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British Sky Broadcasting Group PLC: Interim Results Announcement

MIDDLESEX, UNITED KINGDOM -- (Marketwired) -- 01/30/14 --



                  BRITISH SKY BROADCASTING GROUP PLC
      Unaudited results for the six months ended 31 December 2013



                      Adjusted results(1)        Statutory results
Half year         2013/14   2012/13 Variance  2013/14  2012/13  Variance

Revenue(1)       GBP3,751m GBP3,487m  +7.6%  GBP3,757m GBP3,533m  +6.3%
EBITDA            GBP813m   GBP813m     0%    GBP794m   GBP845m   -6.0%
Operating profit  GBP595m   GBP647m   -8.0%   GBP565m   GBP679m   -16.8%
Earnings per share 27.3p     28.3p    -3.5%    26.2p     29.7p    -11.8%
(basic)
Dividend per share 12.0p     11.0p    +9.1%    12.0p     11.0p     +9.1%


                 STRONG FIRST HALF WITH EXCELLENT GROWTH

Growth in paid-for products up 42%year on year
  * 873,000 new paid-for subscription products in Q2
  * High Definition and Broadband now in 5 million homes
  * 36% of customers now take triple play, 534,000 more than a year
    ago

Leading in connected TV growth; investment driving returns
  * Record growth in connected Sky+HD boxes, up 1 million in Q2 to
    4.4 million
  * Threefold increase in On Demand usage
  * Sky Store transactional revenues up 100%

Extending leadership in content across all genres
  * Major new partnership with HBO
  * Landmark deal with ITV to include new drama channel exclusive to
    Sky
  * Record audiences for new UK commissioned drama
  * Sky Sports viewing at highest level for 6 years

Good financial performance in line with expectations
  * Adjusted revenue1 up 8% to GBP3,751 million
  * Adjusted EBITDA flat at GBP813 million despite investment in
    connected TV services and one-off step up in Premier League costs
  * Adjusted basic earnings per share down 3.5% to 27.3 pence
  * Interim dividend up 9% to 12.0 pence
___________________________

(1) Adjusted revenue as presented here is from recurring activities. It
excludes revenues earned from the discontinued retailing of the ESPN
channel in the current and prior periods. The current period includes
the consolidation of revenues from former O2 broadband customers.

Jeremy Darroch, Chief Executive, commented:"We had a very good first six
months of the year as we reaped the
benefits of our broader-based approach to growth. In a consumer
environment that remains challenging, customers continued to choose to
take Sky products in ever greater numbers in the run-up to Christmas,
with Q2 growth up by over 40% on last year. In the last 12 months, we
have added 3.8 million paid-for subscription products, the fastest rate
of annual growth in three years."Customer demand in Q2 was strong across
the board with good growth in
all products. In a good quarter for TV growth, HD passed the milestone
of 5 million customers, boosted by the success of our autumn
advertising campaign with Joanna Lumley. Home communications also did
well as customers continued to respond to the market-leading quality
and value that Sky offers. Total sales of home communications products
increased 4% year on year in the first half."The investments we are making
to accelerate growth in connected TV
services are delivering excellent results. We added a record 1 million
connected Sky+HD boxes in Q2 - almost 11,000 a day - to take our base
of connected homes to 4.4 million. This explosive growth means that Sky
has quickly established itself as Britain's biggest connected TV
platform and, with millions of customers yet to connect their boxes,
there is still a big opportunity ahead."Everything that we see tells us
that customers love the benefits that
come with the connected box. On Demand usage more than trebled year on
year and the number of movie rentals through Sky Store doubled as
customers responded to greater flexibility and choice. More customers
than ever are choosing Sky Go to watch content both in and out of the
home, helped by the addition of 14 new entertainment channels and the
launch of Sky Go on more connected devices. We continue to see
significant opportunity for accelerated growth and returns as we use
our innovation to differentiate our offering and give Sky customers the
best ways to enjoy our content."We have further strengthened our market-
leading content offering
through significant new partnerships. An expanded partnership with HBO
will see the two companies work together to co-produce major new
cinematic drama series while Sky Atlantic remains the exclusive home of
HBO programmes until 2020. In addition, a landmark new deal with ITV
means there will be no better place to enjoy ITV on multiple devices,
both at home and on the go."Our financial performance was strong in the
first half and we remain
on track for the full year. Good operating momentum led to an 8%
increase in revenues for the period, excluding revenues from the
discontinued retailing of ESPN. We are moving through a year of
investment in which we are absorbing the one-off step up in Premier
League costs well, with adjusted EBITDA flat thanks to a continued
focus on operating efficiency. The 9% increase in the interim dividend
to 12.0 pence, the tenth consecutive year of growth, reflects our
confidence in the strength of our business and the progress we are
making."

