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 January 2007
31 January 2007
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 Release released on
31 January 2007
Consolidated Income Statement for the half year ended 31 December 2006
2006/07 2005/06 2005/06
Half year Half year Full year
GBP million GBP million GBP million
Notes (unaudited) (unaudited) (audited)
------------------------------------------------------------------------------------------
Revenue 2 2,220 2,016 4,148
Operating expense 3 (1,825) (1,602) (3,271)
Operating profit 395 414 877
------------------------------------------------------------------------------------------
Share of results of joint ventures and
associates 6 7 12
Investment income 24 20 52
Finance costs (69) (51) (143)
Profit before tax 356 390 798
------------------------------------------------------------------------------------------
Taxation (110) (116) (247)
Profit for the period 246 274 551
------------------------------------------------------------------------------------------
Earnings per share from profit for the
period (in pence)
Basic 4 14.0p 14.9p 30.2p
Diluted 4 14.0p 14.9p 30.1p
------------------------------------------------------------------------------------------
Consolidated Statement of Recognised Income and Expense for the half year ended
31 December 2006
2006/07 2005/06 2005/06
Half year Half year Full year
GBP million GBP million GBP million
(unaudited) (unaudited) (audited)
------------------------------------------------------------------------------------------
Profit for the period 246 274 551
------------------------------------------------------------------------------------------
Loss on available for sale investments (207) - -
------------------------------------------------------------------------------------------
Net movement in hedging reserve
Cash flow hedges 21 1 (54)
Tax on cash flow hedges (6) - 16
15 1 (38)
------------------------------------------------------------------------------------------
Total recognised income and expense for the 54 275 513
period
------------------------------------------------------------------------------------------
Consolidated Income Statement for the three months ended 31 December 2006
2006/07 2005/06
Three months Three months
ended 31 December ended 31 December
GBP million GBP million
(unaudited) (unaudited)
-------------------------------------------------------------------------------
Revenue 1,149 1,050
Operating expense (934) (851)
Operating profit 215 199
-------------------------------------------------------------------------------
Share of results from joint 4 5
ventures and associates
Investment income 10 12
Finance costs (39) (26)
Profit before tax 190 190
-------------------------------------------------------------------------------
Taxation (60) (56)
Profit for the quarter 130 134
-------------------------------------------------------------------------------
Earnings per share from profit for
the quarter (in pence)
Basic and diluted 7.4 7.3
-------------------------------------------------------------------------------
Consolidated Balance Sheet as at 31 December 2006
31 December 31 December 30 June
2006 2005 2006
GBP million GBP million GBP million
Notes (unaudited) (unaudited) (audited)
-------------------------------------------------------------------------------
Non-current assets
Goodwill 659 417 637
Intangible assets 209 221 218
Property, plant and equipment 593 349 519
Investments in joint ventures and 31 29 28
associates
Available for sale investments 771 52 2
Deferred tax assets 79 79 100
Derivative financial assets - 13 -
2,342 1,160 1,504
-------------------------------------------------------------------------------
Current assets
Inventories 609 568 324
Trade and other receivables 568 389 489
Short-term deposits 202 764 647
Cash and cash equivalents 402 889 816
Derivative financial assets 6 29 7
1,787 2,639 2,283
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Total assets 4,129 3,799 3,787
-------------------------------------------------------------------------------
Current liabilities
Borrowings 548 174 163
Trade and other payables 1,469 1,376 1,247
Current tax liabilities 140 116 82
Provisions 4 6 6
Derivative financial liabilities 36 26 49
2,197 1,698 1,547
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Non-current liabilities
Borrowings 1,751 1,854 1,825
Other payables 63 23 66
Provisions 18 - 19
Derivative financial liabilities 245 80 209
2,077 1,957 2,119
-------------------------------------------------------------------------------
Total liabilities 4,274 3,655 3,666
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Shareholders' (deficit) equity 6 (145) 144 121
-------------------------------------------------------------------------------
Total liabilities and 4,129 3,799 3,787
shareholders' (deficit) equity
-------------------------------------------------------------------------------
Consolidated Cash Flow Statement for the half year ended 31 December 2006
2006/07 2005/06 2005/06
Half year Half year Full year
