible assets 221 169 202
Property, plant and equipment 349 283 335
Investments in joint ventures
and associates 29 25 23
Available for sale investments 52 2 2
Derivative financial assets 13 8 9
Deferred tax assets 79 131 105
1,160 1,035 1,093
------------------------------ ----- ---------- ---------- --------
Current assets
Inventories 568 599 321
Trade and other receivables 389 375 331
Derivative financial assets 29 2 14
Short-term deposits 764 65 194
Cash and cash equivalents 889 642 503
2,639 1,683 1,363
------------------------------ ----- ---------- ---------- --------
Total assets 3,799 2,718 2,456
============================== ===== ========== ========== =======
Current liabilities
Borrowings 174 - -
Trade and other payables 1,376 1,242 1,031
Derivative financial
liabilities 26 41 6
Current tax liabilities 116 110 100
Provisions 6 1 13
1,698 1,394 1,150
------------------------------ ----- ---------- ---------- --------
Non-current liabilities
Borrowings 1,854 911 982
Other payables 23 27 25
Derivative financial
liabilities 80 173 112
1,957 1,111 1,119
------------------------------ ----- ---------- ---------- --------
Total liabilities 3,655 2,505 2,269
------------------------------ ----- ---------- ---------- --------
Shareholders' equity 7 144 213 187
------------------------------ ----- ---------- ---------- --------
Total liabilities and
shareholders' equity 3,799 2,718 2,456
============================== ===== ========== ========== =======
The accompanying notes are an integral part of this consolidated balance sheet.
Consolidated Cash Flow Statement for the half year ended 31 December 2005
2005/06 2004/05 2004/05
Half year Half year Full year
GBPm GBPm GBPm
Notes (unaudited) (unaudited) (audited)
------------------------------ ----- --------- --------- --------
Cash flows from operating
activities
Cash generated from operations 8a 514 407 989
Interest received 16 17 28
Taxation paid (76) (28) (103)
(Increase) decrease in
short-term deposits (570) 71 (60)
Net cash (used in) from
operating activities (116) 467 854
------------------------------ ----- --------- --------- --------
Cash flows from investing
activities
Funding to joint ventures and
associates (2) (4) (4)
Repayments of funding from
joint ventures and associates 1 6 8
Dividends received from joint
ventures and associates 3 7 12
Proceeds from the sale of a
joint venture - 14 14
Purchase of property, plant
and equipment (58) (60) (149)
Purchase of intangible assets (36) (63) (92)
Purchase of available-for-sale
investments (51) - -
Proceeds from the sale of
equity investments - - 1
Net cash used in investing
activities (143) (100) (210)
------------------------------ ----- --------- --------- --------
Cash flows from financing
activities
Proceeds from issue of
guaranteed notes 8b 1,014 - -
Proceeds from disposal of
shares in Employee Share
Ownership Plan ("ESOP") 7 2 4
Purchase of own shares for
ESOP - - (14)
Share buy-back (240) (128) (416)
Interest paid (44) (49) (91)
Dividends paid to shareholders (92) (63) (138)
Net cash from (used in)
financing activities 645 (238) (655)
------------------------------ ----- --------- --------- --------
Effect of foreign exchange
rate changes - - 1
Net increase (decrease) in
cash and cash equivalents 8b 386 129 (10)
============================== ===== ========= ========= ========
The accompanying notes are an integral part of this consolidated cash flow
statement.
Notes to the interim accounts
1 Basis of preparation
The interim accounts for the half year ended 31 December 2005 were approved by
the Board of Directors on 31 January 2006. The 2006 Annual Report & Accounts
will contain the Group's first full financial statements prepared in accordance
with International Financial Reporting Standards ("IFRS") as adopted for use in
the European Union ("EU"). Accordingly, the unaudited accounts for the half year
ended 31 December 2005 and the restatement of financial information for the year
ended 30 June 2005 and the half year ended 31 December 2004 have been prepared
in accordance with IFRS issued by the International Accounting Standards Board
("IASB") as adopted by the EU.