Results Highlights

Customer Metrics (unaudited)

                           As at     As at     Annual  Quarterly Growth
                       31-Dec-13 31-Dec-12     Growth      to 31-Dec-13

Total paid-for products
('000s)                   33,307    29,513     +3,794              +873
 TV                       10,536    10,358       +178               +77
 HD                        5,005     4,561       +444              +112
 Multiroom                 2,528     2,467        +61               +25
 Sky Go Extra                643         -       +643              +258
 Broadband                 5,127     4,235       +892              +110
 Telephony                 4,792     4,022       +770              +140
 Line rental               4,676     3,870       +806              +151

Paid-for products per
retail customer              2.9       2.7

New connected TV
services ('000s)
 Internet-connected
 Sky+HD boxes              4,352     1,715     +2,637            +1,001
 Sky Go unique
 users                     3,314     3,066       +248               +23

Other metrics
Total Customers ('000s)   14,954    14,493       +461              +113
 Retail Customers         11,330    10,742       +588              +106
 Wholesale
 Customers (1)             3,624     3,751       -127                +7

ARPU (2)                  GBP570    GBP558     +GBP12            +GBP11
Triple-play                  36%       33%        +3%                 -
Churn (3)                  10.8%     10.3%      +0.5%             -0.2%


An additional KPI summary table containing further detailed disclosure
can be found in Schedule 1.

Business Performance (4)
(unaudited)
GBP'millions                     6 months to  6 months to
                                   31-Dec-12   31-Dec 13    Movement

Adjusted revenue (5)                   3,751       3,487       +7.6%
Adjusted EBITDA                          813         813          0%
% Adjusted EBITDA profit margin        21.6%       23.0%       -1.4%
Adjusted operating profit                595         647       -8.0%
Adjusted profit before tax               554         610       -9.2%
Adjusted basic earnings per
share (6)                              27.3p       28.3p       -3.5%

(1) Wholesale customers taking at least one paid-for Sky channel. The
customer numbers are as reported to us at November 2013.

(2) Quarterly annualised. Excluding revenues earned from retailing the
ESPN channel.

(3) Quarterly annualised.

(4) A reconciliation of adjusted EBITDA, adjusted operating profit and
adjusted profit before tax to statutory measures is set out in Appendix
2.

(5) Adjusted revenue as presented here is from recurring activities. It
excludes revenues earned from the discontinued retailing of the ESPN
channel in the current and prior periods. The current period includes
the consolidation of revenues from former O2 broadband customers.

(6) Adjusted basic earnings per share is calculated from adjusted profit
for the period. A reconciliation of statutory profit to adjusted profit
is set out in note 4 to the consolidated financial information.

SUMMARY OF OPERATIONAL AND FINANCIAL PERFORMANCE

We delivered another very strong performance in the first half of the
year, further enhancing our position as Britain and Ireland's favourite
home entertainment and communications provider. In the second quarter,
we built on the strong momentum of Q1 to deliver the fastest rate of
organic growth in paid-for subscription products in seven quarters.

Strong customer demand drove an increase of 873,000 paid-for
subscription products in the three months ended 31 December 2013, 42%
higher than the same period last year. TV products saw the highest
quarterly growth for three years, boosted by a strong performance from
HD. In all, we added 112,000 new HD customers, taking our total HD base
past the five million milestone. Sky Go Extra, our paid-for mobile TV
service, also grew well with 258,000 net new additions in the quarter.
This took the total base to 643,000, less than one year after launch.

