FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934
For the month of February 2008
6 February 2008
BRITISH SKY BROADCASTING GROUP PLC
(Name of Registrant)
Grant Way, Isleworth, Middlesex, TW7 5QD England
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F
Form 20-F X Form 40-F
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934
Yes No X
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): Not Applicable
This report is incorporated by reference in the prospectus contained in the
Registration Statements on Form F-3 (SEC File No.333-08246) and Form F-3/S-3
(SEC File No.333-106837) filed by the Registrant under the Securities Act
of 1933.
EXHIBIT INDEX
Exhibit
EXHIBIT NO. 1 Press release of British Sky Broadcasting Group plc
announcing US Accounting Press Release released on
6 February 2008
BRITISH SKY BROADCASTING GROUP PLC
Results for the half year ended 31 December 2007
Consolidated condensed financial information
Consolidated Income Statement for the half year ended 31 December 2007
---------------------------------------------------------------------------------------------------------
2007/08 2006/07 2006/07
Half year Half year Full year
Notes GBP million GBP million GBP million
---------------------------------------------------------------------------------------------------------
Revenue 2 2,458 2,220 4,551
Operating expense 3 (2,163) (1,825) (3,736)
Operating profit 295 395 815
---------------------------------------------------------------------------------------------------------
Share of results of joint ventures and associates 8 6 12
Investment income 19 24 46
Finance costs (82) (69) (149)
Profit on disposal of joint venture 4 67 - -
Impairment of available-for-sale investment 5 (343) - -
(Loss) profit before tax (36) 356 724
---------------------------------------------------------------------------------------------------------
Taxation (76) (110) (225)
(Loss) profit for the period (112) 246 499
---------------------------------------------------------------------------------------------------------
(Loss) earnings per share from (loss) profit for
the period (in pence)
Basic 6 (6.4p) 14.0p 28.4p
Diluted 6 (6.4p) 14.0p 28.2p
---------------------------------------------------------------------------------------------------------
Consolidated Statement of Recognised Income and Expense for the half year ended
31 December 2007
---------------------------------------------------------------------------------------------------------
2007/08 2006/07 2006/07
Half year Half year Full year
GBP million GBP million GBP million
---------------------------------------------------------------------------------------------------------
(Loss) profit for the period (112) 246 499
---------------------------------------------------------------------------------------------------------
Net movement reported directly in equity
Cash flow hedges 9 21 39
Tax on cash flow hedges (3) (6) (12)
Loss on available-for-sale investments (192) (207) (151)
Transfer to profit on impairment of
available-for-sale investment 343 - -
157 (192) (124)
Total recognised income and expense for the period 45 54 375
---------------------------------------------------------------------------------------------------------
Consolidated Income Statement for the three months ended 31 December 2007
-------------------------------------------------------------------------------------------------------------------
2007/08 2006/07
Three months Three months
ended 31 ended 31
December December
GBP million GBP million
-------------------------------------------------------------------------------------------------------------------
Revenue 1,273 1,149
Operating expense (1,121) (934)
------------------------------------------------------------------------------------------------------------------
|EBITDA 214 262 |
|Depreciation and amortisation (62) (47) |
------------------------------------------------------------------------------------------------------------------
Operating profit 152 215
-------------------------------------------------------------------------------------------------------------------
Share of results from joint ventures and associates 5 4
Investment income 4 10
Finance costs (42) (39)
Profit on disposal of joint venture 67 -
Impairment of available-for-sale investment (343) -
(Loss) profit before tax (157) 190
-------------------------------------------------------------------------------------------------------------------
Taxation (39) (60)
(Loss) profit for the quarter (196) 130
-------------------------------------------------------------------------------------------------------------------
Earnings per share from (loss) profit for the
quarter (in pence)
Basic and diluted (11.2) 7.4
The consolidated income statement for the three months ended 31 December 2007 is
not extracted from the Group's Interim Management Report for the period ended 31
December 2007.