The Group maintains a 52 or 53 week fiscal year ending on the Sunday nearest to
30 June in each year. In fiscal year 2006, this date will be 2 July 2006, this
being a 52 week year (Fiscal Year 2005: 3 July 2005, 53 week year). This interim
report is prepared to 1 January 2006, being the first 26 weeks of the 52 week
year (Fiscal Year 2005: 26 weeks of the 53 week year). For convenience purposes,
the Group continues to date its interim report as of 31 December 2005.
The IFRS information for the year ended 30 June 2005 was derived from
information extracted from the statutory financial statements prepared under UK
GAAP and filed with the Registrar of Companies. The auditors' report on these
accounts was unqualified and did not contain any statement under section 237(2)
or (3) of the Companies Act 1985. The restated IFRS information for the year
ended 30 June 2005 does not constitute statutory accounts as defined in Section
240 of the Companies Act 1985.
These interim accounts have been prepared in accordance with the accounting
policies set out in the document entitled 'IFRS Accounting Policies', which was
issued by BSkyB on 14 September 2005. These interim accounts should be read in
conjunction with that document. The document can be found on our website,
www.sky.com/corporate. An explanation setting out the major differences between
UK GAAP and IFRS for the Group, and reconciliations of UK GAAP to IFRS for the
Income Statement for the year ended 30 June 2005, Statement of Recognised
Interest and Expense for the year ended 30 June 2005, Balance Sheets at 1 July
2004 and 30 June 2005 and Cash Flow Statement for the year ended 30 June 2005
can be found in the document entitled '2005 Results Restated under IFRS'. This
document was published on 14 September 2005 and can be found on the Group's
website, www.sky.com/corporate. Reconciliations for the interim period ended 31
December 2004 are set out in note 11.
The unaudited interim accounts for the half year ended 31 December 2005 do not
constitute statutory accounts as defined in Section 240 of the Companies Act
1985.
2 Revenue
2005/06 2004/05 2004/05
Half year Half year Full year
GBPm GBPm GBPm
(unaudited) (unaudited) (audited)
------------------------------ --------- --------- -------
DTH subscribers 1,554 1,426 2,968
Cable subscribers 112 109 219
Advertising 171 159 329
Sky Bet 136 118 261
Sky Active 46 46 92
Other 117 99 202
2,136 1,957 4,071
------------------------------ --------- --------- -------
3 Operating expenses
2005/06 2004/05 2004/05
Half year Half year Full year
GBPm GBPm GBPm
(unaudited) (unaudited) (audited)
------------------------------ --------- --------- -------
Programming 810 806 1,635
Transmission and related functions 87 87 171
Marketing 332 264 527
Subscriber management 215 193 385
Administration 154 145 295
Betting 124 106 236
1,722 1,601 3,249
------------------------------ --------- --------- -------
4 Taxation
Taxation recognised in the income statement
2005/06 2004/05 2004/05
Half year Half year Full year
charge charge charge
GBPm GBPm GBPm
(unaudited) (unaudited) (audited)
------------------------------ --------- --------- -------
Current tax expense
Current year 93 73 163
Adjustment in respect of prior
years - (8) (8)
Total current tax 93 65 155
------------------------------ --------- --------- -------
Deferred tax expense
Origination and reversal
of temporary differences 23 32 71
Adjustment in respect of prior
years - 1 (17)
Total deferred tax 23 33 54
------------------------------ --------- --------- -------
Taxation 116 98 209
------------------------------ --------- --------- -------
At 31 December 2005 a deferred tax asset of GBP14 million (2004/05: half year
GBP12 million; full year GBP14 million) principally arising from UK losses in
the Group has not been recognised as these losses can be offset only against
taxable profits generated in the entities concerned. There is currently
insufficient evidence to support recognition of a deferred tax asset relating to
these losses.