The growth of NOW TV was supported by a positive customer response to
our new low-cost NOW TV box, which we started to market in the autumn.
In addition, we achieved the highest sales of NOW TV's sports day pass
in Q2 on 10 November, featuring Sky Sports' live coverage of Manchester
United versus Arsenal in the Premier League.

Home communications continued to perform well. We added 110,000 net new
broadband customers in Q2 to take the base to 5.1 million, cementing
our position as number 2 in the broadband sector. At the same time, we
added 140,000 new products in telephony and 151,000 in line rental. In
all, 36% of our customer base take all three of TV, broadband and
telephony from Sky, 534,000 more than a year ago.

We ended Q2 with 11.3 million retail customers, net growth of 106,000

,
20% higher year on year. Strong growth across all our products
contributed to a GBP12 year on year increase in ARPU to GBP570. Churn
for the quarter was 10.8%.

Our continued operating momentum drove an 8% rise in adjusted revenue
to GBP3,751 million. Adjusted EBITDA was flat while adjusted operating
profit was down 8% and adjusted basic earnings per share were down 3.5%
to 27.3 pence. This reflects the previously announced one-time step-up
in Premier League costs and our investments to accelerate take-up and
usage of connected TV services. We remain on track with our plans for
the year.

On the back of the strong operating growth, the Board has declared an
interim dividend of 12.0 pence per share, an increase of 9% year on
year and the tenth consecutive year of growth.

Content

We have further extended our market-leading content offering with a
good performance across our channel portfolio. As an indication of the
growing breadth and quality of our on-screen offering, the number of
shows on Sky's entertainment channels attracting audiences over 1
million increased by more than 25% in the first half against the same
period last year and has more than doubled over a three-year period.

Today, we have announced a major new partnership with HBO which will
build on the success of Sky Atlantic, rated by customers as one of
their top three must-have pay channels. Under the terms of the new
agreement, Sky and HBO will co-produce major new cinematic drama series
for broadcast both on Sky Atlantic and on HBO's networks in Europe and
the US. In addition, an extension to our content output deal ensures
that Sky remains the exclusive home of HBO programmes in Britain and
Ireland for the next six years.

The extended output deal means that new HBO programmes - including the
much-anticipated drama True Detective starring Woody Harrelson and
Matthew McConaughey - will premiere exclusively on Sky Atlantic along
with the return of award-winning shows such as Game of Thrones and
Girls. As part of the deal, Sky customers will enjoy extended access to
HBO content on demand and on the go.

Earlier this week, we also announced a broad new partnership with ITV,
the UK's largest commercial broadcaster. The deal will give Sky
customers unrivalled access to ITV programming including a brand new
pay TV channel, ITV Encore. As part of the long-term agreement, ITV's
content will be made available across the entire range of Sky's digital
and connected platforms, including Sky Go, NOW TV and Sky Store, where
it will help to drive transactional revenues.

ITV Encore, ITV's first brand new channel launch in eight years, will
initially be available exclusively on the Sky platform, serving as the
home of some of ITV's most successful dramas. ITV will also commission
new pay-only dramas for the new channel which will hit screens from
2015 onwards. This will make Sky the best place to enjoy ITV content,
further strengthening our entertainment offering and helping us reach
into new segments of the market. Available to all Sky TV customers at
no extra charge, ITV Encore will also increase value for existing
customers.

These new channel partnerships reinforce Sky's commitment to bring our
customers new and distinctive content. On our own channels, our big
push on drama in the run-up to Christmas brought success with the
launch episodes of Yonderland, Moonfleet and Dracula all attracting
more than one million viewers. The Tunnel, our Anglo-French crime
drama, has been the most successful original commission for Sky
Atlantic and Dracula, our co-production with NBC, was the most
successful original scripted commission for Sky Living. We have also
seen good success with US-acquired content with The Blacklist, starring
James Spader on Sky Living, one of the stand-out hits in the run-up to
Christmas. Looking forward, we have more than 100 hours of drama and
comedy in production including Fortitude and Critical, two large-scale
dramas with world-class casting.

