Sky Europe’s numbers shape up
January 29, 2015
Jeremy Darroch will unveil his latest set of numbers for his Sky Europe trio of pay-TV broadcasters on February 4th, and one market analyst admits it could be a “bit of a mess”.
The criticism is not about the numbers themselves but for the market to get a handle on a new set of benchmarks. This is the first quarter to include the now consolidated Germany and Italian divisions of Sky and not helped by lack of historical financial data, new reporting lines and inter-company trading (Sky UK sells set-top boxes to Sky Italia), the end of Sky Bet, and the number-crunchers expect adjustments and alterations to be made to the GAAP (Generally Accepted Accounting Principles) formula used.
Investment bank Exane BNP-Paribas sums up the position saying “the margin for error on forecasts is greater than normal”.
Nevertheless, the bank expects about 100,000 new customers coming aboard the UK numbers because of price cuts at NOWTV albeit with a lower ARPU, and a modest recovery in broadband net additions (up about 85,000) but driven by aggressive promotion by Sky. At the end of the day the bank expects this quarter-year to be the best for product growth at Sky UK for product growth for some time.
Sky Germany is expected to benefit from strong promotional activity, although ARPU is expected to be flat because of the broadcasters continued support of 2 year contract periods.
Sky Italy is expected to be flat, in customers and ARPU, although there could be a boost from the launch of Sky 1 via IPTV in April.
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