A deferred tax asset of GBP64 million (2004/05: half year GBP64 million; full
year GBP64 million) has not been recognised in respect of trading losses in the
Group's German holding companies of KirchPayTV on the basis that it is not
probable that these temporary differences will reverse.
A deferred tax asset of GBP330 million (2004/05: half year GBP450 million; full
year GBP330 million) has not been recognised in respect of potential capital
losses related to the Group's holding of KirchPayTV, on the basis that these
temporary differences do not meet the criteria of a reversal being probable. The
Group has realised and unrealised capital losses in respect of football club and
other investments estimated to be in excess of GBP24 million (2004/05: half year
GBP25 million; full year GBP24 million) which have not been recognised as a
deferred tax asset, on the basis that it is not probable that they will be
utilised.
5 Earnings per share
Basic earnings per share represents profit for the period, divided by the
weighted average number of Ordinary Shares in issue during the period, less the
weighted average number of shares held in the Group's ESOP trust during the
period.
Diluted earnings per share represents the profit for the period, divided by the
weighted average number of Ordinary Shares in issue during the period, less the
weighted average number of shares held in the Group's ESOP trust during the
period, plus the weighted average number of dilutive shares resulting from share
options and other potential Ordinary Shares outstanding during the period.
The weighted average number of shares was:
2005/06 2004/05 2004/05
Half year Half year Full year
Millions of Millions of Millions of
shares shares shares
(unaudited) (unaudited) (audited)
------------------------------ --------- --------- -------
Ordinary Shares 1,849 1,939 1,917
ESOP trust Ordinary Shares (4) (4) (4)
Basic shares 1,845 1,935 1,913
------------------------------ --------- --------- -------
Dilutive Ordinary Shares from
share options 2 2 4
Diluted shares 1,847 1,937 1,917
------------------------------ --------- --------- -------
The calculation of diluted earnings per share excludes 34 million share options
(2004/05: half year 41 million; full year 37 million), which could potentially
dilute earnings per share in the future, because they were anti-dilutive for the
period since the expected future proceeds from the options exceeded the average
fair value of shares during the period.
6 Equity dividends
2005/06 2004/05 2004/05
Half year Half year Full year
GBPm GBPm GBPm
(unaudited) (unaudited) (audited)
------------------------------ --------- --------- -------
2004/05 Interim dividend paid:
4.0p per Ordinary Share - - 77
2004/05 Final dividend paid:
5.0p per Ordinary Share
(2003/04: 3.25p) 92 63 63
92 63 140
------------------------------ --------- --------- -------
The proposed interim dividend for the half year ended 31 December 2005 of 5.5
pence per Ordinary Share, was approved by the Directors, and was recognised as a
GBP100 million liability, on 31 January 2006. It will be paid on 25 April 2006
to shareholders of record on 31 March 2006.
The ESOP has waived its rights to dividends.
7 Reconciliation of movement in shareholders' equity
Capital Total
Share Share redemption Special ESOP Merger Hedging Retained shareholders'
capital Premium reserve reserve reserve reserve reserve earnings equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------- ------- ------- ---------- ------- ------- ------- ------- -------- -------------
At 1 July
2004 971 1,437 - 14 (30) 222 (1) (2,447) 166
Share
buyback (37) - 37 - - - - (416) (416)
Recognition
and
transfer
of cash
flow
hedges - - - - - - (18) - (18)
Share-based
payments - - - - (2) - - 17 15
Tax on
items
taken
directly
to equity - - - - - - 5 (3) 2
Profit for
the year - - - - - - - 578 578
Dividends - - - - - - - (140) (140)
At 1 July
2005 934 1,437 37 14 (32) 222 (14) (2,411) 187
Share
buyback (23) - 23 - - - - (240) (240)
Recognition
and
transfer
of cash
flow
hedges - - - - - - 1 - 1
Share-based
payments - - - - 15 - - 1 16
Tax on
items
taken
directly
to equity - - - - - - - (2) (2)
Profit for
the period - - - - - - 274 274
Dividends - - - - - - (92) (92)
At 31
December
2005 911 1,437 60 14 (17) 222 (13) (2,470) 144
--------- ------- ------- ---------- ------- ------- ------- ------- -------- -------------
The period from 1 July 2004 to 30 June 2005 is audited. The period from 1 July
2005 to 31 December 2005 is unaudited.
