Middlesex, UK--(Marketwire - October 23, 2009) -

         Results for the three months ended 30 September 2009

                        STRONG START TO THE YEAR

Progress against our priorities

  . Acceleration of customer growth with net additions of 94,000 to
    reach 9.536 million households

  . Strong demand for Sky+HD with 287,000 net additions, a threefold
    increase on the prior year, to reach a total of 1.6 million

  . Increased percentage of customers taking TV, broadband and
    telephony to 17%; up from 12% in the prior year

  . Good progress in the roll-out of our new voice network; over 70% of
    exchanges now upgraded and enabled for full unbundling

  . Wider access to Sky channels with agreement to launch Sky Player on
    Fetch TV in early 2010 and on Xbox consoles later this year

Strong Financial Performance 

  . Double-digit revenue and earnings growth

  . Group revenue up 10% to GBP1,380 million, with 15% growth in retail
    subscription revenue reflecting growth in customers and product

  . Adjusted operating profit up by 9% to GBP198 million including the
    upfront cost of strong demand for Sky+HD; reported operating profit
    up by 11% to GBP198 million

  . Continued progress in broadband and telephony

  . Adjusted basic EPS growth of 15% to 7.0 pence; basic EPS of 7.4

Note: See page 2 for financial highlights and reconciliation of
non-GAAP measures 

Results highlights

Customer Metrics (unaudited)

                                     Quarterly Net        Closing
                                       Additions           Base
'000s                            30-Sep-09   30-Sep-08   30-Sep-09

Net Customer Additions                  94          87       9,536

Additional products
  Sky+                                 411         421       5,902
  Multiroom                             62          51       1,897
  Sky+HD                               287          93       1,600
  Broadband                            100         164       2,303
  Telephony                            132         120       1,982
  Line-rental                          209          78       1,126
Other KPIs
  Gross additions for the
   quarter (000)                       362         334
  Churn for the quarter
   (annualised %)                    11.3%       10.9%
  ARPU(4) (GBP)                     GBP469      GBP430

Business Performance (unaudited) 

GBP millions                   3 months to   3 months to           %
                                    Sep-09        Sep-08    movement 

Revenue                              1,380         1,249         10%
Adjusted operating profit(1)           198           182          9%
% Adjusted Operating Profit          14.3%         14.6%
Adjusted EBITDA(1)                     279           249         12%
Adjusted basic earnings per           7.0p          6.1p         15%
Net debt(3)                          1,857         1,906         -3%

Statutory Results (unaudited)

GBP millions                   3 months to   3 months to           %
                                    Sep-09        Sep-08    movement 

Revenue                              1,380         1,249         10%
Operating profit                       198           179         11%
Cash generated from                    113           153        -26%
Basic earnings per share              7.4p          4.2p         76%

(1) Adjusted earnings before joint ventures, interest, taxation,
depreciation and amortisation (EBITDA) and adjusted operating profit
for the three months ended 30 September 2008 exclude EDS legal costs of
GBP3 million. There are no adjusting items for the three months ended 30
September 2009.

(2) Adjusted basic earnings per share (EPS) for the three months ended 30
September 2009 is based on adjusted profit for the period which
excludes a GBP9 million gain relating to remeasurement of all derivative
financial instruments (not qualifying for hedge accounting) (September
2008: GBP1 million loss) and related tax effects. Adjusted basic EPS for
the three months ended 30 September 2008 is based on adjusted profit
for the period which excludes adjusting items as detailed in note (1),
a GBP24 million impairment relating to the Group's investment in ITV, a
charge of GBP6 million relating to a deferred tax write-off, and related
tax effects.

(3) Net debt is defined as borrowings (GBP2,343 million), net of cash and
cash-equivalents (GBP282 million), and borrowings-related financial
instruments (GBP204 million).

(4) Average revenue per user (ARPU) is defined as the amount spent by the
Group's residential subscribers in the quarter, divided by the average
number of residential subscribers in the quarter, annualised.

Jeremy Darroch, Chief Executive, said:

"Our business has made a good start to our 2010 financial year with another 
quarter of strong results. In what continues to be a tough economic 
environment, we have increased the number of customers joining Sky. High 
definition has continued to perform very well and more customers are saving 
money by choosing Sky for each of TV, broadband and telephony.