Sky Movies enjoyed a strong first half with viewing up 3% with much of
that performance being driven by strong growth in non-linear viewing.
Movie downloads via our On Demand service grew by 111% over the
Christmas period, with Arthur Christmas the top-performing title.

Share of viewing to Sky Sports hit its highest level for six years in
the first half, for the first time out-rating BBC2, Five and Channel 4
in Sky homes. This represented a 5% increase on last year, despite the
Ryder Cup benefitting viewing in 2012. Within this, our coverage of
thePremier League performed very well. Average audiences over our 59
exclusively live games to the end of December were up 7% year on year
with Manchester United versus Arsenal recording the largest audience of
the season, with a peak of 3.2 million and a further 302,000 watching
on Sky Go. In addition, audiences for England's Autumn Rugby Union
Internationals were up 13% on last year, including a record audience
for an England Rugby Union fixture on Sky, for England vs New Zealand.

We have also signed new long-term rights agreements across six sports,
including Super League, British and Irish Lions Rugby Union, England
overseas international cricket, Scottish Football, WWE wrestling and
Elite League Speedway.

At the same time as enhancing our on-screen offering for customers, we
have continued to keep content costs under control. Excluding the
one-time impact associated with the first year of the new Premier
League agreement and the discontinuation of ESPN carriage, programming
costs were up only 1% year on year across the portfolio.

Connected TV Services

Our innovation in connecting our Sky+ HD box platform has led to Sky
rapidly becoming Britain and Ireland's biggest connected TV platform.
It also highlights, once again, our clear lead over competitor
platforms. We have seen positive benefits from higher customer
satisfaction and advocacy from those customers with a connected Sky+HD
box relative to the overall base. Meanwhile, investment in expanding
our On Demand service and raising awareness of its benefits is driving
upsell to higher-tier packages, especially Entertainment Extra Plus. We
have also seen strong growth in Sky Store activity with revenues from
movie rentals doubling in Q2 year on year thanks to strong demand for
titles such as Elysium, Despicable Me 2 and The Hangover Part III.

This increased connectivity in customers' homes is accelerating growth
in take-up and usage of our connected TV services:

* We grew the number of Sky+HD connected homes by a record one
  million in the three months ended 31 December 2013. This means that
  4.4 million of our TV customers now have a connected Sky+HD box, up
  more than 100% year on year.

* We extended the range of channels and programming available On
  Demand, launching 12 new channels on Catch Up TV in Q2 to take the
  total to 56. We also continued to enhance our Box Sets service, an
  exclusive benefit for HD and Entertainment Extra Plus customers, with
  hundreds of hours of new content, including exclusive titles such as
  Game of Thrones and The Sopranos.

* The combination of increased connectivity and an improved range
  of content drove a threefold increase in On Demand usage to hit an
  average weekly download rate of 10.9 million over the quarter. This
  peaked in the Christmas week to an all-time high of 12.4 million
  downloads with a significant growth in usage across all our pay
  content.

* Sky Go extended its leadership in mobile TV with the addition of
  14 new channels in the quarter to take the number of channels on the
  service to a market-leading total of 57. We also expanded the
  availability of Sky Go in the quarter with the launch of the service
  on Android tablets in early December.

* Usage of Sky Go also hit a number of new records in the quarter.
  Total viewing requests for the quarter surpassed 200 million for the
  first time, with On Demand usage driving the majority of that growth,
  rising by 56% year on year. Live entertainment viewing over Sky Go
  also reached a new high in the Christmas week with An Idiot Abroad and
  Strike Back proving to be the mostpopularshows. Additionally, Sky
  Movies viewing set a new record since launch with top-performing
  titles including Iron Man 3 and Wreck-It Ralph.