Share option schemes
At 31 December 2005, the Group's ESOP held 2,991,441 Ordinary Shares in the
Company at an average cost of GBP5.79 per share. During the period, 2,617,771
shares were utilised relating to the exercise of Long Term Incentive Plan,
Equity Bonus Plan, Key Contributor Plan, Executive Share Option Scheme and
Sharesave Scheme awards.
Purchase of own shares
On 12 November 2004, the Company's shareholders approved a resolution at the
Annual General Meeting for the Company to purchase up to 97 million Ordinary
Shares. On 4 November 2005, the Company's shareholders approved a resolution at
the Annual General Meeting for the Company to further purchase up to 92 million
Ordinary Shares. Under the former resolution, during the year ended 30 June
2005, the Company purchased, and subsequently cancelled, 74 million Ordinary
Shares at an average price of 560 pence per share, with a nominal value of GBP37
million, for a consideration of GBP416 million. This represents 4% of called-up
share capital at the beginning of the year. During the half year ended 31
December 2005 the Company purchased, and subsequently cancelled, 45 million
Ordinary Shares at an average price of 528 pence per share, with a nominal value
of GBP23 million, for a consideration of GBP240 million. This represents 2% of
called-up share capital at the beginning of the half year period under review.
8 Notes to consolidated cash flow statement
a) Reconciliation of profit before taxation to cash generated from operations
2005/06 2004/05 2004/05
Half year Half year Full year
GBPm GBPm GBPm
(unaudited) (unaudited) (audited)
------------------------------------- ---------- ---------- --------
Profit before taxation 390 343 787
Adjustments for:
Depreciation of property, plant and
equipment 36 20 47
Amortisation of intangible assets 20 28 45
Loss on disposal of property, plant
and equipment - - 2
Profit on disposal of joint venture - (9) (9)
Net finance costs 31 30 58
Share of results of joint ventures and
associates (7) (8) (14)
470 404 916
------------------------------------- ---------- ---------- --------
(Increase) decrease in trade and other
receivables (54) (13) 34
(Increase) decrease in inventories (211) 275 28
Increase (decrease) in trade and other
payables 312 (248) (67)
(Decrease) increase in provisions (7) - 12
Decrease (increase) in derivative
financial instruments 4 (11) 66
Cash generated from operations 514 407 989
------------------------------------- ---------- ---------- --------
b) Analysis of movements in net debt
As at 1 July Cash Non-cash As at 1 July Cash Non-cash At 31 December
2004 movements movements 2005 movements movements 2005
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
(audited) (audited) (audited) (audited) (unaudited) (unaudited) (unaudited)
-------------- -------- -------- --------- -------- --------- --------- ----------
Cash and cash
equivalents 513 (11) 1 503 386 - 889
Short-term
deposits 134 60 - 194 570 - 764
647 49 1 697 956 - 1,653
-------------- -------- -------- --------- -------- --------- --------- ----------
Borrowings (958) - (24) (982) (1,014) (32) (2,028)
Borrowings-
related
derivative
financial
instruments (99) - (4) (103) - 20 (83)
Net debt (410) 49 (27) (388) (58) (12) (458)
-------------- -------- -------- --------- -------- --------- --------- ----------
On 20 October 2005, the Group issued guaranteed notes (the "new notes")
consisting of US $750 million aggregate principal amount of notes paying 5.625%
interest and maturing on 15 October 2015, US $350 million aggregate principal
amount of notes paying 6.500% interest and maturing on 15 October 2035 and
GBP400 million aggregate principal amount of notes paying 5.750% interest and
maturing on 20 October 2017. The new notes are carried in the balance sheet at
GBP1,024 million at 31 December 2005.
