MIDDLESEX, UNITED KINGDOM--(Marketwire - Nov 1, 2012) -


Unaudited results for the three months ended 30 September 2012

                            Adjusted results

Three months to 30 Sept    2013         2012         Variance

Revenue                    GBP1,715m    GBP1,657m    +4%

EBITDA                     GBP392m      GBP381m      +3%

Operating profit           GBP310m      GBP295m      +5%

Earnings per share (basic) 13.4p        11.6p        +16%

Robust quarterly performance with broad product growth and strong

* Good growth in products and customers, up 533,000 and 48,000

* One in three customers now takes all three of TV, broadband and

* Strong customer loyalty with Q1 churn of 10.9%

Extending leadership in content

* Long-term renewals in sports and movies providing certainty on
content leadership

* Spectacular success of Ryder Cup - 4.8m viewers and 700,000
  unique Sky Go users

Bringing world-class innovation to customers

* Launch of catch up service offers the best of pay and free TV on

* Award-winning Sky+HD box re-launched with six times more storage

* Unique users of Sky Go up 75%, confirming leadership in
  over-the-top content delivery

Top-line growth and operational efficiency driving strong financial

* Revenue up 4%

* Adjusted operating profit up 5%

* Adjusted basic earnings per share up 16%

* Approval sought at 2012 AGM for further GBP500m share buy-back
  programme in 2012/13

Jeremy Darroch, Chief Executive, commented: "We have made a strong
start to the year, delivering another good
quarterly performance and continuing to position the business for the
long term. Our investment in high quality content and innovative
services has delivered excellent levels of loyalty and generated good
growth in customers and products. At the same time, we continue to
drive improvements in efficiency, reliability and customer service
throughout our operations. This approach continues to generate strong
financial results with good growth in revenues and earnings. Looking
forward, whilst we continue to see a challenging consumer environment
in the UK and Ireland, we are well positioned to execute our plans for
the year.

Results highlights

Customer Metrics (unaudited)

                          As at     As at      Annual   Quarterly Growth
                          30-Sep-12 30-Sep-11  Growth   to 30-Sep-12

Total products ('000s)    28,898    26,058     +2,840   +533

 TV                       10,308    10,213     +95      +20

 HD                       4,468     3,925      +543     +125

 Multiroom                2,423     2,295      +128     +21

 Broadband                4,103     3,485      +618     +102

 Telephony                3,888     3,248      +640     +120

 Line rental              3,708     2,892      +816     +145

Total customers ('000s)   10,654    10,371     +283     +48

Products per customer     2.7       2.5        +0.2

Other metrics

Customers taking each of
TV, broadband & talk      33%       28%       +5%

ARPU (2)                  GBP550    GBP535    +GBP15

Churn (2)                 10.9%     11.1%

An additional KPI summary table containing further detailed disclosure
may be found in Schedule 1.

Business Performance (1)(unaudited)
GBP'millions                     3 months to  3 months to
                                 30-Sep-12    30-Sep-11     Movement

Revenue                          1,715        1,657         +4%

Adjusted EBITDA                  392          381           +3%

Adjusted operating profit        310          295           +5%

% Adjusted operating profit
margin                           18.1%        17.8%         +30 bps

Adjusted basic earnings per      13.4p        11.6p         +16%
share (3)

1 A reconciliation of adjusted operating profit and adjusted EBITDA to
reported measures is set out in Appendix 2.

2 Quarterly annualised.

3 Adjusted basic EPS is calculated from adjusted profit for the period.
A reconciliation of reported profit to adjusted profit is set out in
note 3 to the consolidated financial information.


In the three months to 30 September 2012 ("the quarter") we have
continued to focus on improving the customer experience: delivering
great TV, providing leading innovation and improving service delivery.
This approach has driven strong customer loyalty and good product and
customer growth. Churn improved year on year to 10.9% and we added
533,000 net products in the quarter, growing the total number of
products year on year by 11% to reach 28.9 million. We also added
48,000 new Sky households to reach 10.654 million, with 28,000 new
standalone home communications customers and 20,000 new TV customers.
As customers choose to take more products from us, ARPU has grown to a
new high of GBP550.

Our home communications proposition performed strongly, with combined
quarterly net growth of 367,000, comprising 102,000 broadband, 120,000
telephony and 145,000 new line rental customers. Our triple-play base
has grown by 19% year on year, with 3.5 million or one in three
customers, now taking each of TV, broadband and talk.