Customer Service

We took some important steps forward in developing our market-leading
service capability in the second quarter. We are the clear leader in
the triple play sector with the highest satisfaction scores and
lowestnumber of complaints according to latest Ofcom customer satisfaction
and complaints surveys, and our net promoter score, our key internal
measure of performance, reached an all-time high. We successfully
completed the transfer of around 700 AVC engineers to Sky in October,
meaning that all UK service visits are now completed by Sky people with
an immediate positive impact on the customer experience. It also drove
further reductions in the number of service visits, now at their lowest
level in ten years, and a halving in the number of install revisits.

Broader Contribution

In November, we launched Sky Academy, a ground-breaking set of
initiatives to support the under-25s, the generation born since Sky's
launch in 1989. Our ambition is to create opportunities for up to one
million young people by 2020, inspiring them, helping them to build
skills and experience, and nurturing future talent.

Headquartered in a brand new building at the heart of our campus, Sky
Academy will bring together established initiatives, such as the
award-winning Sky Sports Living for Sport, with a range of exciting new
experiences. These include: three more Skills Studios in Livingston,
Leeds and Dublin, which build on the successful London Studio which was
opened in 2013; scholarship schemes to provide mentoring and financial
support for emerging talent in sport, arts and television; and a
comprehensive range of work experience and employment opportunities at
Sky for secondary school students through to graduates, which will
double in size over the next three years.

Financial Strength

Sky begins calendar 2014 in a strong position financially, on track and
moving through the investment cycle well. The Group's liquidity and
cash position remains healthy with average maturity on debt of 7 years.
During calendar 2013, Sky returned a total of GBP769 million to
shareholders in the form of dividends and buybacks while maintaining
our leverage at around 1.1 times net debt/ EBITDA. We are proposing a
9% increase in the interim dividend to 12.0p and, alongside this, we
have GBP434 million remaining of the GBP500 million buyback mandate
approved by shareholders at the 2013 AGM.

DETAILED FINANCIAL PERFORMANCE

We delivered a good financial performance in the first half of what is
a year of investment in the customer proposition. We saw first half
revenue growth of 8% after adjusting for the loss of ESPN revenue,
adjusted operating profit was down 8% and adjusted basic earnings per
share were down 4%, in line with our expectations. Adjusting items are
discussed on page 29.

Unless otherwise stated, all figures and growth rates below exclude
adjusting items.

Revenue

Group revenue increased by 8% to GBP3,751 million (2013: GBP3,487
million) after adjusting for the loss of ESPN revenue, with strong
growth in both our retail and commercial businesses. Our revenue grew
6% on a statutory basis.

Retail subscription revenue grew by 8% to GBP3,078 million (2013:
GBP2,861 million) after adjusting for GBP6 million ESPN revenue (2013:
GBP46 million), reflecting the continued strong product and customer
growth, the September price rise and 46% growth in our transactional
revenues to GBP35 million. Within this, we began to see growth in the
contribution from our new connected services investment with Sky Store
revenues growing by 100% to GBP14 million (2013: GBP7 million) -
equivalent to GBP28 million per annum already.

Our commercial businesses continued the improvement seen in the first
quarter. Advertising revenue was up 7% to GBP231 million (2013: GBP215
million) helped by the post-Olympics increase in the advertising market
and an increase in Sky's share of the advertising market, while we also
saw a first-time contribution from our newly launched AdSmart product.
Wholesale subscription revenue increased by 2% to GBP198 million (2013:
GBP194 million).

Other revenue increased by 21% to GBP206 million (2013: GBP170 million)
with continued strong performance from Sky Bet which saw unique users
up 15%, driving revenues up 27% to GBP84 million (2013: GBP66 million).

Direct Costs

Excluding the one-off GBP108 million step up in the new Premier League
deal and the discontinuation of ESPN carriage, programming costs of
GBP1,313 million (2013: GBP1,222 million) were up only 1% in the period
due to disciplined choices made across our diverse content portfolio. We
continued to strengthen our entertainment offering with further
investment in UK commissioned content, premiering 20 UK commissions in
the quarter.

