Sky boosted by strong European demand

<p>Sky has posted a 20 per cent rise in operating profit.</p>

Rising demand from across Europe has been the catalyst for a 20 per cent increase in operating profit at Sky.

The pay-TV broadcaster confirmed that it had performed well in the nine months to the end of March with operating profits growing to £1 billion, a significant boost on the £854 million recorded a year earlier. The decision to merge Sky Deutschland and Sky Italia in May 2014 has proved to have a positive effect.

Last year, BSkyB confirmed an interest in purchasing the German and Italian operations of Sky allowing it to "have the potential to create a world-class multinational pay-TV group". The deal was finally reached and it already looks to be paying dividends as Sky's performance continues to grow from strength to strength.

The broadcaster has seen record third quarter growth in customer numbers in Germany and Austria while it has witnessed a drop in the amount of people cancelling subscriptions. Across its operations, Sky added 242,000 net new customers during the third, a 70 per cent uplift on the same period a year earlier.

Jeremy Darroch, Sky chief executive, said: "As these results demonstrate, our teams are working well together right across the new Sky. Five months in, our integration plans are progressing well and we are well positioned for the expanded growth opportunity ahead."

Popular sports coverage

One of the main selling points of Sky's service is its coverage of sporting events, namely football. In both the UK and Germany, Sky has seen an increase in viewers watching Premier League and Bundesliga respectively.

Sky noted that the Bundesliga enjoyed a good quarter and set a new ratings record, taking ten per cent of all television viewing during the Saturday afternoon slot. The Capital One Cup Final between Chelsea and Tottenham Hotspur commanded a peak audience of 2.4 million, up from 11 per cent on last year's final.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.