BSkyB Interim Results To Feature Details On Digital Plans
02/02/98
Dow Jones News Service
(Copyright (c) 1998, Dow Jones & Company, Inc.)
LONDON (Dow Jones)--Interim results from British Sky Broadcasting Group PLC (bsy) due Tuesday will be overshadowed by a presentation the company has promised about its plans to launch digital services later this year.
Chief Executive Mark Booth, who officially assumed the post in November, will aim to reassure investors that the company has a coherent game plan for digital and that the expansion will return the satellite broadcaster to the strong growth it enjoyed during the mid-1990s.
Uncertainty about the much delayed digital launch, and in particular, fears that regulators may block a proposed interactive venture with British Telecommunications PLC, has resulted in BSkyB stock falling nearly 25% since early January. This leaves the stock, down 16.5 pence at 345 pence around 1340 GMT Monday, at little more than half its 1997 high of 662 pence.
The importance of British Interactive Broadcasting, in which BSkyB and BT each have 32.5% stakes and Midland Bank and Matsushita Electric have respective 20% and 15% stakes, is that it provides the so-called 'return path' from customers' homes enabling interactive functions such as banking, Internet access, home shopping and pay per view movies.
BIB, moreover, is the vehicle BSkyB intends to use to subsidize the price of digital decoder box sales to consumers. Keeping the price below GBP200 - against an initial manufacturing cost of GBP300-400 - is deemed crucial to stoking consumer demand.
Yet whether Booth can assuage investor confidence about digital is open to question. European Union Commission officials have repeatedly stressed that competition concerns are inherent in BIB's proposed subsidy and the related benefit that is conferred to BSkyB's core retail pay television business. When or what basis the E.U. clears BIB remains clouded by uncertainty.
For Tuesday's figures, analysts are forecasting that interim pretax profit will be around the GBP134 million recorded a year ago as satellite subscriber growth has declined and programming costs have risen. In addition, there is the matter of continuing investment in digital systems.
The interim dividend is expected to rise by about 10% from the payout a year ago of 2.75 pence per share.
(END) DOW JONES NEWS 02-02-98 |