Total HD customers reached 4.5 million, with 125,000 net additions in
the quarter. This reflected continued strong demand for the product
alongside the success of our 'Summer of Sport in HD' campaign. The
strength of our offering, including our dedicated Formula 1 channel
which launched in April, has driven increased demand for our premium
channels and their HD versions across other platforms. Our multiroom
base also grew by 21,000 to 2.4 million.

Our financial performance for the quarter was strong, with year on year
increases in revenue, adjusted profits, adjusted margins and adjusted
earnings. Revenue growth of 4% combined with an absolute reduction in
adjusted other operating costs to deliver adjusted operating profit of
GBP310 million, up 5%, and an adjusted operating margin expansion to
18.1%. Adjusted basic earnings per share grew by 16% to 13.4 pence.

Extending leadership on screen

With the London 2012 Olympic and Paralympic games falling in the
quarter, we focused attention on providing a differentiated offering
for our customers. In addition to the main terrestrial channels, Sky
customers had access to the most comprehensive BBC coverage of the
Olympics in HD via 24 dedicated channels plus 100 hours of 3D coverage
from Eurosport on Sky 3D. In total, over 14 million people watched the
dedicated channels in Sky homes generating a viewing share of 7% during
the games.

It was a strong September for Sky Sports. We achieved record
audiences for tennis, with Andy Murray's US Open Tennis victory
attracting 4.5 million viewers. We also had a spectacular response to
our coverage of the Ryder Cup, reaching 4.8 million viewers across Sky
Sports 1 and 700,000 unique users on Sky Go. We reinforced our position
as the home of live cricket by securing six more England overseas
tours, including next year's Ashes. Long-term agreements with three
international cricket boards will bring a range of live Test cricket
from Australia, South Africa and India until at least 2016. Alongside
this, we agreed a new four-year deal with the ERC for exclusive live
coverage of European Rugby competitions - the Heineken Cup and Amlin
Challenge Cup - until 2018. These new deals complete sixteen recent
long-term renewals for Sky Sports within the last 18 months, meaning we
now have a stronger line up of live sport for our viewers than ever

We also delivered a strong schedule from September on our entertainment
channels. Sky Atlantic launched nine new commissions in the quarter,
including 'Alan Partridge Open Books', 'British Cycling: Road to Glory'
and 'The British', while Sky1 saw successful launches of 'Sinbad' and
'A Touch of Cloth'. Over 30% of subscribers now say Sky Atlantic is a
"must have" channel for them, while 50% say the same for Sky1, making
it the most popular pay TV channel.

In movies, we further strengthened our offering with a comprehensive
new agreement with Warner Bros. This agreement spans the pay-per-view
and first subscription pay TV windows, and means that subscribers to
Sky Movies, including customers of NOW TV, will enjoy exclusive access
to Warner Bros. new releases as little as six months after they have
ended their run in cinemas.

Innovating to add value for customers

We continue to lead the market in product innovation, driving strong
usage of existing products and adding value to customers by bringing
new ways to consume Sky's content.

Our world-class over-the-top service for Sky customers, Sky Go, goes
from strength to strength. Usage of the service is building as
customers access more of the content they love wherever and whenever
they want. Unique users of the service increased in the quarter to
reach a new high of 2.8 million, up 75% on the prior year, with
particularly strong usage around the Ryder Cup as customers kept up
with the dramatic European victory.

We re-launched our award-winning Sky+ service during the quarter,
step-changing Britain's most popular personal video recorder. The
first-time inclusion of a new 7-day Catch Up TV section within our On
Demand service (previously Anytime+) means that programmes from both
Sky and terrestrial channels are now seamlessly integrated into the
Sky+ experience. At the same time, we introduced a new Sky+HD 2TB box
providing capacity to store up to 350 hours of HD content and giving
customers more personal storage than any other subscription TV
provider. We also continue to innovate around Sky+ to enhance the
customer experience away from the main TV screen with the launch of a
new app for iPad which allows customers to connect to online
communities around virtually every show on television, across Sky and
other channels. All of these new features mark the latest stage in the
on-going development of Sky+, which is now enjoyed in over nine million
homes - more than all of the other competing pay TV services added

We continue to offer customers greater flexibility in the ways in which
they can access our content with a growing proportion of households now
having fully-connected set-top boxes. Around 1.3 million households
have activated our full on-demand service by connecting their Sky+HD
box to the internet and on average are downloading more than three
pieces of on-demand content per week. Customers can now rent a movie
instantly via Sky Store, with a choice of over 1,000 titles available
on-demand from 99p. Despite the closure of half the Sky Box Office
(SBO) channels in the quarter to allow for our extended coverage of the
Olympics, transactions via our pay-per-view services were up 3% year on
year (excluding the impact of a one-off boxing fight in the prior

We launched our second pay TV brand, NOW TV, in the quarter offering a
new way to access Sky Movies. We will continue to build awareness of
the service as we focus on movies in the run up to Christmas and we are
planning to introduce content from Sky Sports by the end of the year.