Tight cost control and positive operating leverage saw direct network
costs increase at a rate 400bps lower than home communications growth.
These costs were up 16% to GBP404 million (2013: GBP348 million) despite
a 20% increase in the volume of home communications products in the last
12 months and a 12% increase in unbundled exchanges, as we continue to
drive efficiencies in this area. Our fully unbundled customers are up
25% year on year, and our unbundled network now serves 90% of UK homes.
Direct network costs also include a one-off step-up as we integrate the
O2 consumer fixed line and broadband business.

Other Operating Costs

Marketing costs increased by 13% to GBP613 million (2013: GBP541
million) driven by the 42% increase in growth of paid-for products
which we saw in the first half and the continued strong customer
response to our connected services investment. We maintained our share
of voice in the market with targeted above-the-line campaigns, and saw
the launch of the NOW TV box and Entertainment pack in November.
Marketing costs represented 16% of revenues - in line with recent
trends.

Subscriber management costs increased by 9% to GBP353 million (2013:
GBP323 million) as we continued to see strong growth in products and
customers and continued to integrate the acquired O2 customers into the
Sky base. Additionally, there was an increase in variable costs
relating to Sky Bet to support the revenue growth and for Sky Italia
box sales.

Transmission, technology and fixed network costs increased by 15% to
GBP221 million (2013: GBP193 million) largely due to the first time
consolidation of the cost base associated with the O2 broadband
business. Administration costs were down year on year at GBP258 million
(2013: GBP259 million).

Depreciation and amortisation grew 31% to GBP218 million (2013: GBP166
million). The increase is due to the integration of the acquired O2
business and the resulting 21% rise in our broadband customer base, and
a higher fixed asset base as we begin to depreciate the development
costs of recently launched products such as Sky Go Extra, NOW TV and
Adsmart.

Connected Services Investment

As outlined at our full year results, we have pressed forward with our
plans to grow our business and create value by driving adoption of our
new connected TV services. We invested approximately GBP40 million in
the first half, the majority of which was variable and the result of
strong customer demand, comprising hardware (wireless connectors, WiFi-
enabled set top boxes, NOW TV boxes), additional content for our Sky Go
and On Demand offerings, and promoting awareness of these services. We
are already seeing clear benefits from this investment in line with our
expectations.

Adjusting Items

Statutory operating profit of GBP565 million (2013: GBP679 million)
includes a total net charge of GBP30 million following the O2 broadband
acquisition comprising one-time customer migration costs, costs
associated with running the network of the acquired O2 business in
parallel to our own whilst the migration process takes place and GBP11
million of amortisation of acquired intangible assets.

Statutory profit after tax of GBP411 million (2013: GBP487 million)
includes a GBP9 million benefit relating to the tax effect on adjusting
items. We also saw a net GBP3 million benefit relating to mark-to-market
values of derivative financial instruments. Please refer to Appendix 2for a
detailed reconciliation of statutory and adjusted numbers.

Earnings

EBITDA of GBP813 million (2013: GBP813 million) and operating profit of
GBP595 million (2013: GBP647 million) were both in line with our plans.
Profit after tax was GBP429 million (2013: GBP463 million), generating
an adjusted basic earnings per share of 27.3 pence (2013: 28.3 pence).
The number of shares in issue at 31 December 2013 was 1,580 million
(31 December 2012: 1,620 million).

Cash generated from operations

The Group continues to generate strong cash flow. Adjusted cash
generated from operations of GBP823 million (2013: GBP858 million) was
down 4% primarily due to the timing impact of payments to third parties.
Adjusted free cash flow was 19% lower at GBP390 million (2013: GBP482
million) reflecting higher capex and increased interest payments
relating to the $800 million bond issued in November 2012.

Capex increased by GBP38 million to GBP245 million (2013: GBP207
million) due to the phasing of payments on our campus redevelopment and
the continued integration of O2 customers. Excluding one-off items
related to the migration of O2 customers and the planned redevelopment
of our Osterley campus, the underlying capex was GBP218 million.