In accordance with the Group's treasury policy, various cross-currency swap
agreements have been entered into to swap the Group's exposure from the new
notes into pounds sterling. In addition, the Group has entered into pound
sterling interest rate swap agreements, which provide for the exchange, at
specified intervals, of the difference between fixed rates and variable rates,
calculated by reference to an agreed notional pounds sterling amount. The total
fair value of new cross-currency swap and interest rate swap agreements
associated with the new notes carried on the balance sheet at 31 December 2005
is GBP10 million.
9 Other matters
Events after the balance sheet date
On 21 October 2005, Sky Broadband Services Limited ("Sky Broadband"), a
subsidiary of British Sky Broadcasting Group plc, made a recommended cash offer
for the entire issued and to be issued share capital of Easynet Group plc
("Easynet"). On 6 January 2006, the offer was declared unconditional in all
respects. On 12 January 2006, Sky Broadband had received valid acceptances of
the offer in respect of more than nine-tenths in value of Easynet shares to
which the offer related and implemented the procedure set out in sections 428 to
430F of the Companies Act 1985 to acquire compulsorily those shares which had
not been assented to the offer. As of 31 January 2006, Sky Broadband has
acquired or received valid acceptances under the offer for 99% of the existing
issued share capital of Easynet.
Contingent liabilities
The Group has contingent liabilities by virtue of its investments in unlimited
companies, or partnerships, which include Nickelodeon UK, The History Channel
(UK), Paramount UK and National Geographic Channel UK.
The Directors do not expect any material loss to arise from the above contingent
liabilities.
Contingent assets
Under the terms of one of the Group's channel distribution agreements, British
Sky Broadcasting Limited is entitled to receive a payment (unless the agreement
is terminated due to the default of the Group), between July and September 2006,
equal to a proportion of the fair value of certain of the channels under that
distribution agreement. The fair value of the channels is to be determined at
the earlier of contract termination and 30 June 2006. Accordingly, it is not yet
possible to determine the value of the payment to be received.
The Group has served a claim for a material amount against an information and
technology services provider, which provided services to the Group as part of
the Group's investment in Customer Relationship Management ("CRM") software and
infrastructure. The amount that will be recovered by the Group will not be
finally determined until resolution of the claim.
Changes in estimates
There have been no material changes in estimates of amounts reported in the six
months ended 31 December 2005 or in the year ended 30 June 2005.
10 Regulatory update
European Commission Investigation - Football Association Premier League Limited
("FAPL")
The European Commission's investigation into the FAPL's joint selling of
exclusive broadcast rights to football matches is close to being concluded: the
Commission published a notice on 30 April 2004 inviting third party comments on
its intention to adopt a decision, making commitments offered by the FAPL
legally enforceable and to close its file. Among other things, these commitments
addressed the next auction of rights by the FAPL for the 2007/08 and subsequent
seasons and included a commitment that no single broadcaster would be able to
buy all of the packages of live rights.
In November 2005 the Commission announced that it had received improved
commitments from the FAPL and that these revised commitments addressed points
raised in the public consultation, including: specifying the precise terms of
the "no single buyer" rule and the conduct of the auction process; the creation
of more evenly balanced packages of rights; and increasing the availability of
rights to broadcast via mobile phones.
The Commission has stated that it will prepare a draft decision rendering the
revised commitments legally binding. This will be sent to the competition
authorities of Member States for consultation, following which the Commission
will issue a final decision, no later than the first quarter of 2006.