Consolidated Balance Sheet as at 31 December 2007
-------------------------------------------------------------------------------------------------------------------
31 December 31 December 30 June
2007 2006 2007
Notes GBP million GBP million GBP million
-------------------------------------------------------------------------------------------------------------------
Non-current assets
Goodwill 845 659 741
Intangible assets 283 209 261
Property, plant and equipment 682 593 670
Investments in joint ventures and associates 106 31 34
Available-for-sale-investments 611 771 797
Deferred tax assets 47 79 54
Trade and other receivables 36 - -
Derivative financial assets 8 - -
2,618 2,342 2,557
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Current assets
Inventories 664 609 384
Trade and other receivables 570 568 524
Short-term deposits 1 202 15
Cash and cash equivalents 389 402 435
Derivative financial assets 5 6 5
1,629 1,787 1,363
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Total assets 4,247 4,129 3,920
-------------------------------------------------------------------------------------------------------------------
Current liabilities
Borrowings 98 548 16
Trade and other payables 1,627 1,469 1,295
Current tax liabilities 138 140 144
Provisions 10 4 8
Derivative financial liabilities 21 36 36
1,894 2,197 1,499
-------------------------------------------------------------------------------------------------------------------
Non-current liabilities
Borrowings 2,038 1,751 2,014
Trade and other payables 96 63 84
Provisions 37 18 18
Derivative financial liabilities 240 245 258
2,411 2,077 2,374
-------------------------------------------------------------------------------------------------------------------
Total liabilities 4,305 4,274 3,873
-------------------------------------------------------------------------------------------------------------------
Shareholders' (deficit) equity 8 (58) (145) 47
-------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' (deficit) 4,129
equity 4,247 3,920
-------------------------------------------------------------------------------------------------------------------
Consolidated Cash Flow Statement for the half year ended 31 December 2007
----------------------------------------------------------------------------------------------------------------------
2007/08 2006/07 2006/07
Half year Half year Full year
Notes GBP million GBP million GBP million
----------------------------------------------------------------------------------------------------------------------
Cash flows from operating activities
Cash generated from operations 9 429 365 1,007
Interest received 22 32 46
Taxation paid (80) (39) (128)
Net cash from operating activities 371 358 925
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Cash flows from investing activities
Dividends received from joint ventures and associates 5 4 9
Net funding to joint ventures and associates (2) - (3)
Purchase of property, plant and equipment (91) (131) (292)
Purchase of intangible assets (62) (27) (64)
Purchase of available-for-sale investments (7) (975) (947)
Purchase of subsidiaries (net of cash and cash
equivalents purchased) (71) (19) (104)
Decrease in short-term deposits 14 445 632
Net cash used in investing activities (214) (703) (769)
----------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities
Proceeds from borrowings 54 550 295
Repayment of borrowings (8) (191) (192)
Proceeds from disposal of shares in Employee Share
Ownership Plan ("ESOP") 16 8 37
Purchase of own shares for ESOP (23) (13) (76)
Purchase of own shares for cancellation - (214) (214)
Interest paid (86) (92) (154)
Dividends paid to shareholders (156) (117) (233)
Net cash used in financing activities (203) (69) (537)
----------------------------------------------------------------------------------------------------------------------
Net decrease in cash and cash equivalents (46) (414) (381)
----------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at the beginning of the period 435 816 816
Cash and cash equivalents at the end of the period 389 402 435
----------------------------------------------------------------------------------------------------------------------
Notes to the consolidated interim financial statements
1 Basis of preparation
The financial information set out in this press release does not constitute
statutory financial statements for the half year ended 31 December 2007, for the
purpose of the Companies Act 1985, but is extracted from the condensed
consolidated interim financial statements prepared in accordance with IAS 34
'Interim Financial Reporting' ("IAS 34") as presented in the unaudited Interim
Management Report dated 31 December 2007. Copies of the Interim Management
Report are available from the British Sky Broadcasting web page at
www.sky.com/corporate. The financial information for the full year ended 30 June
2007 is extracted from the statutory financial statements for that year. A copy
of the statutory accounts has been delivered to the Registrar of Companies. The
Group's auditors have reported on those accounts; their reports were unqualified
and did not contain statements under s. 237(2) or (3) Companies Act 1985.
