MIDDLESEX, UNITED KINGDOM--(Marketwire - Jan 31, 2012) -

 BRITISH SKY BROADCASTING GROUP PLC Unaudited results for the six months ended 31 December 2011 CONTINUED GROWTH DELIVERING STRONG FINANCIAL RESULTS Adjusted results Reported results Six months to 2011 2010 Variance 2011 2010 Variance 31 December Revenue GBP3,364m GBP3,186m +6% GBP3,364m GBP3,186m +6% EBITDA (2) GBP772m GBP677m +14% GBP803m GBP648m +24% Operating profit(2) GBP601m GBP520m +16% GBP632m GBP491m +29% Earnings per share (basic)(3) 24.0p 20.0p +20% 25.3p 20.3p +25% Dividend per share 9.20p 8.74p +5% 9.20p 8.74p +5% Excellent financial performance; strong growth across the board * Revenue up 6% to GBP3.4 billion * Highest ever first-half adjusted operating profit, up 16% to GBP601 million * Efficiency programmes delivering lower operating costs; adjusted operating margin up 160 basis points to 17.9% * Adjusted basic EPS up 20% to 24.0 pence * Adjusted free cash flow up 12% to GBP495 million * Interim dividend up 5% to 9.20 pence, in addition to the GBP750 million buy-back initiated on 29 November 2011 Continued growth in products and customers in the quarter * Total net product growth of 772,000 to 26.8 million, up 13% * Added 100,000 new households to reach 10.471 million customers * Good response to price freeze; strong customer loyalty in a tough economic environment with churn of 9.6% * Continued improvement in product mix with more than three million customers taking all three of TV, broadband and telephony, up by 26% year on year * Customers responding to leading innovation with 2.5 million users of Sky Go to date Strong set of plans for 2012 * Bringing more high quality content for Sky customers, including home grown comedy and drama and a new channel dedicated to Formula 1 * New agreements to add BBC iPlayer and ITV Player to Anytime+ * Free access to 10,000 WiFi hotspots to Sky Broadband Unlimited customers * Fibre broadband available to c30% of UK households from April, offering up to 40Mb broadband speeds and truly unlimited usage for GBP20 a month * Launching a new internet based pay TV service aimed at new customers * Creating 1,300 Sky jobs across the UK and Ireland over the next two years Results highlights Customer Metrics (unaudited) Quarterly As at As at Annual Growth to 31-Dec-11 31-Dec-10 Growth 31-Dec-11 Total products ('000s) 26,830 23,790 +3,040 +772 TV 10,253 10,096 +157 +40 HD 4,063 3,497 +566 +138 Multiroom 2,350 2,219 +131 +55 Broadband 3,651 3,006 +645 +166 Telephony 3,407 2,757 +650 +159 Line rental 3,106 2,215 +891 +214 Total customers ('000s) 10,471 10,150 +321 +100 Products per customer 2.6 2.3 +0.3 Other metrics Customers taking each of TV, broadband & talk 29% 24% +5% ARPU(1) GBP544 GBP536 +GBP8 Churn (quarterly annualised) 9.6% 9.5% An additional KPI summary table containing further detailed disclosure may be found in Schedule 1. Business Performance(2)(unaudited) GBP'millions 6 months 6 months to 31 Dec-11 to 31 Dec-10 Movement Revenue 3,364 3,186 +6% Adjusted operating profit 601 520 +16% % Adjusted operating profit margin 17.9% 16.3% +160 bps Adjusted EBITDA 772 677 +14% Adjusted free cash flow 495 443 +12% Adjusted basic earnings per share(3) 24.0p 20.0p +20% 1 Quarterly annualised. Calculations have been restated to include customers taking standalone home communications products and to reflect the impact of the Sky magazine closure. 2 A reconciliation of adjusted operating profit and adjusted EBITDA from continuing operations to reported measures as well as cash generated from continuing operations to adjusted free cash flow from continuing operations is set out in Appendix 3. 3 Adjusted basic EPS is calculated from adjusted profit from continuing operations for the period. A reconciliation of reported profit from continuing operations to adjusted profit from continuing operations is set out in note 5 to the condensed consolidated interim financial statements. Jeremy Darroch, Chief Executive, commented:"It has been a strong first half with progress on all fronts. While these are tough times for many consumers, our customers are staying loyal and more households continue to join us. From broadband to high definition, people are choosing Sky for a wider range of products than ever, underlining the transformation of our business over the last few years."Our approach to growth is working well. We're adding more value to the Sky subscription by investing where it matters most to customers, with more great entertainment and ground-breaking innovation like Sky Go. Alongside that, we're improving efficiency behind the scenes so we can expand margins at the same time. Financially, we've delivered another strong result, with our highest ever first-half operating profit and 20% growth in earnings per share. On the back of this, we're increasing the dividend again and have started our share buyback programme to increase returns for our shareholders."We expect the environment to remain tough in calendar 2012. No consumer business can be immune to these conditions and we will manage any short-term headwinds as they emerge. Staying focused on the long-term opportunity, we've got a strong set of plans to keep delivering for customers and shareholders. This will be an outstanding year on screen, including