"The strong operational performance is reflected in today's financial
results. We absorbed the short-term costs of customer demand and
delivered double-digit revenue growth, 9% growth in operating profit,
and 15% growth in EPS.

"As the year continues, we'll maintain a clear focus on our customers and on 
delivering on our priorities, all with the aim of building a larger, more 
profitable, and better business."


In the three months to 30 September 2009 ("the quarter"), we continued
to see strong demand for our products as customers responded to the
choice, quality and value we offer in home entertainment and

Net additions for the quarter were 94,000, up 8% year on year, taking
the base to 9.536 million customers. Gross additions of 362,000 were 8%
higher year on year with strong demand for HD and a continued response
to great value broadband and talk. Churn was also higher at 11.3%
reflecting a number of important operational decisions implemented in
the quarter, against a challenging economic backdrop. We increased
pricing on the DTH subscription; we restricted payment options
available to customers in arrears wanting to rejoin Sky; and we
swapped-out seven million viewing cards across the base as part of a
routine replacement to maintain high standards of platform security.

We continued to make good progress on our objective of increasing
product penetration. We sold over a million subscription products in
the quarter, an increase of more than 70% year on year. Within this was
a particularly strong performance in Sky+HD, telephony and line rental.
In addition, the removal of our standalone 'free' broadband product in
March 2009 also benefited the year on year performance. As a result
ARPU increased by GBP39 year on year to reach GBP469.

Strong Demand for Sky+HD

We continue to see strong demand for our high quality and great value
Sky+HD service, with the customer base more than doubling over the last
12 months. During the quarter we added a further 287,000 Sky+HD
customers -- a threefold increase on the prior year -- to reach 
1.6 million households.

Underpinning this performance is our innovative Sky+ technology, the
enhanced picture and sound quality of HD, and our outstanding range of
content from great brands. Sky+HD customers can choose from 34 channels
from high quality brands spanning sports, movies, arts, drama, kids and
documentaries. And now with the addition of ESPN HD, all Premier League
games are available to customers in high definition.

Sky+HD was the principal driver behind growth in Sky+, which reached
5.902 million households this quarter and surpassed 60% penetration of
the base.

Broadband and Telephony Opportunity

Customers continue to respond to our great value offering in broadband
and telephony and we continue to build scale, reaching 2.303 million
broadband and 1.982 million telephony customers. In addition, we
continue to see strong demand for our line rental product, adding
209,000 customers in the quarter and surpassing one million customers.
Overall, 17% of our customers now choose Sky for all three of TV,
broadband, and telephony, helping us to deepen the relationship in the
home and establish Sky as the entertainment and communications provider
of choice. While this represents good progress, there is still
considerable headroom for growth.

We are making good progress on improving the returns on our investment
in broadband and telephony. Higher penetration of telephony products,
combined with a continued focus on cost efficiency, saw operating
losses for the quarter almost halve year on year -- to GBP19 million.
This was despite the costs associated with migrating existing customers 
from partial to full unbundling. At 30 September we had enabled over 
70% of our exchanges and had more than 150,000 fully unbundled 

Increased Breadth and Depth of Content

Following an exceptionally strong summer of sport with The Ashes and
the British & Irish Lions tour of South Africa, we made a strong start
to the new Premier League season, with record audiences in the opening
weekend. In addition, there is now more high quality content available
to Sky Sports customers than ever before, with more Champions League
games and the addition of the Scottish Premier League, all available in
high definition. 

Sky Movies viewing audiences were higher year on year, with the launch
of the 'Comic Book Heroes' season, featuring premieres of 'The Dark
Knight' and 'Hancock'. In entertainment, we have acquired the award
winning US drama 'In Treatment' and have commissioned our third
adaptation of a Terry Pratchett novel 'Going Postal' and a new show 
'Got To Dance' with Davina McCall.

As part of our commitment to making Sky content available across a
broad range of platforms, we announced an agreement with IP Vision in
October to make our online TV service, Sky Player, available via IP
Vision's hybrid DTT/IPTV device, Fetch TV. From early 2010, the service
will provide access to some of Sky's most popular channels, including
Sky Sports, Sky Movies and a range of other pay TV channels. In
addition, Sky Player will soon become the UK's first linear pay TV
service available via a games console, with millions of Xbox customers
able to access it later this year. Sky Player will also be preloaded as
part of Microsoft's Windows Media Centre software. 

