Foxtel who currently have a monopoly in the pay TV market, has announced a 15.5% growth in earnings to $551m for the year to 30 June 2011. Despite a tough market revenue was up 6% to $2.1B.The Company that is currently lobbying the Australian Competition and Consumer Commission in an effort to get approval for their $2.2 Billion dollar acquisition of regional pay TV operator Austar said that subscribers grew by 2.5% with total subscribers reaching over 1.65m.
Foxtel said that early 75% of subscribers now take the Pay TV Companies iQ service with almost one-third of subscribers taking Foxtel’s HD services.
Foxtel earnings before interest, tax, depreciation and amortisation grew by 15.5% to $551m (from $477m last year) while profit before tax grew at 26% to just over $200m. Foxtel’s ebit grew by 21% to just under $250m.
In a statement issued this morning Foxtel said that the difficult consumer environment continued throughout the 2010/11 year with subscriber growth impacted by negative consumer confidence, increased savings rates and the ongoing impact of competition from the Freeview services and new online offerings.
Despite this the Company grew as direct subscriber base increased by 2.5% to 1.58m as of the 30th June 2011.
They said that customer retention improved significantly over the prior year with full year churn of 12.5% in 2010/11, down from 13.5% in 2009/10 representing the best retention performance in 4 years. Total subscriber households, including wholesale, finished at 1.652m.
Foxtel’s Chief Executive Mr Kim Williams AM acknowledged the difficult environment saying:
“While our financial performance for the year was solid, subscriber growth remains testing as a result of the ongoing reluctance of consumers to commit to new discretionary spend whilst the increased competition from Freeview and broadband delivered video entertainment services has exacerbated the acquisition challenge. Our existing subscribers continue to value our service highly as reflected through increased uptake of our iQ, High Definition and multi-room services while churning at a significantly lower rate than in recent years.”
“We are very confident that our ground breaking AFL deal, our continued innovation in content and technology and our unwavering focus on our service to customers will lead to refreshed growth in the year ahead” Mr Williams said.
Foxtel announced on 11 July it had entered into definitive transaction agreements with AUSTAR and Liberty Global to acquire the Austar business. The transaction agreements are subject to a number of conditions, including regulatory approvals, minority shareholder and court approvals.
The ACCC released a Statement of Issues on 22nd July, requesting further submissions by 11th August. Foxtel continues to engage constructively with the ACCC as part of its ongoing process.
