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 July 2007
27 July 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
EXHIBIT INDEX
Exhibit
EXHIBIT NO. 1 Press release of British Sky Broadcasting Group plc
announcing Accounting Press Release released on
27 July 2007
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.
Consolidated financial statements
Consolidated Income Statement for the year ended 30 June 2007
Notes 2007 2006
GBPm GBPm
-----------------------------------------------------------------------
Revenue 1 4,551 4,148
Operating expense 2 (3,736) (3,271)
Operating profit 815 877
-----------------------------------------------------------------------
Share of results of joint ventures and
associates 10 12 12
Investment income 3 46 52
Finance costs 3 (149) (143)
Profit before tax 724 798
-----------------------------------------------------------------------
Taxation 4 (225) (247)
Profit for the year 499 551
-----------------------------------------------------------------------
Earnings per share from profit for the
year (in pence)
Basic 5 28.4p 30.2p
Diluted 5 28.2p 30.1p
-----------------------------------------------------------------------
Consolidated Income Statement for the quarter ended 30 June 2007
2007 2006
Three months Three
ended months
30 June ended 30
GBPm June
(unaudited) GBPm
(unaudited)
-------------------------------------------------------------------------
Revenue 1,175 1,069
Operating expense (973) (852)
Operating profit 202 217
-------------------------------------------------------------------------
Share of results of joint ventures
and associates 3 3
Investment income 4 15
Finance costs (41) (46)
Profit before tax 168 189
-------------------------------------------------------------------------
Taxation (57) (63)
Profit for the quarter 111 126
-------------------------------------------------------------------------
Earnings per share from profit for the
quarter (in pence)
Basic 6.4p 7.0p
Diluted 6.3p 7.0p
-------------------------------------------------------------------------
Consolidated Statement of Recognised Income and Expense for the year ended
30 June 2007
2007 2006
GBPm GBPm
----------------------------------------------------------------------
Profit for the year 499 551
Loss on available-for-sale investments (151) -
Net movements in hedging reserve
Cash flow hedges 39 (54)
Tax on cash flow hedges (12) 16
27 (38)
Net losses recognised directly in equity (124) (38)
----------------------------------------------------------------------
Total recognised income and expense for the
year 375 513
----------------------------------------------------------------------
Consolidated Balance Sheet as at 30 June 2007
Notes 2007 2006
GBPm GBPm
----------------------------------------------------------------------
Non-current assets
Goodwill 7 741 637
Intangible assets 8 261 218
Property, plant and equipment 9 670 519
Investments in joint ventures and
associates 10 34 28
Available-for-sale investments 11 797 2
Deferred tax assets 12 54 100
2,557 1,504
----------------------------------------------------------------------
Current assets
Inventories 13 384 324
Trade and other receivables 14 524 489
Short-term deposits 15 647
Cash and cash equivalents 435 816
Derivative financial assets 5 7
1,363 2,283
----------------------------------------------------------------------
Total assets 3,920 3,787
----------------------------------------------------------------------
Current liabilities
Borrowings 17 16 163
Trade and other payables 15 1,295 1,247
Current tax liabilities 144 82
Provisions 16 8 6
Derivative financial liabilities 36 49
1,499 1,547
----------------------------------------------------------------------
Non-current liabilities
Borrowings 17 2,014 1,825
Other payables 17 84 66
Provisions 16 18 19
Derivative financial liabilities 258 209
2,374 2,119
----------------------------------------------------------------------
Total liabilities 3,873 3,666
----------------------------------------------------------------------
Shareholders' equity 19 47 121
----------------------------------------------------------------------
Total liabilities and shareholders'
equity 3,920 3,787
----------------------------------------------------------------------
Consolidated Cash Flow Statement for the year ended 30 June 2007
2007 2006
GBPm GBPm
-----------------------------------------------------------------------
Cash flows from operating activities
Cash generated from operations 1,007 1,004
Interest received 46 43
Taxation paid (128) (172)
Net cash from operating activities 925 875
-----------------------------------------------------------------------
Cash flows from investing activities
Dividends received from joint ventures and
associates 9 7
Net funding to joint ventures and associates (3) (2)
Purchase of property, plant and equipment (292) (169)
Purchase of intangible assets (64) (43)
Purchase of available-for-sale investments (947) -
Purchase of subsidiaries (net of cash and cash
equivalents purchased) (104) (209)
Decrease (increase) in short-term deposits 632 (453)
Net cash used in investing activities (769) (869)
-----------------------------------------------------------------------
Cash flows from financing activities
Proceeds from borrowings 295 1,014
Repayment of borrowings (192) -
Proceeds from disposal of shares in Employee Share
Ownership Plan ("ESOP") 37 13
Purchase of own shares for ESOP (76) (17)
Purchase of own shares for cancellation (214) (408)
Interest paid (154) (105)
Dividends paid to shareholders (233) (191)
Net cash (used in) from financing activities (537) 306
-----------------------------------------------------------------------
Effect of foreign exchange rate movements - 1
Net (decrease) increase in cash and cash
equivalents (381) 313
-----------------------------------------------------------------------
Cash and cash equivalents at the beginning of the
year 816 503
Cash and cash equivalents at the end of the year 435 816
-----------------------------------------------------------------------
Notes to the consolidated financial statements
The financial information set out in this preliminary announcement does not
constitute statutory financial statements for the years ended 30 June 2007 or
2006, for the purpose of the Companies Act 1985, but it is derived from those
financial statements. Statutory financial statements for 2006 have been filed
with the Registrar of Companies and those for 2007 will be filed prior to the
Group's next annual general meeting. 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 preliminary announcement has
been prepared in accordance with International Financial Reporting Standards as
adopted for use in the European Union ("IFRS"), this announcement does not
itself contain sufficient information to comply with IFRS. The accounting
policies applied in preparing this financial information are consistent with the
Group's financial statements for the year ended 30 June 2006, with the exception
of a new accounting policy relating to derivatives that qualify for fair value
hedge accounting.