Our online music service, Sky Songs, also launched this month giving
users access to an outstanding catalogue of over four million tracks,
from every major music label and a comprehensive range of independents.
For a monthly subscription, users can access advertising-free and
unlimited streaming, as well as a defined number of download-to-own

The Bigger Picture

As part of our commitment to developing Sky's long term sustainability,
we delivered a number of major initiatives in the quarter through our
Bigger Picture programme, which focuses on three areas - helping to
produce a healthy environment, promoting participation in sport, and
opening the arts to more people. During the quarter, more than 100,000
people in four major cities took to traffic-free roads on their bikes
at Skyride events as we started to work towards our goal of getting one
million more people cycling by 2013. Sky Arts brought Antony Gormley's
ground-breaking 'One and Other' from Trafalgar Square's Fourth Plinth
to millions on screen and online, with a 24 hour live webcast and on
air weekly shows during the 100 days of the project. To raise awareness
of and support efforts to stop tropical deforestation, we supported The
Prince's Rainforest Project's 'Rainforest SOS' campaign on screen. On
21st October we launched a major new consumer campaign in conjunction
with WWF, Sky Rainforest Rescue, with the aim of helping to save one
billion trees in the Amazon rainforest. The three year project will
call on the British and Irish public to donate money, which Sky will
match pound for pound up to the joint target of GBP4 million. We will
drive awareness of the campaign and of the wider issue of deforestation
through our programming and other communication channels. The project
forms part of a new set of commitments from Sky to help tackle climate
change, including new targets to further reduce our carbon footprint.


Our financial performance for the three months was strong, with good
growth in revenue, operating profit and EPS. 

Total revenue growth of 10% was the product of a particularly good
performance in our retail subscription business, up 15%, offset by
lower growth in other categories. 

Adjusted operating profit was up by 9% higher year on year, as higher
revenues and continued focus on costs helped to mitigate the upfront
costs of successfully adding new customers and significantly increasing
subscription product penetration - each of which enhance the future
earnings capacity of the business.

We maintain a tight focus on costs, with administration costs for the
quarter held flat for the second year in a row. In addition, quarterly
broadband and telephony losses almost halved year on year to GBP19
million on a revenue base of GBP135 million, benefiting from customer
growth, increased penetration of Sky Talk, higher line rental pricing
and a continued focus on operational efficiency. Easynet losses also
reduced to GBP7 million.


In order to provide a presentation more reflective of the size of the
relative revenue streams, Sky Bet revenue (GBP11m) is now included 
within the other revenue category and Easynet revenue (GBP50 million) 
is shown separately. A reconciliation of this adjustment is provided in 
Appendix 2. 

Group revenue increased to GBP1,380 million (2009: GBP1,249 million), up
10% year on year.

Retail subscription revenue increased by 15% to GBP1,115 million (2009:
GBP971 million), reflecting continued customer growth and strong take up
of subscription products; in particular Sky+HD and our line rental

Wholesale subscription revenue increased by GBP12 million to GBP55 
million (2009: GBP43 million), reflecting the return of Sky's basic 
channels to Virgin Media's platform in November 2008. In advertising, 
we continue to outperform the overall sector, with revenue falling by 
4% to GBP65 million (2009: GBP68 million), compared to an estimated 
overall decline of 13% in the TV advertising sector.

Installation, hardware and service revenue was GBP46 million (2009: 
GBP61 million), with growth in Sky+HD volumes from both new and existing
customers offset by lower prices paid by customers for boxes.

Easynet revenue increased by 6% to GBP50 million (2009: GBP47 million),
with continued growth in corporate customers in the global networks

Other revenue of GBP49 million (2009: GBP59 million) decreased due to
lower third-party set top box sales by Amstrad and the loss of 
conditional access fees from Setanta. 

Costs and Operating Profit

Programming costs increased by GBP33 million to GBP439 million (2009: GB
P406 million) primarily due to securing new or additional rights to show
Champions League and Scottish Premier League football, the Rugby Super
League and higher costs for the Football League. The increase also
reflects payments to ESPN under the agreement whereby Sky retails
ESPN's new channels to its customers.

Direct network costs (classified as Transmission costs for statutory
purposes) increased to GBP118 million (2009: GBP79 million), reflecting
significantly higher volumes of broadband and telephony customers,
costs associated with the additional 896,000 line rental customers year
on year, and the connection of those households that do not already
have an active phone line. Also included were the costs of migrating
existing customers to our fully unbundled network.