GBP million GBP million GBP million
Notes (unaudited) (unaudited) (audited)
-----------------------------------------------------------------------------------------
Cash flows from operating activities
Cash generated from operations 365 514 1,004
Interest received 32 16 43
Taxation paid (39) (76) (172)
Net cash from operating activities 358 454 875
-----------------------------------------------------------------------------------------
Cash flows from investing activities
Dividends received from joint ventures and 4 3 7
associates
Net funding to joint ventures and - (1) (2)
associates
Purchase of property, plant and equipment (131) (58) (169)
Purchase of intangible assets (27) (36) (43)
Purchase of available-for-sale investments (975) (51) -
Decrease (increase) in short-term deposits 445 (570) (453)
Purchase of subsidiaries (net of cash and (19) - (209)
cash equivalents purchased)
Net cash used in investing activities (703) (713) (869)
-----------------------------------------------------------------------------------------
Cash flows from financing activities
Proceeds from borrowings 550 1,014 1,014
Repayment of borrowings (191) - -
Proceeds from disposal of shares in 8 7 13
Employee Share Ownership Plan ("ESOP")
Purchase of own shares for ESOP (13) - (17)
Purchase of own shares for cancellation (214) (240) (408)
Interest paid (92) (44) (105)
Dividends paid to shareholders (117) (92) (191)
Net cash (used in) from financing (69) 645 306
activities
-----------------------------------------------------------------------------------------
Effect of foreign exchange rate movements - - 1
Net (decrease) increase in cash and cash (414) 386 313
equivalents
-----------------------------------------------------------------------------------------
Cash and cash equivalents at the beginning 816 503 503
of the period
Cash and cash equivalents at the end of 402 889 816
the period
-----------------------------------------------------------------------------------------
Notes to the 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 years ended 31 December 2006 or
2005, for the purpose of the Companies Act 1985. Statutory financial statements
for the year ended 30 June 2006 have been filed with 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 International Financial Reporting Standards
("IFRS"), this announcement does not itself contain sufficient information to
comply with IFRS.
2 Revenue
2006/07 2005/06 2005/06
Half year Half year Full year
GBP million GBP million GBP
million
(unaudited) (unaudited) (audited)
--------------------------------------------------------------------------------
Retail subscription 1,638 1,557 3,157
Wholesale subscription 109 112 224
Advertising 171 171 342
Sky Bet 20 16 37
Installation, hardware and 119 70 131
service
Other 163 90 257
2,220 2,016 4,148
--------------------------------------------------------------------------------
To provide a more relevant presentation, management has chosen to re-analyse the
revenue categories from those previously reported. Other revenue now principally
includes income from Easynet Enterprise, Sky Active and technical platform
service revenue.
3 Operating expense
2006/07 2005/06 2005/06
Half year Half year Full year
GBP million GBP million GBP
million
(unaudited) (unaudited) (audited)
--------------------------------------------------------------------------------
Programming 748 810 1,599
Transmission and related functions 181 87 234
Marketing 375 332 622
Subscriber management 313 219 468
Administration 208 154 348
1,825 1,602 3,271
--------------------------------------------------------------------------------
Included within programming for the 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 2006 is GBP6
million of expense relating to the legal costs of the Group's claim against EDS
(an information and technology solutions provider (see note 8b)).
4 Earnings per share
2006/07 2005/06 2005/06
Half year Half year Full year
Millions of Millions of Millions
shares shares of shares
(unaudited) (unaudited) (audited)
--------------------------------------------------------------------------------
Weighted average number of shares
Ordinary shares 1,765 1,849 1,830
ESOP trust ordinary shares (3) (4) (3)
Basic shares 1,762 1,845 1,827
--------------------------------------------------------------------------------
Dilutive ordinary shares from share options 1 2 5
Diluted shares 1,763 1,847 1,832
--------------------------------------------------------------------------------
The calculation of diluted earnings per share excludes 21 million share options
(2005/06: half year 34 million; full year 37 million), which could potentially
dilute earnings per share in the future. These options do not currently have a
dilutive effect as the exercise price of the options exceeds the average market
price of ordinary shares during the period.
Basic and diluted earnings per share is calculated by dividing 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 believes should be
separately identified to help explain underlying performance.