Net debt increased to GBP1,432 million (June 2013: GBP1,183 million)
primarily as a result of share re-purchases of GBP115 million in the
first half and the GBP298 million payment of the full year dividend.
During the period we extended the maturity of our GBP743 million
Revolving Credit Facility for an additional year to 31 October 2018 on
improved terms. For an analysis of movements in net debt see Appendix
2.

Distribution to Shareholders

The Directors have declared an interim dividend of 12.0 pence per share
(2013: 11.0 pence per share) representing an increase of 9% and the
tenth consecutive year of an increase in the interim dividend for
shareholders. In a year of investment in connected services, the
Directors aim to maintain a progressive dividend policy and intend to
reflect underlying earnings when setting the full year dividend. As in
prior years, growth in the interim dividend is expected to be slightly
higher than that expected for the full year. The ex-dividend date will
be 26 March 2014 and the dividend will be paid on 22 April 2014 to
shareholders of record on 28 March 2014.

At the Company's AGM on 22 November 2013, we received shareholder
approval to return a further GBP500 million of capital to shareholders
via a share buyback programme of which GBP434 million capacity remains
available to be used as at January 2014. For the six months to 31
December 2013, the Company repurchased for cancellation a total of 14
million shares for consideration of GBP115 million. The closing share
count at the end of the quarter was 1,580 million.

CORPORATE

Competition Appeal Tribunal (CAT)

In December the Court of Appeal heard appeals by BT, Sky and the FAPL
against the CAT's August 2012 judgment in relation to the imposition by
Ofcom of "Wholesale Must Offer" (WMO) obligations on Sky. Ofcom's WMO
obligations remain in place pending the Court of Appeal's judgment,
which is expected later in the year.

On 13 January 2014, the European Commission opened a formal antitrust
investigation into cross-border provision of pay TV services in the EU.
The Commission will examine certain provisions relating to territorial
protection in licence agreements between major US film studios
(Twentieth Century Fox, Warner Bros., Sony Pictures, NBCUniversal,
Paramount) and key European pay-TV broadcasters (the Group, Canal Plus
in France, Sky Italia, Sky Deutschland and Digital Plus in Spain). The
Commission has not reached any conclusions at this stage and the Group
is not yet able to assess whether, or the extent to which, this review
will have a material effect on the Group.


Enquiries:

Analysts/Investors:

Edward Steel                           Tel: 020 7032 2093
Lang Messer                            Tel: 020 7032 2657

E-mail: [email protected]

Press:

Alice Macandrew                        Tel: 020 7705 3000
Stephen Gaynor                         Tel: 020 7705 3000

E-mail: [email protected]


There will be a presentation for analysts and investors at 9.00 a.m.
(GMT) at Allen & Overy, One Bishops Square, London, E1 6AD. CEO, Jeremy
Darroch and CFO, Andrew Griffith, will present. Participants should
register by contacting Felicity Marshall on +44 20 7251 3801 or at
[email protected].

There will be a separate conference call for US analysts and investors
at 10.00 a.m. (EST). To register for this please contact Dana Diver at
Taylor Rafferty on +1 212 889 4350. Alternatively you may register
online at:
http://invite.taylor-rafferty.com/_bskyb/2013Q2CC/Default.htm.

A live webcast of the UK and US call will be available to analysts and
investors via the BSkyB website at http://www.sky.com/corporate.
Replays will be subsequently available.


Schedule 1 - KPI Summary

All figures
(000)
unless
stated            FY11/12                 FY12/13              FY13/14

             Q2     Q3     Q4     Q1     Q2     Q3     Q4     Q1     Q2

Total
paid-for  26,830 27,734 28,365 28,898 29,513 30,228 31,634 32,434 33,307
subscription
products

 TV       10,253 10,268 10,288 10,308 10,358 10,388 10,422 10,459 10,536
 Sky+ HD   4,063  4,222  4,343  4,468  4,561  4,669  4,786  4,893  5,005
 Multiroom 2,350  2,378  2,402  2,423  2,467  2,476  2,489  2,503  2,528
 Sky Go
 Extra         -      -      -      -      -     44    166    385    643
 Broadband 3,651  3,863  4,001  4,103  4,235  4,387  4,906  5,017  5,127
 Telephony 3,407  3,627  3,768  3,888  4,022  4,208  4,501  4,652  4,792
 Line
 Rental    3,106  3,376  3,563  3,708  3,870  4,056  4,364  4,525  4,676