Marketing costs increased by GBP37 million to GBP245 million, reflecting
both the higher volume of Sky+HD sales achieved in the quarter (194,000
higher year on year) and the higher subsidy following our move to a 
GBP49 retail price for a Sky+HD box in January 2009. 

Net investment in the growth of Sky+HD in the quarter was around GBP50
million higher year on year, with a threefold increase in sales and the
increased box subsidy following the move to a retail price of GBP49 in
January 2009. The average subscriber acquisition cost for Sky+HD across
new customer sales and existing customer upgrades has been in line with
our expectations.

Subscriber management and supply chain costs increased by GBP7 million 
to GBP162 million in the context of significantly higher activity in the
business overall. This included the direct costs of a routine
replacement of seven million viewing cards and a higher volume of calls
handled in relation to the roll-out of both our line-rental product and
the launch of ESPN and ESPN HD to Sky customers. In addition, and as
previously announced, the current year includes fixed costs relating to
the creation of almost 1,000 new customer facing roles since January
2009, to support the anticipated acceleration in demand for Sky+HD. 

Each of Administration costs and Transmission, technology and fixed
network costs (excluding direct network costs as detailed above) were
held flat year on year as we continue to hold the rate of growth in
central costs below the rate of sales growth.


Profit before tax in the period of GBP180 million (2009: GBP129 million)
included the Group's share of joint ventures' profits of GBP6 million
(2009: GBP4 million) and a net interest charge of GBP24 million (2009: 
GBP30 million). The prior year also included an impairment charge of 
GBP24 million in relation to our investment in ITV.

Taxation for the period was GBP52 million (2009: GBP56 million) and, on 
an adjusted basis, resulted in an effective rate of 29%.

Adjusted profit for the period was GBP121 million (2009: GBP106 million), 
generating an adjusted basic earnings per share of 7.0 pence (2009: 
6.1 pence). Including all exceptional items, profit for the period was 
GBP128 million (2009: GBP73 million), generating basic earnings per 
share of 7.4 pence (2009: 4.2 pence).

The issued share capital at the start and end of the period was 1,753
million shares of 50 pence. Over the entire period the weighted average
number of shares excluding those held by the Employee Share Ownership
Plan for the settlement of employee share awards was 1,741 million.

Cash Flow and Financial Position

Cash generated from operations of GBP113 million (2009: GBP153 million)
included a working capital outflow of GBP174 million (2009: outflow 
GBP103 million), impacted by seasonal outflows and one-off factors, 
including an earlier payment to the Football League than in the prior 
year. We expect this outflow to substantially reverse in the second 
quarter. After interest, cash taxes, and capital expenditure net cash 
outflow was GBP137 million (2009: outflow of GBP57 million). Net debt 
as at 30 September 2009 was GBP1,857 million (2009: GBP1,906 million).

Exceptional Items

Net interest included a GBP9 million gain relating to the remeasurement
of derivative financial instruments not qualifying for hedge accounting
(2009: GBP1 million loss).

Results in the prior year included an exceptional charge of GBP3 million
within administration costs, relating to the legal expenses of the
Group's claim against EDS, who provided services relating to past
investment in customer relationship management systems software and
infrastructure; an adjustment of GBP6 million relating to a deferred tax
write-off following a change in law in the period in respect of
industrial building allowances; an impairment loss of GBP24 million
relating to the Group's investment in ITV, and related tax effects.


Francesca Pierce Tel: 020 7705 3337
Lang Messer      Tel: 020 7800 2657

E-mail: investor-relations@bskyb.com


Robert Fraser    Tel: 020 7705 3036
Bella Vuillermoz Tel: 020 7800 2651

E-mail: corporate.communications@bskyb.com

A conference call for UK and European analysts and investors will be
held at 08.30 a.m. (BST) today. To register for this, please
contact Yasmin Charabati or Emily Dimmock at Finsbury on +44 20 7251
3801 or at bskyb@finsbury.com. A live webcast of this call and
supporting materials will be available on Sky's corporate website, 
http://www.sky.com/corporate. A replay will be subsequently available.

There will be a separate conference call for US analysts and investors
at 10.00 a.m. (EST) 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 webcast of this call and supporting materials
will be available on Sky's corporate website, http://www.sky.com/
corporate. A replay will be subsequently available.

Click on, or paste the following link into your web browser, to view
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