Sky shares rocket to 14-year high as operating profits hit £1bn mark

Sky reported its strongest third-quarter numbers for 11 years

(Getty Images)

Shares in Rupert Murdoch’s Sky have pushed through £11 for the first time in 14 years as it reported its strongest third-quarter numbers for 11 years.

Sky shares rose 53p to 1,105p, a gain of 5 per cent. The last time they were at this level was in the dotcom boom-and-bust of 2000, when they peaked at 2,168p in March of that year.

Another 127,000 customers signed up to Sky in the UK and Ireland in the past three months, which was 41 per cent ahead of the same time last year and well ahead of analysts’ forecasts of just over 100,000. Churn, the rate at which customers change suppliers, also dropped to an 11-year low of 10.1 per cent.

Jeremy Darroch, its chief executive, said: “It was an outstanding performance in the UK and Ireland. We are getting the big stuff right. We have significantly improved and broadened our content.

“We have also delivered significantly increased customer loyalty in each of our businesses. Fortitude became our most successful UK-originated programme to date, with 2.7 million viewers at launch and another series on the way.”

Including Sky Germany and Sky Italia, where Mr Murdoch engineered full takeovers by Sky last year, group revenues rose by 5 per cent to £8.5bn and operating profits shot up 20 per cent to £1bn.

After the success of Fortitude and Sky Italia’s exclusive homegrown drama 1992, all three Sky countries are involved in the first jointly commissioned drama The Last Panthers, starring Samantha Morton, John Hurt and Tahar Rahim, which will be screened later this year. After paying a record £4.2bn for another three years of Premier League football rights, Sky raised its subscription prices earlier than usual at the start of this month.

As more and more people connect their Sky boxes to the internet it is picking up increasing revenues from services such as On Demand, Now TV, Sky Box Sets and people paying for Buy & Keep films.

Despite the plethora of ways in which UK consumers can and do watch TV, Mr Darroch is sanguine about the threat of Netflix and others: “They have been in the UK for some years and it is not an either or choice. Our customers might use both Netflix and our On Demand services. We will continue to grow strongly and others will grow as well.”

The broker Numis raised its target price for Sky shares to 1,200p on the back of the broadcaster’s results.