2006/07 2005/06 2005/06
Half year Half year Full year
GBP million GBP million GBP million
(unaudited) (unaudited) (audited)
--------------------------------------------------------------------------------
Reconciliation from profit for the period
to adjusted profit for the period
Profit for the period 246 274 551
Remeasurement of all derivative financial
instruments (not qualifying for hedge
accounting) (8) (4) 14
Amount receivable from channel distribution
agreement (see note 2) (65) - -
Legal costs relating to claim against EDS
(see note 3) 6 - -
Tax effect of above items 20 1 (4)
Adjusted profit for the period 199 271 561
--------------------------------------------------------------------------------
5 Dividends
2006/07 2005/06 2005/06
Half year Half year Full year
GBP million GBP million GBP million
(unaudited) (unaudited) (audited)
--------------------------------------------------------------------------------
2005 Final dividend paid: 5.00p per ordinary
share - 92 92
2006 Interim dividend paid: 5.50p per
ordinary share - - 99
2006 Final dividend paid: 6.70p per ordinary
share 117 - -
117 92 191
--------------------------------------------------------------------------------
Dividends proposed after the balance sheet
date and not recognised as a liability
2007 Interim dividend proposed: 6.6p per 115 - -
ordinary share
--------------------------------------------------------------------------------
6 Reconciliation of movement in shareholders' (deficit) equity
Total
Share Share ESOP Hedging Available for Other Retained shareholders'
capital premium reserve reserve sale reserve reserves earnings (deficit) equity
GBP GBP GBP GBP GBP GBP GBP GBP
million million million million million million million million
-----------------------------------------------------------------------------------------------------------------------------
At 1 July 2005 934 1,437 (32) (14) - 273 (2,411) 187
Purchase of own shares for
cancellation (23) - - - - 23 (240) (240)
Recognition and transfer
of cash flow hedges - - - 1 - - - 1
Tax on items taken directly
to equity - - - - - - (2) (2)
Share-based payment - - 15 - - - 1 16
Profit for the period - - - - - - 274 274
Dividends - - - - - - (92) (92)
At 1 January 2006 911 1,437 (17) (13) - 296 (2,470) 144
-----------------------------------------------------------------------------------------------------------------------------
Purchase of own shares for
cancellation (15) - - - - 15 (168) (168)
Recognition and transfer
of cash flow hedges - - - (55) - - - (55)
Tax on items taken directly
to equity - - - 16 - - 4 20
Share-based payment - - (8) - - - 10 2
Profit for the period - - - - - - 277 277
Dividends - - - - - - (99) (99)
At 1 July 2006 896 1,437 (25) (52) - 311 (2,446) 121
-----------------------------------------------------------------------------------------------------------------------------
Purchase of own shares for
cancellation (19) - - - - 19 (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 investments - - - - (207) - - (207)
Share-based payment - - 1 - - - 11 12
Profit for the period - - - - - - 246 246
Dividends - - - - - - (117) (117)
At 31 December 2006 877 1,437 (24) (37) (207) 330 (2,521) (145)
-----------------------------------------------------------------------------------------------------------------------------
The periods from 1 July to 31 December are unaudited.
7 Notes to the consolidated cash flow statement
a) Reconciliation of profit before taxation to cash generated from operations
2006/07 2005/06 2005/06
Half year Half year Full year
GBP million GBP million GBP million
(unaudited) (unaudited) (audited)
--------------------------------------------------------------------------
Profit before tax 356 390 798
Depreciation of property, plant and 58 36 89
equipment
Amortisation of intangible assets 33 20 51
Net finance costs 45 31 91
Share of results of joint ventures and (6) (7) (12)
associates
Increase in trade and other (118) (54) (102)
receivables
(Increase) decrease in inventories (294) (211) 31
Increase in trade and other payables 289 312 55
Decrease in provisions (3) (7) (13)
Decrease in derivative financial
instruments 5 4 16
Cash generated from operations 365 514 1,004
--------------------------------------------------------------------------
8 Other matters
a) Contingent liabilities
The Group has contingent liabilities by virtue of its investments in joint
ventures and associates that are unlimited companies, or partnerships, which
include The History Channel (U.K.), Paramount U.K. and NGC-U.K.. The Group's
share of contingent liabilities of its joint ventures and associates incurred
jointly with the other investors is nil (2005/06: half year nil; full year nil).
The Directors do not expect any material loss to arise from the above contingent
liabilities.
b) Contingent assets
The Group has served a claim 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.
c) Changes in estimates
There have been no material changes in estimates of amounts reported in the six
months ended 31 December 2006 or in the year ended 30 June 2006.
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: 31 January 2007 By: /s/ Dave Gormley
Dave Gormley
Company Secretary