more original British productions and a new channel dedicated to Formula 1, and we have exciting products in the pipeline that will create more ways to access our content and more reasons to join and stay with us." OVERVIEW We have delivered a strong first half performance with good growth in customers and products and record financial results. We've continued to invest on screen and in bringing leading innovation to customers and, at the same time, maintained our focus on cost efficiency to deliver an overall reduction in other operating costs. This has translated into double-digit growth in operating profit, free cash flow and earnings per share and our highest operating margin for five years. While household budgets remain under pressure, customers are choosing Sky over other providers and are spending more with us. Net product additions of 772,000 in the three months to 31 December 2011 ("the quarter") took the total base to 26.8 million, up by 13% year on year. Within that, we added 100,000 net new households and our focus on loyalty delivered a good performance in churn which, at 9.6%, was broadly level on the prior year. We saw growth in every product category, with a particularly strong performance in home communications. As a result, customers are now taking an average of 2.6 products, up 13% on last year, and ARPU continues to rise, reaching a new high of GBP544. Our operating performance is converting into strong and sustained financial results. We achieved revenue growth of 6%, at a time when we froze subscription prices for customers and absorbed headwinds in Sky business and advertising. We delivered our highest ever first half adjusted operating profit of GBP601 million, and further progress on costs delivered an increased adjusted profit margin which reached 17.9%. All of this was achieved alongside continued investment in the customer experience, with good financial discipline contributing to adjusted basic EPS growth of 20% and adjusted free cash flow growth of 12%. The Directors have declared an interim dividend of 9.2 pence per share, representing an increase of 5% year on year, making this the eighth consecutive year of increased dividends for shareholders. As has been the case previously, we expect the final dividend payment to form the greater proportion of the total. As we said in our 2011 Preliminary final results, our intention for the current and subsequent financial years is to maintain a policy of paying out around 50% of full year adjusted earnings as dividends. In addition, we have commenced our previously announced share buyback programme of GBP750 million, further increasing returns to shareholders. OUTLOOK We do not expect any material improvement in the macro backdrop in calendar 2012, with strong consumer headwinds anticipated in the early part of the year. While remaining cautious in respect of the economic outlook, we continue to expect that the strength and flexibility of our business will deliver further progress. Our growth will stay broadly-based, increasing product penetration and adding new households where it makes sense. We will also continue to invest in core areas for customers and we have a strong set of plans for the year ahead, including more great content, a strong product pipeline and the launch of an entirely new internet based pay TV service aimed at new customers. Alongside that, we will maintain our focus on operating efficiency because this underpins our ability to keep investing for customers. We believe this is the right approach to build a more valuable business and increase returns to shareholders over time. OPERATIONAL REVIEW Operational Performance Our customer focus has once again delivered strong operating results in the quarter. In a difficult consumer environment, customers are increasingly recognising our great value by choosing Sky over other providers and taking more from us. We have maintained a consistent approach to growth in the quarter by growing broadly across our product range, focusing on adding high quality customers and building a loyal customer base. We added 772,000 total net products in the quarter, growing the base by 13% year on year to reach a total of 26.8 million products. In an environment where customers are more cautious about making long-term financial commitments, we added 100,000 net new households in the quarter. While TV growth was lower year on year at 40,000, we compensated for this well with 60,000 new standalone home communications customers. Our total customer base reached almost 10.5 million, of which 218,000 are standalone home communications customers. The second quarter performance completed a strong first half in which we added almost 1.5 million net products and saw continued growth in total customers, adding 177,000 net new households. We have again delivered good growth in all product categories and customers are now taking an average of 2.6 products each, 13% higher year on year. Total HD customers reached four million, with 138,000 net additions in the quarter and another strong performance in home communications means we now have over three million customers who take each of TV, broadband and telephony, up 26% year on year. As customers choose to take more from us, ARPU has grown to