Improving service delivery

Market-leading customer service remains central to our offering and we
continue to make excellent progress in this area. Our focus on greater
in-sourcing of customer facing roles, improving box reliability and
encouraging more customer interactions online is delivering a
meaningful improvement in customer satisfaction scores, which increased
by seven percentage points on the prior year to their highest-ever
levels. At the same time, we saw our sixth successive quarter of
improvement in the Ofcom customer survey and we continue to lead the
market in the service provision of both pay TV and broadband.

We are making sustained investment in people and systems so that we can
deliver better service for our customers and this has seen us continue
with the transition of our service estate in-house. We have integrated
our third-party customer service centres in Cardiff and Glasgow more
closely within the Sky-owned estate, whilst 250 colleagues have been
recruited for our new in-house facility in Dublin opening in November
2012, meaning that more Sky staff will be dealing directly with

Driving efficiency and reliability

Our integration of design, manufacture and repair of set-top boxes
continues to deliver significantly improved reliability for customers
and cost efficiencies for the business. 6.7 million customers now have
our most reliable Sky+HD box, up 1.6 million on the prior year. This
was a strong contributor to a 12% fall in service visits versus the
prior year, and a 45% fall versus the same quarter in 2010. We expect
to make similar improvements for our communications customers as our
new broadband router, developed in-house and launched this month,adds
additional capability to diagnose and fix faults remotely.

In our call centre estate greater use of online services by customers
and further improvements in issue resolution led to a 19% reduction in
calls versus prior year and 30% lower than three years ago. This
greater efficiency across the organisation is not only delivering
greater satisfaction for our customers, it is also reducing costs and
giving us increased capacity to invest more where customers see value.


As Sky has evolved, so has the positive impact that our business has on
the UK economy, the creative industries, and the wider community in
which we operate. We recognise that our future success depends on the
relationships we have with millions of families across the UK and
Ireland and we understand that, increasingly, those families look for
companies that share their values and make a positive contribution to

As an example of this, we opened Sky Skills Studio in September, an
exciting new initiative for young people, based at our west London
headquarters. Our aim is to build confidence and life skills by giving
school children the opportunity to create their own television reports
in our state-of-the-art broadcast facilities. We expect Sky Skills
Studio to reach 12,000 young people between the ages of 8 and 18, from
across the country every year.

Post quarter-end, we beat our target to get one million more people
cycling regularly by 2013. The ambitious five-year target was set in
2008, when Sky first joined up with British Cycling, as a way of
measuring the success of a partnership that has aimed to grow cycling
in Britain at all levels, from the grassroots to the elite.


Our financial performance for the quarter was strong. Good revenue
growth of 4% combined with a 3% reduction in other operating costs,
delivered operating profit of GBP310 million and basic earnings per
share of 13.4p, up 16%, all on an adjusted basis.

Unless otherwise stated, all figures and growth rates included below
exclude adjusting items.


Group revenue increased by 4% to GBP1,715 million (2012: GBP1,657
million), with growth in both retail and wholesale operations more
than offsetting a weak quarter for advertising.

Retail subscription revenue grew by 4% to GBP1,428 million
(2012:GBP1,368 million), reflecting continued product and customer
growth as well as one month's benefit of the September price rise. The
launch of a dedicated Formula 1 channel was the main contributor to
the strength in wholesale revenues, up 11% to GBP92 million (2012:
GBP83 million), whilst advertising revenue was 10% lower year on year
at GBP95 million (2012:GBP105 million), predominantly due to the market
decline this quarter as a result of the Olympics.

Other revenue increased by 4% to GBP80 million (2012: GBP77 million)
due to higher Sky Bet revenues, the sub licence of a football World Cup
qualifying match to ITV and the first time inclusion of revenues from
Parthenon Media Group, now rebranded as Sky Vision. These were artially
offset by a GBP4 million reduction in the sale of set-top boxes to Sky


We once again delivered a strong performance on costs, with a three
percentage point reduction in other operating costs releasing resources
for greater investment on screen whilst still allowing the Group's
operating margin to expand to 18.1%.