Whilst the financial information included in this press release has been
prepared in accordance with the recognition and measurement principles of
International Financial Reporting Standards ("IFRS"), this announcement does not
itself contain sufficient information to comply with IFRS.
The Group maintains a 52 or 53 week fiscal year ending on the Sunday nearest to
30 June in each year. In fiscal year 2008, this date will be 29 June 2008, this
being a 52 week year (fiscal year 2007: 1 July 2007, 52 week year). Similarly,
the condensed consolidated interim financial statements are based on the Sunday
nearest to 31 December in each year. In fiscal year 2008, this date was 30
December 2007 (fiscal year 2007: 31 December 2006) For convenience purposes, the
Group continues to date its consolidated financial statements as at 30 June, and
its condensed consolidated interim financial statements as at 31 December.
2 Revenue
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2007/08 2006/07 2006/07
Half year Half year Full year
GBP million GBP million GBP million
-------------------------------------------------------------------------------------------------------------------
Retail subscription 1,853 1,638 3,406
Wholesale subscription 88 109 208
Advertising 167 171 352
Sky Bet 24 20 47
Installation, hardware and service 148 119 212
Other 178 163 326
2,458 2,220 4,551
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3 Operating expense
-------------------------------------------------------------------------------------------------------------------
2007/08 2006/07 2006/07
Half year Half year Full year
GBP million GBP million GBP million
-------------------------------------------------------------------------------------------------------------------
Programming 858 748 1,539
Transmission and related functions 254 181 402
Marketing 405 375 734
Subscriber management 379 313 618
Administration 267 208 443
2,163 1,825 3,736
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Included within programming for the full year ended 30 June 2007 and half year
ended 31 December 2006 is a GBP65 million credit due to the Group arising from
certain contractual rights under one of the Group's channel distribution
agreements. This item was previously disclosed as a contingent asset in the
Group's June 2006 financial statements.
Included within administration for the half year ended 31 December 2007 is GBP12
million (2007: half year GBP6 million; full year GBP16 million) of expense
relating to legal costs incurred on the Group's ongoing claim against EDS (the
information and technology solutions provider (see note 10b)).
4 Profit on disposal of joint venture
On 12 December 2007, the Group sold its 100% stake in BSkyB Nature Limited, the
investment holding company for the Group's 50% interest in the NGC-UK
Partnership. As consideration for the disposal, the Group received 21% interests
in both NGC Network International LLC and NGC Network Latin America LLC (in
effect, 21% of National Geographic Channel's television operations outside of
the US). This realised a profit on disposal of GBP67 million.
5 Impairment of available-for-sale investment
The impairment of available-for-sale investment relates to the Group's
investment in ITV plc ("ITV"). As required by IAS 39, following a review of the
carrying value of the investment in ITV at 31 December 2007, the Group has
recognised an impairment loss of GBP343 million in the current period. The
impairment loss was determined with reference to ITV's closing equity share
price of GBP0.87 at 28 December 2007, the last trading day of the Group's fiscal
half year, and is attributable to the significant and prolonged decline in the
ITV equity share price.
In accordance with IAS 39, the effect of any further decline in the value of the
equity share price of ITV will be recognised in the income statement at the
relevant future balance sheet date. On 4 February 2008, the equity share price
of ITV was GBP0.79.