a new high of GBP544 and our customer focus has resulted in continued strong loyalty, with churn at 9.6%. We continued to see strong take-up of home communications products as customers responded to our high quality, great value proposition. We added 166,000 broadband, 159,000 telephony and 214,000 line rental customers. At the same time we are improving the economics of our home communications business, migrating a further 277,000 customers to our fully unbundled network to reach 59% penetration of the broadband base. Looking ahead, we plan to add to our broadband service in three ways; first, we'll extend our network footprint from 82% today to 88% of the UK by the end of 2013, making our great value broadband available to a further 1.4 million homes; second, we will launch our free WiFi service to Sky Broadband Unlimited customers in April, giving seamless access to our content on the move in 10,000 locations across the UK; third, from April we will extend our broadband line-up by adding a new fibre product for customers who want higher speeds. For GBP20 per month, customers will be able to access download speeds of up to 40Mb, with no usage caps and can pre-register their interest from today. Using BT's infrastructure, our fibre product will initially be available to just under 30% of UK households, with coverage set to grow over time. With this new addition to our product portfolio, we will provide customers with even more choice in home communications and, at the same time, make an attractive on-going return for our business. As part of our on-going commitment to customers, we are also announcing today the creation of 1,300 Sky jobs across the UK and Ireland over the next two years, including the opening of a new service centre in Dublin. This forms part of an on-going programme to bring more of our customer service and installation workforce in house and ensure our own people deal with the most complex customer issues. Content We have had a strong quarter on screen, where we have continued to build on our traditional strengths in sports and movies, as well as delivering a step change in our entertainment channels. In the second quarter, our increased investment in British comedy and drama has delivered success, with our key commissions performing strongly both in terms of customer response and critical acclaim. Viewing of our entertainment channels was up by 21% year on year in Sky homes, continuing our strong start to the fiscal year. The second season of 'An Idiot Abroad' delivered one of Sky 1's biggest ever audiences and we secured our first ever British Comedy Awards for 'Spy' and 'Victoria Wood's Angina Monologues'. The coming year will see us bring customers more great drama and we have made a strong start with our new adaptation of 'Treasure Island' delivering Sky 1's highest drama audience for four years. We will also continue to offer the best of US content with 'Mad Men', 'Luck' starring Dustin Hoffman and the second series of 'Game of Thrones'. The quarter concluded a very successful calendar year in sport in which we broadcast more live events for Sky viewers than ever before. Our mobile sports content is proving increasingly popular with customers and with live mobile streaming via apps for smart phones and tablets, customers can access live action or updates in more ways than ever before. In combination with good growth in movie customers, we closed the half with our highest ever level of subscribers to our premium channels across all platforms. Looking ahead, we have a strong line-up for customers. In addition to our coverage of The Masters, the Ryder Cup and England cricket tours and home series, we have also agreed a new four year deal to broadcast live international and county cricket, continuing our successful partnership with the ECB. In March we will launch our dedicated Formula 1 (F1) channel, Sky Sports F1 HD, giving in-depth access to all 20 Grand Prix at no extra charge for Sky TV customers who subscribe to Sky Sports 1 and 2 or our HD pack. New Products and Services We continue to innovate to add value for customers. Building on the early success of Sky Go and Sky Anytime+, in 2012 we have major initiatives in the areas of portability, on demand content and companion devices. Just five months after its launch, 2.5 million customers have used our Sky Go service to access a range of movies, sports and entertainment channels through PCs, laptops, X-boxes, smartphones and tablets. In November, we expanded the range of content available on the Sky Go mobile application with the launch of a constantly updating library of 600 on demand movie titles from all the major studios. As a result, Sky Go reached a new high of 1.5 million monthly unique users in December. Looking ahead, we will launch Sky Go on the Android platform in February, representing a base of five million devices in the UK. We also plan to expand the channel line-up on our Sky Go mobile service, starting with the addition of Sky Atlantic, closely followed by Sky 1, Sky Living and Sky Sports F1. Sky Anytime+, our full on demand service, now has 1.2 million enabled customers. This quarter we have continued to add more content to the service, increasing the number of hours available as well as doubling the