BSkyB gives £1bn to shareholders

29 July 2011 Last updated at 03:51 ET

BSkyB confirmed that James Murdoch would be staying on as its chairman

Satellite broadcaster BSkyB is returning £1bn to shareholders through a higher dividend and share buyback.

Its shares have fallen sharply since last month amid the phone-hacking scandal and the end of News Corporation’s bid for BSkyB.

The announcement came with the publication of a 15% fall in annual pre-tax profits to £1.01bn.

But operating profits, which exclude earnings from non-core activities such as investments, rose 23% to £1.07bn.

BSkyB’s board also confirmed that James Murdoch will stay on as its chairman, despite the phone-hacking scandal.

“There was a long discussion as would expect at the board yesterday around governance, and that included the role of chairman, and the outcome was that the board was unanimous in its support for James as chairman,” BSkyB chief executive Jeremy Darroch told BBC News.

BSkyB is raising its dividend 20% to 23.28 pence per share and has announced a £750m share buyback.

This should help to placate shareholders, as the value of their shares has fallen 15% since in the last month.

Triple-play

BSkyB increased its customer base by 426,000 in the year to give it a total of 10,294,000 subscribers.

Average revenue per customer grew £31 to £539 per customer.

One of the key targets for media companies at the moment is persuading customers to each take more of their products, such as broadband and landline telephone services, together with television.

“Critically, they’ve put on a 37% increase in triple-play, that’s people who take pay-TV, telephone and broadband,” said Steve Hewlett from BBC Radio 4’s Media Show.

“That’s the holy grail – that’s what everyone is after, and they’ve now got 27% of their customers, 2.8 million people, taking all three services.”

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