The Commission confirmed in 2004 in a "comfort letter" that, on the basis of
performance by the Group of certain commitments given by the Group to the
Commission, it has fully and finally settled the Commission's other
investigations in connection with the Group's bids for all rights in relation to
FAPL matches throughout the 2004/05 to 2006/07 FAPL seasons and any resulting
agreements between the Group and FAPL.
European Commission Sector Inquiry - "New Media" Sports Rights
In September 2005, the European Commission published its concluding report on
its sector inquiry into the provision of audio-visual content from sports events
over 3G networks, which it had initiated in January 2004.
The European Commission has identified a number of commercial practices which it
considers raise competition concerns in relation to the availability of mobile
sports content and on which it states that it will focus in the future. Among
others, these include: (i) the sale of what the European Commission considers to
be bundled audiovisual rights for various retail platforms to one or a few
operators, in relation to which the European Commission has said that it will
target situations where rights to premium sports remain under-exploited through
such bundled sale of rights and subsequent warehousing of rights by powerful
operators; and (ii) restricting the length and timing of 3G transmissions of
sports coverage, which the European Commission considers may have a negative
impact on the value of 3G rights and the take-up of 3G sports services by
consumers.
The European Commission has stated that it will take account of the findings of
the sector inquiry in future proceedings in this area. It has also stated that
it will further review, together with the relevant national competition
authorities of Member States, potentially harmful situations identified during
the sector inquiry, and that procedures will be initiated in cases where
behavior is not adjusted to comply with the requirements of competition law.
The European Commission has not announced any proceedings arising from
situations identified in the sector inquiry or publicly indicated which
individual companies might be the subject of proceedings. At this stage, the
Group is unable to determine whether the European Commission's concluding report
or any subsequent proceedings might have a material effect on the Group.
Ofcom review of conditional access guidelines
In May 2005, the Office of Communications ("Ofcom") initiated a review of its
guidelines entitled "The pricing of conditional access services and related
issues". These guidelines, which were originally adopted by the Office of
Telecommunications (Oftel) in May 2002, set out Ofcom's policy towards the
regulation of the supply of conditional access (and access control) services
(including the structure of tariffs charged for such services).
In November 2005, Ofcom published a consultation document as part of this review
entitled "Provision of Technical Platform Services - a consultation on proposed
guidance as to how Ofcom may interpret the meaning of "fair, reasonable and
non-discriminatory" and other regulatory conditions when assessing charges and
terms offered by regulated providers of Technical Platform Services". The
deadline for comments on this consultation document is 1 February 2006. The
Group is co-operating with this review and at this stage, is unable to determine
whether the review will have a material effect on the Group.
11 UK GAAP to IFRS reconciliations
The following is a summary of the effects of the adjustments from UK GAAP to
IFRS for the half year ended 31 December 2004. An explanation of the major
differences between UK GAAP and IFRS for the Group is included in the document
entitled '2005 Results Restated under IFRS'. This document was published on 14
September 2005 and can be found on the Group's website, www.sky.com/corporate.
2004/05
Half year
GBPm
(unaudited)
------------------------------------------------------ ---------
Profit for the period under UK GAAP 154
Adjustments:
Goodwill amortisation 57
Profit on disposal of joint venture 32
Financial instruments and hedge accounting 10
Share-based payments (6)
Tax impact of IFRS adjustments (2)
Profit for the period under IFRS 245
------------------------------------------------------ ---------
31 December
2004
GBPm
(unaudited)
------------------------------------------------------ ---------
Shareholders' equity under UK GAAP 83
Adjustments:
Goodwill amortisation 57
Deferred taxation 10
Share-based payment 19
Financial instruments and hedge accounting (36)
Joint ventures 3
Dividend accrual 77
Shareholders' equity under IFRS 213
------------------------------------------------------ ---------
There were no material adjustments to the cash flow statement for the half year
ended 31 December 2004.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BRITISH SKY BROADCASTING GROUP PLC
Date: 1 February 2006 By: /s/ Dave Gormley
Dave Gormley
Company Secretary