amount of HD content. As a result, usage is growing strongly, with weekly downloads increasing by 80% across the second quarter and a high proportion of viewing to movies. We also plan to increase distribution to all customers with a Sky+HD box, irrespective of their Internet Service Provider. As a result, we estimate the potential reach will grow to more than five million households. Looking ahead to 2012, we'll add even more great content for customers. Today we are announcing an expansion to the range of high-quality content available on Sky Anytime+ following agreements with the BBC and ITV to add the BBC iPlayer and ITV Player to the service. From today, customers will be able to access archive content from ITV, including popular shows such as Prime Suspect, Lewis and Cold Feet. Seven day catch-up will join the service later this year with the addition of the BBC iPlayer and more ITV content. Archive BBC content - including the likes of Doctor Who, Outnumbered and Top Gear - is already available on Sky Anytime+ through Sky's existing deal with UK TV. We are bringing together broadcast TV and the internet through a strategic partnership with zeebox, an innovative second screen consumer service provider. Launching in the first half of 2012, Sky and zeebox will offer a ground breaking companion app experience for Sky customers which provides unique augmented TV viewing features, such as connecting with friends around TV shows, finding more information about what's on TV, and buying products relating to their favourite programmes. From later this year, Sky customers will also be able to use a zeebox powered Sky app to access their Sky+ box on the move, so they can manage their Sky+ recording remotely, as well as using their iPhone or iPad as a remote control for their Sky box, creating a comprehensive and fully integrated companion TV experience. Launch of new internet pay TV service in 2012 The rapid growth of broadband-connected devices is opening up new opportunities to retail our content directly to additional consumers. Today we are announcing plans to launch a new service aimed at the 13 million UK households who don't currently subscribe to pay TV. Launching in the first half of calendar 2012, the service will be a new way to watch our content via broadband connected devices - on a PC, laptop, tablet, smartphone, games console or connected TV. It will offer instant access to Sky Movies on demand, with no dish and no contract, and customers will be able to pay monthly or rent a movie on a simple pay-as-you-go basis. The service will start by offering movies, but will soon expand to offer sport and entertainment as well. Alongside the continued growth of our satellite platform and existing wholesale arrangements, this will be a new way for us to reach out to consumers who love great content, but may not want the full Sky service. With no need for significant infrastructure investment, the service will open up a new opportunity for customer growth and allow us to monetise our content more widely. The Bigger Picture As part of our commitment to making a positive contribution to life in the UK and Ireland, we delivered a number of initiatives this quarter through our Bigger Picture programme. Through our partnership with British Cycling, which is aimed at improving participation in the sport, our pro cycling team 'Team Sky' finished second overall in the 2011 World Tour Rankings. We also welcomed Mark Cavendish, World Champion and winner of 20 Tour de France stages, to the team for 2012. Our environmental leadership was recognised with Sky being placed amongst the leaders in the Environmental Tracking UK 100 Carbon Ranking Survey, and Sky Studios being awarded both the Efficient New Build Project and Judge's Supreme Award at the 2011 Energy Awards. As part of our wider work with the Arts, our Sky Arts Ignition Series team have been touring the country to update 300 arts organisations and young artists on the Sky Arts Ignition and Futures Fund initiatives. We also announced the first two winners of the Sky Arts Ignition: Futures Fund; a programme providing bursaries for young artists each year. The annual Bigger Picture Review 2011, reporting on our performance as a responsible business, was published online in October at the following address [ http://corporate.sky.com/thebiggerpicturereview2011/ ] FINANCIAL SUMMARY We delivered a record financial performance in the six months to 31 December 2011 ("the period"). Good revenue growth and excellent progress on costs delivered 16% growth in adjusted operating profit and 20% growth in adjusted basic EPS. Efficiency programmes across the business have allowed us to reduce other operating costs year on year, more than offsetting the increased investment in programming to deliver our highest ever first half adjusted operating profit of GBP601 million and a 160 basis point improvement in adjusted operating margin to 17.9%. Unless otherwise stated, all figures and growth rates included within the financial section exclude exceptional items and are from continuing operations. Revenue Group revenue increased by 6% to GBP3,364 million (2011: GBP3,186 million),with broadly based growth in both retail and wholesale operations offsetting headwinds in advertising