6 Earnings per share
--------------------------------------------------------------------------------------------------------------------
2007/08 2006/07 2006/07
Half year Half year Full year
Millions of Millions of Millions of
shares shares shares
--------------------------------------------------------------------------------------------------------------------
The weighted average number of shares for the
period was
Ordinary shares 1,753 1,765 1,759
ESOP trust ordinary shares (5) (3) (4)
Basic shares 1,748 1,762 1,755
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Dilutive ordinary shares from share options - 1 12
Diluted shares 1,748 1,763 1,767
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The calculation of diluted (loss) earnings per share excludes 22 million share
options (2007: half year 21 million; full year 17 million), which could
potentially dilute earnings per share in the future.
Basic and diluted (loss) earnings per share is calculated by dividing loss or
profit for the period into the weighted average number of shares for the period.
In order to provide a measure of underlying performance, management have chosen
to present an adjusted profit for the year which excludes items that may distort
comparability. Such items arise from events or transactions that fall within the
ordinary activities of the Group but which management believe should be
separately identified to help explain underlying performance.
--------------------------------------------------------------------------------------------------------------------
2007/08 2006/07 2006/07
Half year Half year Full year
GBP million GBP million GBP million
Reconciliation from (loss) profit for the period to adjusted profit
for the period
(Loss) profit for the period (112) 246 499
Remeasurement of all derivative financial instruments (not qualifying
for hedge accounting) (4) (8) (6)
Amount receivable from channel distribution agreement (see note 3) - (65) (65)
Legal costs relating to claim against EDS (see note 3) 12 6 16
Profit on disposal of joint venture (67) - -
Impairment of available-for-sale investment 343 - -
Tax effect of above items (2) 20 17
Adjusted profit for the period 170 199 461
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7 Dividends
--------------------------------------------------------------------------------------------------------------------
2007/08 2006/07 2006/07
Half year Half year Full year
GBP million GBP million GBP million
--------------------------------------------------------------------------------------------------------------------
Dividends declared and paid during the period
2006 Final dividend paid: 6.70p per ordinary share - 117 117
2007 Interim dividend paid: 6.60p per ordinary share - - 116
2007 Final dividend paid: 8.90p per ordinary share 156 - -
156 117 233
--------------------------------------------------------------------------------------------------------------------
The 2008 interim dividend is 7.1p per ordinary share being GBP125 million. The
dividend was proposed after the balance sheet date and is therefore not
recognised as a liability as at 31 December 2007.
8 Reconciliation of movement in shareholders' (deficit) equity
--------------------------------------------------------------------------------------------------------------------
Share Share ESOP Hedging Available- Other Retained Total
for shareholders'
-sale (deficit)
capital premium reserve reserve reserve reserves earnings equity
GBP GBP GBP GBP GBP GBP GBP GBP
Gmillion million million million million million million million
--------------------------------------------------------------------------------------------------------------------
At 1 July 2006 896 1,437 (25) (52) - 311 (2,446) 121
Purchase of own shares for
cancellation (20) - - - - 20 (214) (214)
Recognition and transfer of cash
flow hedges - - - 21 - - - 21
Tax on items taken directly to
equity - - - (6) - - (1) (7)
Revaluation of available-for
sale-investment - - - - (207) - - (207)
Share-based payment - - 1 - - - 11 12
Profit for the period - - - - - - 246 246
Dividends - - - - - - (117) (117)
At 31 December 2006 876 1,437 (24) (37) (207) 331 (2,521) (145)
--------------------------------------------------------------------------------------------------------------------
Recognition and transfer of cash - - - 18 - - - 18
flow hedges
Tax on items taken directly to
equity - - - (6) - - 6 -
Revaluation of available-for-sale
investment - - - - 56 - - 56
Share-based payment - - (30) - - - 11 (19)
Profit for the period - - - - - - 253 253
Dividends - - - - - - (116) (116)
At 30 June 2007 876 1,437 (54) (25) (151) 331 (2,367) 47
--------------------------------------------------------------------------------------------------------------------