Programming costs increased by GBP54 million to GBP589 million
(2012:GBP535 million) in line with guidance given at FY12 results.
Over half of this increase was due to the first-time inclusion of
Formula 1 and the biennial Ryder Cup with a further GBP3 million
associated with additional Olympic feeds on the Sky platform.
Entertainment costs accounted for GBP17 million of the increase as we
continued to invest in new and exclusive UK-commissioned content such
as 'The British', 'Hunderby' and 'Sinbad'. Whilst we expect such
originated high-end content to produce long-term differentiation for
our channels, the majority of cost is amortised against first showing.
Excluding the biennial costs associated with the Ryder Cup, underlying
operating profit growth was 10% year on year.

Our work on network efficiency within our communications business
resulted in excellent operating leverage in direct network costs, up
only 6% to GBP172 million (2012: GBP162 million) despite a 22% increase
in home communications products. We now have over 2.7 million fully
unbundled customers, up 48% year on year, and have put our own
equipment in over two thousand BT exchanges, meaning that our unbundled
network can now serve 84% of UK homes.

Our focus on efficiency within other operating costs led to a GBP21
million absolute reduction to GBP644 million (2012: GBP665 million) and
a 250 basis point reduction as a percentage of sales. Contributing to
this, administration costs were down GBP8 million, subscriber management
costs were down GBP5 million and transmission and technology costs were
down GBP3 million, with savings arising from the aggregation of small
improvements over time rather than initiatives specific to the quarter.
Marketing costs also fell by a net GBP5 million with lower acquisition
volumes offsetting some additional investment in above-the-line spend.


On an adjusted basis, profit before tax was GBP291 million (2012:
GBP274 million) and included the Group's share of joint ventures and
associates' profits of GBP7 million (2012: GBP7 million) and a net
interest charge of GBP26 million (2012: GBP28 million). After tax of
GBP70 million (2012: GBP72 million) at an effective rate of 24%, our
adjusted profit for the period was GBP221 million (2012: GBP202
million), generating adjusted basic earnings per share of 13.4 pence
(2012: 11.6 pence), an increase of 16%.

Cash generated from operations

Cash generated from operations was lower at GBP224 million (2012: GBP292
million). Growth in EBITDA of GBP11 million (GBP29 million excluding the
Ryder Cup and one-off costs of extra Olympic feeds) was offset by a
working capital outflow of GBP185 million due to seasonal outflows on
rights costs, particularly in relation to Premier League, Football
League and an increase in the volume of our own original commissions.
The majority of the Group's working capital movements occur intra-year
and arise as a result of upfront payments for rights at the
commencement of availability windows (sports, movies and U.S.
entertainment) or at the production stage (originated content). This
quarter we incurred upfront payments relating to the new cricket rights
agreed in the period and additional commissions in comedy and drama on
Sky1 and Sky Atlantic.

Exceptional Items

Reported profit after tax of GBP219 million (2012: GBP225 million)
included an exceptional loss of GBP3 million relating to the
re-measurement of derivative financial instruments not qualifying
for hedge accounting(2012: GBP1 million gain), and a benefit of
GBP1 million relating to the tax effect. Please refer to Appendix 2
for a detailed reconciliation of reported and adjusted numbers.


Competition Commission (CC)

The CC published its final report on 2nd August, concluding that Sky's
position in the acquisition and distribution of movies in the first pay
window ("first pay movies") does not adversely affect competition in
the pay TV retail market and that, accordingly, remedies are not
required. Parties had until 2nd October to apply tothe Competition
Appeal Tribunal for a judicial review of the CC's decision. No party
did so.

Competition Appeals Tribunal (CAT)

On 8th August, the CAT handed down the confidential version of its
judgment in the appeals against Ofcom's Pay TV statement, which was
disclosed only to members of a confidentiality ring. At the same time,
the CAT published a non-confidential summary of the judgment, which
provided an overview of the CAT's main conclusions and the outcome of
the appeals themselves. The non-confidential version of the full
judgment was published on 26th October. Sky's appeal has been
successful. The CAT has found that Ofcom's core competition concern is
unfounded, that Sky did not obstruct fair and effective competition in
the retailing of Sky's premium sports channels and that Ofcom
misinterpreted the evidence of Sky's negotiations with other retailers
for supply of its channels. The parties have until 26th November to
apply for permission to appeal against the decision. Appeals are
allowed on a point of law only.

Fit and proper

On 20th September Ofcom published its decision finding Sky to be a fit
and proper holder of its broadcasting licences.As a company, Sky
remains committed to high standards of governance and continues to take
its regulatory obligations extremely seriously.