and Sky business. Retail subscription revenue was up by 5% to GBP2,764 million (2011: GBP2,638 million), benefiting from growth in customers and products and despite our decision to freeze subscription prices. We saw a good performance in wholesale subscription revenue which increased by 13% to GBP170 million (2011: GBP151 million) as we continue to benefit from demand for our channels and their HD versions by subscribers to other platforms. Advertising revenue was 6% lower year on year at GBP222 million (2011: GBP236 million), as a result of headwinds impacting the sector and higher payments to our third party media partners. During the period, we estimate the TV advertising market declined by 1% year on year, with our share falling slightly to 19.4% with free-to-air networks attracting a higher proportion of increased competitor spend during the quarter. Installation, hardware and service revenue was lower year on year at GBP51 million (2011: GBP63 million), reflecting our introduction of a free service for customers moving home and fewer engineer visits as a result of our work to increase the reliability of set-top boxes. Other revenue was 60% higher at GBP157 million (2011: GBP98 million). The increase includes GBP34 million from the sale of set-top boxes to Sky Italia, for which the corresponding cost is recognised in subscriber management and supply chain. Excluding the impact of the set-top box sales, other revenue was up by 26% benefiting from continued strong performance in Sky Bet and the inclusion of GBP11 million from the consolidation of 'The Cloud'. Direct Costs Programming costs increased by 5% to GBP1,109 million (2011: GBP1,058 million). Entertainment costs accounted for GBP37 million of the increase as a result of the anniversary effect of having a full six months of Sky Atlantic programming and further investment in original UK programming such as 'An Idiot Abroad 2', 'Strike Back Project Dawn' and'Mount Pleasant'. Partner channel costs were GBP12 million higher as a result of having five additional third party HD channels and 16% growth in HD customers. Sports and movies costs were broadly level year on year. Direct network costs increased by 25% to GBP336 million (2011: GBP269 million) due to increased scale in the business and the 27% growth in home communications products. Gross margin improved as a result of revenue growth and cost savings achieved as a greater proportion of customers are unbundled onto our own network. Other Operating Costs We have delivered another strong performance in our cost base, where efficiency programmes have contributed to a 2% reduction in other operating costs for the period to GBP1,318 million (2011: GBP1,339 milli on)and 280 basis points of margin improvement year on year. Marketing costs fell by 12% to GBP541 million (2011: GBP613 million) as a result of fewer gross additions and less commission paid to third party retailers as a result of driving more acquisitions through online channels. We also reduced above-the-line advertising costs by GBP10 million year on year and achieved the expected savings from our decision to close the Sky customer magazine. The per customer cost to acquire a TV subscriber ("SAC") increased GBP14 to GBP368 (2011: GBP354) reflecting a lower number of gross additions and the difficult consumer environment. Subscriber management and supply chain costs increased by GBP37 million year on year. The largest contributor to the increase was the cost of sales of set-top boxes to Sky Italia, for which the corresponding revenue is recorded within other revenue and from which we both derive scale benefits and a small positive profit margin. Excluding the impact from these box sales, subscriber management and supply costs increased by 1% year on year. Transmission, technology and fixed network costs were GBP5 million higher at GBP194 million (2011: GBP189 million) as a result of required technical support costs in our new Sky Studios and the increased running costs of an enlarged fixed network. Growth in administration costs (excluding exceptional items) was held below the rate of revenue growth, increasing by 4% to GBP260 million (2011: GBP251 million). The increase reflects the inclusion of overhead costs relating to Sky Studios and the first time inclusion of costs relating to The Cloud. Earnings On an adjusted basis, profit before tax was GBP564 million (2011: GBP477 million) and included the Group's share of joint ventures and associates' profits of GBP17 million (2011: GBP17 million) and a net interest charge of GBP54 million (2011: GBP60 million). Adjusted taxation was GBP146 million (2011: GBP129 million) resulting in an effective rate of 26% for the period. The adjusted tax charge on continuing operations for the year is expected to be around 25%, reflecting the reduction in the rate of UK Corporation Tax. Adjusted profit for the period was GBP418 million (2011: GBP348 million),generating an adjusted basic earnings per share from continuing operations of 24.0 pence (2011: 20.0 pence). Over the 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 and this is used for the purposes of calculating basic earnings per share (rather than the closing number of shares). Cash Flow and Financial Position Adjusted free cash