Sky (SKYAY) shares slipped Thursday after slowing customer growth and increased cord-cutting in its key U.K. market overshadowed an otherwise positive set of full-year results.
The broadcaster added just 35,000 new customers in the U.K., its largest market, down from 93,000 in the previous year, while average revenues per user flattened in the U.K. and fell in Germany.
That said, Sky saw total revenue grow by 10% to £12.9 billion ($16.7 billion) in the twelve months to June 30, which was in line with the Factset consensus, while operating profit of £1.46 billion represents a fractional beat against expectations. Adjusted earnings per share of 61.4 pence were 2.6% higher than expected.
Sky stock fell 0.10% during early trading in London, to change hands at a session low of 963.5 pence, dragging the shares to a 2.57% year to date loss. This came in contrast to otherwise strong gains across the European media and telecoms space.
"We enter 17/18 in a strong position with significant growth potential. Despite the broader consumer environment remaining uncertain, we are confident of delivering on the plans we've laid out as we continue to give our customers the best content, great products and industry leading service," said CEO Jeremy Darroch.
Sky has pledged to increase its investment in original content by 25% and to roll out its SkyQ platform, which enables customers to watch television across multiple devices at the same time, in Italy, Germany and Austria.
The British company is currently the subject of an £11.7 billion ($12.2 billion) offer from 21st Century Fox (FOX) - Get Fox Corporation Class B Report . The Murdoch family controlled company wants to buy the 61% of the broadcaster that it does not already own however, the bid has been slowed by extensive antitrust and broadcasting standards reviews in the U.K. and Europe.
"The Fox bid will support the shares but any concerns over the bid not going through will refocus attention on the fundamentals," said Liberum Capital analyst Ian Whittaker.
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