Recognition and transfer of cash - - - 9 - - - 9
flow hedges
Tax on items taken directly to
equity - - - (3) - - (1) (4)
Revaluation of available-for-sale
investment - - - - (192) - - (192)
Impairment of available-for-sale
investment - - - - 343 - - 343
Share-based payment - - 25 - - - (18) 7
Loss for the period - - - - - - (112) (112)
Dividends - - - - - - (156) (156)
At 31 December 2007 876 1,437 (29) (19) - 331 (2,654) (58)
--------------------------------------------------------------------------------------------------------------------
9 Notes to the consolidated cash flow statement
Reconciliation of (loss) profit before taxation to cash generated from
operations
----------------------------------------------------------------------------------------------------------------
2007/08 2006/07 2006/07
Half year Half year Full year
GBP million GBP million GBP million
----------------------------------------------------------------------------------------------------------------
(Loss) profit before tax (36) 356 724
Depreciation of property, plant and equipment 77 58 120
Amortisation of intangible assets 43 33 72
Profit on disposal of joint venture (67) - -
Impairment of available-for-sale investments 343 - -
Net finance costs 63 45 103
Share of results of joint ventures and associates (8) (6) (12)
415 486 1,007
----------------------------------------------------------------------------------------------------------------
Increase in trade and other receivables (95) (118) (47)
Increase in inventories (264) (294) (59)
Increase in trade and other payables 366 289 101
Increase (decrease) in provisions 12 (3) 1
(Increase) decrease in derivative financial instruments (5) 5 4
Cash generated from operations 429 365 1,007
----------------------------------------------------------------------------------------------------------------
10 Other matters
a) Contingent liabilities
In April 2007, Virgin Media Communications Limited, Virgin Media Television
Limited and Virgin Media Limited issued proceedings in the High Court in England
and Wales against British Sky Broadcasting Group plc and British Sky
Broadcasting Limited, alleging that the Group has infringed Article 82 EC and
the Chapter II prohibition by pursuing an anticompetitive strategy designed to
weaken Virgin Media group, which allegedly entailed: (i) a constructive refusal
to supply the Group's basic pay television channels to Virgin Media group for
supply via Virgin Media group's cable network in the UK; (ii) a refusal to pay
fair prices for the right to carry Virgin Media group's television channels as
part of the Group's retail channel offering; and (iii) the Group's purchase of a
significant shareholding in ITV (which purchase was, it is alleged, designed
principally to damage Virgin Media group's ability to compete in the supply of
pay television services, by preventing Virgin Media group from obtaining access
to attractive programming content). Virgin Media group seeks from the Court a
declaration that the Group occupies a dominant market position in specified pay
TV retail and purchasing markets in the UK and that the Group has, by its
conduct as alleged, abused its dominant position(s) contrary to Article 82 EC
and the Chapter II prohibition on these relevant markets. Virgin Media group
also seeks mandatory injunctions requiring the Group to transact with Virgin
Media group on fair and/or non-discriminatory terms for the supply of the
Group's basic pay television channels to Virgin Media and for the licensing of
Virgin Media group's television channels, for on-supply to the Group's
subscribers. Virgin Media group also seeks damages to compensate it for its
alleged losses arising from the Group's alleged conduct.
The Group intends to defend the proceedings vigorously and submitted its defence
to the High Court on 2 July 2007 denying Virgin Media group's allegations that
it had infringed Article 82 EC or Chapter II prohibition. A start date for trial
has been provisionally set for February 2009. It is, at this stage, too early to
estimate the likely outcome of the proceedings.
b) Contingent assets
The Group has served a claim, which is currently being heard in the High Court
of Justice, for a material amount against EDS (an information and technology
solutions provider) which provided services to the Group as part of the Group's
investment in customer management systems software and infrastructure. The
amount which may be recovered by the Group will not be finally determined until
resolution of the claim.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BRITISH SKY BROADCASTING GROUP PLC
Date: 6 February 2008 By: /s/ Dave Gormley
Dave Gormley
Company Secretary