flow increased by 12% to GBP495 million (2011: GBP443 million) reflecting 14% growth in adjusted EBITDA and improved working capital, offset by increases in capital expenditure and taxation. See Appendix 3 for details of adjusting items. Capital expenditure of GBP237 million (2011: GBP221 million), was higher year on year as we accelerated our exchange rollout programme in the period, incurred costs of the technical fit-out of Sky Studios and invested in our new contact centres in Sheffield, Newcastle and Leeds. Strong cash generation during the period has contributed to a reduction in net debt to GBP615 million. For a reconciliation of net debt see Appendix 3. The Group's liquidity and headroom remain comfortable with no bond redemptions falling due until October 2015. During the period, the Group renewed and extended its revolving credit facility of GBP743 million on more favourable terms. The entire amount remains, and is expected to remain, undrawn. Exceptional Items Reported operating profit of GBP632 million included the receipt of a GBP38.5 million break fee from News Corporation offset by GBP8 million of costs directly related to the News Corporation proposal. Reported profit after tax of GBP441 million also included an exceptional gain of GBP7 million relating to the re-measurement of derivative financial instruments not qualifying for hedge accounting (2011: GBP19 million gain), a GBP5 million charge due to writing off the fees relating to the previous revolving credit facility and a GBP10 million charge relating to the tax effect on exceptional items. Distribution to Shareholders The Directors have declared an interim dividend of 9.2 pence per share. This represents an increase of 5% year on year and is the eighth consecutive year of increased dividend for shareholders. As previously stated, our intention is to maintain a policy of paying out 50% of full year adjusted earnings as dividends with the final dividend payments typically forming the higher proportion of the total dividend. The ex-dividend date will be 28 March 2012 and the dividend will be paid on 24 April 2012 to shareholders of record on 30 March 2012. The final dividend for 2010/11 financial year was paid to shareholders during the period, resulting in a total cash dividend payment in respect of the 2010/11 financial year of GBP405 million. At the Company's AGM on 29 November 2011, Sky received approval to return GBP750 million of capital to shareholders via a share buy-back programme. Following approval and up to 31 December 2011, the Company repurchased for cancellation 11.7 million shares for a total consideration of GBP87 million. The closing share count at the end of the quarter was 1,741 million. Risks and uncertainties The Board continually assesses and monitors the key risks of the business. The following key risks that could affect the Group's long-term performance, and the factors which mitigate these risks, are set out in more detail on pages 24 - 28 of the 2011 Annual Report (save for the additional risk relating to our exposure to the European financial crisis). Other than where indicated below, the Board does not consider that the following principal risks and uncertainties have changed. Additional risks and uncertainties of which we are not aware or which we currently believe are immaterial may also adversely affect our business, financial condition, prospects, liquidity or results of operations. * The Group's business is highly regulated and changes in regulations, changes in interpretation of existing regulations or failure to obtain required regulatory approvals or licences could adversely affect the Group's ability to operate or compete effectively. Since the 2011 Annual Report, the Competition Commission has provisionally found that the Group's control over Pay-TV movie rights in the United Kingdom is restricting competition between Pay-TV providers. It also issued a notice of possible remedies and in November 2011 it issued a notice of further possible remedies, each notice setting out possible actions which the Competition Commission may take to address its provisional findings. The Group has announced that it continues to believe that no regulatory intervention is required and that consumers benefit from high levels of choice, value and innovation across a wide range of providers and has noted that the Competition Commission's findings remain provisional and have been issued for consultation. According to its current administrative timetable, the Competition Commission expects to publish its final report in April/May 2012; its statutory deadline for completing its investigation is 3 August 2012. * The Group operates in a highly competitive environment that is subject to rapid change and it must continue to invest and adapt to remain competitive. In the 2011 Annual Report, we referred under this risk heading to Ofcom's launch in June 2011 of a review of TV advertising trading in the UK. Since the 2011 Annual Report, Ofcom has exercised its discretion not to refer TV advertising to the Competition Commission. * The Group's business is reliant on technology which is subject to the risk of failure, change and development. * The Group is reliant on encryption and other technologies to restrict unauthorised