Schedule 1 - KPI Summary

All figures
unless stated      FY10/11                FY11/12                FY12/13
            Q1     Q2     Q3     Q4     Q1     Q2     Q3     Q4     Q1

Total     9,979  10,150 10,223 10,294 10,371 10,471 10,549 10,606 10,654

Total     22,586 23,790 24,591 25,375 26,058 26,830 27,734 28,365 28,898

Television9,956  10,096 10,147 10,187 10,213 10,253 10,268 10,288 10,308

Sky+HD    3,154  3,497  3,686  3,822  3,925  4,063  4,222  4,343  4,468

Multiroom 2,158  2,219  2,237  2,250  2,295  2,350  2,378  2,402  2,423

Broadband 2,802  3,006  3,161  3,335  3,485  3,651  3,863  4,001  4,103

Telephony 2,570  2,757  2,916  3,101  3,248  3,407  3,627  3,768  3,888

Line      1,946  2,215  2,444  2,680  2,892  3,106  3,376  3,563  3,708


Triple-play 23%    24%    26%    27%    28%    29%    31%    32%    33%
ARPU (GBP)  510    536    537    538    535    544    546    548    550

Churn       11.2%  9.5%   10.4%  10.4%  11.1%  9.6%   10.1%  9.9%  10.9%

Fixed Network Metrics

On-net base 2,450 2,659  2,856  3,045  3,205  3,403  3,636  3,778  3,882

 MPF base   1,064  1,247  1,435  1,686  1,869  2,146 2,423  2,588  2,762

 SMPF base  1,386  1,412  1,421  1,359  1,336  1,257 1,213  1,190  1,120

 MPF %      43%    47%    50%    55%    58%    63%    67%    69%    71%

 SMPF %     57%    53%    50%    45%    42%    37%    33%    31%    29%

Off-net     352    347    305    290    280    248    227    223    221

Total      2,802  3,006  3,161  3,335  3,485  3,651  3,863  4,001  4,103

On-net %   87%    88%    90%    91%    92%    93%    94%    94%    95%

Total no.
of LLU    1,293  1,434  1,549  1,577  1,732  1,907  1,964  1,965  2,036



Francesca Pierce  Tel: 020 7032 3337

Edward Steel      Tel:  020 7032 2093

Lang Messer       Tel: 020 7032 2657

E-mail:  investor-relations@bskyb.com 


Alice Macandrew  Tel: 020 7705 3000

Stephen Gaynor   Tel: 020 7705 3000

E-mail:  corporate.communications@bskyb.com 

There will be a conference call for analysts and investors at 08.30
a.m. (GMT) today. Participants must register by contacting Camilla
Regan on +44 20 7251 3801or at  Camilla.regan@RLMFinsbury.com . In
addition, the live webcast will be available via  http://www.sky.com/ 
investorsand subsequently be available for replay.

There will be a separate conference call for US analysts and investors
at 11.00 a.m. (EDT) today. Details of this call have been sent to US
institutions and can be obtained from Dana Diver at Taylor Rafferty on
+1 212 889 4350. A live conference call will be available on Sky's
corporate website,  http://www.sky.com/corporate . A replay will
subsequently be available.

Use of measures not defined under IFRS

This press release contains certain information on the Group's
financial position, results and cash flows that have been derived from
measures calculated in accordance with IFRS. This information should
not be read in isolation from the related IFRS measures.

Forward looking statements

This document contains certain forward looking statements 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, such as forecasts, expectations and
projections in relation to new products and services, the potential for
growth of free-to-air and pay television, fixed line telephony,
broadband and bandwidth requirements, advertising growth, DTH and OTT
customer growth, Multiroom, On Demand (previously Anytime+), NOW TV,
Sky Go, Sky+HD and other services penetration, revenue, administration
costs and other costs, advertising growth, churn, profit, cash flow,
product penetration, our broadband network footprint, content,
wholesale, marketing and capital expenditure and proposals for
returning capital to shareholders.

Although the Company believes that the expectations reflected in such
forward looking statements are reasonable, these statements are not
guarantees of future performance and are subject to risks,
uncertainties and other factors, some of which are beyond our 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. Information on the significant risks and
uncertainties are described in the "Principal risks and uncertainties"
section of Sky's Annual Report for the full year ended 30 June 2012.
Copies of the Annual Report are available from the British Sky
Broadcasting Group plc 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

Glossary of Terms

A glossary of terms is included within the Annual Report and on our
corporate investor relations web page at  http://corporate.sky.com/ 
investors/glossary .

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