New
connected
TV         2,549  3,211  3,735  4,023  4,781  5,546  5,966  6,642  7,666
services
 Connected
 HD boxes    442    604    995  1,255  1,715  2,284  2,709  3,351  4,352
 Sky Go
 unique
 users     2,107  2,607  2,740  2,768  3,066  3,262  3,257  3,291  3,314

Total
products
and
services  29,379 30,945 32,100 32,921 34,294 35,774 37,600 39,076 40,973

Other
metrics:
Retail
customers 10,471 10,549 10,606 10,654 10,742 10,812 11,153 11,224 11,330
Wholesale
customers  3,629  3,657  3,672  3,714  3,751  3,801  3,677  3,617  3,624
Total
customers 14,100 14,206 14,278 14,368 14,493 14,613 14,830 14,841 14,954

ARPU
(GBP)(1)  GBP536 GBP538 GBP541 GBP542 GBP558 GBP567 GBP569 GBP559 GBP570

Triple-
play %       29%    31%    32%    33%    33%    34%    35%    36%    36%
Churn       9.6%  10.1%   9.9%  10.9%  10.3%  10.8%  10.9%  11.0%  10.8%

Fixed
Network
Metrics
On-net
base       3,403  3,636  3,778  3,882  4,031  4,190  4,696  4,826  4,921
 MPF base  2,146  2,423  2,588  2,762  2,926  3,159  3,359  3,504  3,659
 SMPF base 1,257  1,213  1,190  1,120  1,105  1,031  1,337  1,322  1,262

 MPF %       63%    67%    69%    71%    73%    75%    72%    73%    74%
 SMPF %      37%    33%    31%    29%    27%    25%    28%    27%    26%
Off-net base 248    227    223    221    204    197    210    191    206

Total
Broadband  3,651  3,863  4,001  4,103  4,235  4,387  4,906  5,017  5,127

On-net %     93%    94%    94%    95%    95%    96%    96%    96%    96%

Total no.
of LLU
exchanges  1,907  1,964  1,965  2,036  2,108  2,202  2,323  2,354  2,355

(1) Calculations have been restated to exclude revenue earned from
    retailing the ESPN channel.

Related Party Transactions

Details of transactions with related parties during the six month
period to 31 December 2013 are provided in Appendix 1.

Principal risks and uncertainties

A summary of the Group's principal risks and uncertainties is provided
in Appendix 3.

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 names and functions of the directors of British Sky Broadcasting
Group plc can be found on pages 34-35 of the 2013 Annual Report.

By order of the Board
Jeremy Darroch
Chief Executive Officer


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 from the related IFRS measures.

Forward looking statements

This document contains certain forward looking statements with respect
to the Group's financial condition, results of operations and business,
and our strategy, plans and objectives for the Group. 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, the potential for growth of
free-to-air and pay television, fixed line telephony, broadband and
bandwidth requirements, advertising growth, DTH and OTT customer
growth, On Demand, NOW TV, Sky Go, Sky Go Extra, Sky+HD and other
services penetration, revenue, administration costs and other costs,
advertising growth, churn, profit, cash flow, products and our
broadband network footprint, content, wholesale, marketing and capital
expenditure and proposals for returning capital to shareholders.

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 Appendix 3 -"Principal
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.

Glossary of Terms

A glossary of terms is included within the Annual Report and on our
corporate investor relations web page at http://corporate.sky.com/
investors/glossary. Copies of the Annual Report are available from the
British Sky Broadcasting Group plc web page at www.sky.com/corporate
and in hard copy from the Company Secretary, British Sky Broadcasting
Group plc, Grant Way, Isleworth, Middlesex TW7 5QD.


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the associated PDF document.

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