access to its services. * Failure of key suppliers could affect the Group's ability to operate its business. * The Group undertakes significant capital expenditure projects, including technology and property projects. * The Group, in common with other service providers that include third party services which the Group retails, relies on intellectual property and proprietary rights, including in respect of programming content, which may not be adequately protected under current laws or which may be subject to unauthorised use. On 4 October 2011, the European Court of Justice ("ECJ") handed down its judgment in actions brought by the Premier League ("PL"), amongst others, against pubs using (and suppliers supplying) foreign decoder cards and boxes to view live PL football. The ECJ determined that restrictions in an agreement between PL and its Greek licensee, which obliged that broadcaster not to supply decoding devices to persons outside the licensed territory, are contrary to EU laws. The ECJ found that, although PL did not have copyright in the live coverage of its football matches, PL title sequences, logo, anthem and graphical elements did attract protection under the Copyright Directive. The High Court will now need to apply the ECJ's judgment to the facts of the cases before it. * The Group generates wholesale revenue principally from one customer. * The Group is subject to a number of medium and long-term obligations. * The Group has some exposure to the European financial crisis although the Group's net euro cash flows are approximately 3% of total group revenues and the Group's practice is to hold less than GBP10 million on deposit in euros. Whilst some of the Group's syndicate banks are headquartered in Europe, the Group does not currently anticipate drawing the RCF. To mitigate remaining risks, counterparty credit and sovereign ratings are closely monitored, and no more than 10% of cash deposits are held with a single bank counterparty (with the exception of overnight deposits which are invested in a spread of AAA-rated liquidity funds). Responsibility statement The directors confirm that to the best of their knowledge: * The unaudited condensed consolidated interim financial statements have been prepared in accordance with IAS 34 as adopted by the EU. * The interim management report includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R of the Disclosure and Transparency Rules. The directors of British Sky Broadcasting Group plc are listed on pages 36 - 37 of the 2011 Annual Report. At the Company's AGM on 29 November 2011, David Evans and Allan Leighton retired from the Board. On the same date, Martin Gilbert and Matthieu Pigasse were appointed to the Board as Independent Non-Executive Directors. Copies of this report are available on the Company's website, [ www.sky.com/corporate ] , and in hard copy from the Company Secretary, British Sky Broadcasting Group plc, Grant Way, Isleworth, Middlesex TW7 5QD. By order of the Board Jeremy Darroch Chief Executive Officer Enquiries: Analysts/Investors: Francesca Pierce Tel: 020 7032 3337 Lang Messer Tel: 020 7032 2657 E-mail: [ investor-relations@bskyb.com ] Press: Robert Fraser Tel: 020 7705 3000 Stephen Gaynor Tel: 020 7705 3000 E-mail: [ corporate.communications@bskyb.com ] Click on, or paste the following link into your web browser, to view the associated PDF document that includes the table Schedule 1 - KPI Summary. [ http://www.rns-pdf.londonstockexchange.com/rns/4377W_-2012-1-30.pdf ] There will be a presentation to analysts and investors at 09:00 a.m. (GMT) today at Deutsche Bank, Great Winchester Street, London, EC2N 2DB. Participants should register by contacting Yasmin Charabati on +44 20 7251 3801 or at [ yasmin.charabati@RLMFinsbury.com ] . In addition, a live webcast of this presentation to UK/European analysts and investors will be available via [ http://www.sky.com/investors ][ http://www.sky.com/ ] investors and subsequently available for replay. There will be a separate conference call for US analysts and investors at 10.00 a.m. (EST) today. To register for this please contact Alexandra Sowinski at Taylor Rafferty on +1 212 889 4350. Alternatively you may register online at [ http://invite.taylor-rafferty.com/_bskyb/cc2012jan/Default.htm ] . A live conference call and supporting materials will be available on Sky's corporate website, [ http://www.sky.com/corporate ] . A replay will be subsequently 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 of the related IFRS measures. Forward-looking statements This document contains certain forward-looking statements with respect to our financial condition, results of operations and business, and our strategy, plans and objectives. 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, revenue, profit, cash flow, product penetration, our broadband network footprint, content, wholesale and returns toshareholders. 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. These factors include, but are not limited to, those risks that are highlighted in the document in the section entitled "Risks and uncertainties". 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 otherwise. This information is provided by RNS The company news service from the London Stock Exchange END