1. Revenue
2007 2006
GBPm GBPm
-----------------------------------------------------------------------
Retail subscription 3,406 3,157
Wholesale subscription 208 224
Advertising 352 342
Sky Bet 47 37
Installation, hardware and service 212 131
Other 326 257
4,551 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 Sky Active, Sky Card, Sky Mobile TV, technical platform
services and Easynet Enterprise.
2. Operating expense
2007 2006
GBPm GBPm
-----------------------------------------------------------------------
Programming(i) 1,539 1,599
Transmission and related functions 402 234
Marketing 734 622
Subscriber management 618 468
Administration(ii) 443 348
3,736 3,271
-----------------------------------------------------------------------
(i) In the year ended 30 June 2007, the Group recognised a GBP65 million credit,
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 consolidated financial statements.
(ii) In the year ended 30 June 2007, the Group recognised a GBP16 million
expense relating to the legal costs incurred to date on the Group's claim
against EDS (the information and technology solutions provider).
3. Investment income and finance costs
2007 2006
GBPm GBPm
-----------------------------------------------------------------------
Investment income
Cash, cash equivalents and short-term deposits 33 52
Dividends receivable from available-for-sale investments 13 -
46 52
-----------------------------------------------------------------------
2007 2006
GBPm GBPm
-----------------------------------------------------------------------
Finance costs
- Interest payable and similar charges
GBP1 billion Revolving Credit Facility (12) (2)
Guaranteed Notes (135) (123)
Finance lease interest (8) (4)
(155) (129)
-----------------------------------------------------------------------
- Other finance income (expense)
Remeasurement of borrowings and borrowings-related
derivative financial instruments (i) - (10)
Remeasurement of programming-related derivative
financial instruments (i) 6 (4)
6 (14)
-----------------------------------------------------------------------
(149) (143)
-----------------------------------------------------------------------
(i) Not qualifying for hedge accounting
4. Taxation
Taxation recognised in the income statement
2007 2006
GBPm GBPm
-----------------------------------------------------------------------
Current tax expense
Current year 204 147
Adjustment in respect of prior years (15) (6)
Total current tax charge 189 141
-----------------------------------------------------------------------
Deferred tax expense
Origination and reversal of temporary differences 22 106
Adjustment in respect of prior years 14 -
Total deferred tax charge 36 106
-----------------------------------------------------------------------
Taxation 225 247
-----------------------------------------------------------------------
5. Earnings per share
The weighted average number of shares for the year was:
2007 2006
Millions Millions
of of
shares shares
------------------------------------------------------------------------
Ordinary shares 1,759 1,830
ESOP trust ordinary shares (4) (3)
Basic shares 1,755 1,827
------------------------------------------------------------------------
Dilutive ordinary shares from
share options 12 5
Diluted shares 1,767 1,832
------------------------------------------------------------------------
Basic and diluted earnings per share are calculated by dividing profit for the
year into the weighted average number of shares for the year. 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.
2007 2006
GBPm GBPm
-----------------------------------------------------------------------
Reconciliation of profit for the year to adjusted profit
for the year
Profit for the year 499 551
Remeasurement of all derivative financial instruments
(not qualifying for hedge accounting) (6) 14
Amount receivable from channel distribution agreement
(note 2) (65) -
Legal costs relating to claim against EDS (note 2) 16 -
Tax effect of above items 17 (4)
Adjusted profit for the year 461 561
-----------------------------------------------------------------------
2007 2006
pence pence
-----------------------------------------------------------------------
Earnings per share from profit for the year
Basic 28.4p 30.2p
Diluted 28.2p 30.1p
Adjusted earnings per share from profit for the year
Basic 26.3p 30.7p
Diluted 26.1p 30.6p
-----------------------------------------------------------------------
6. Dividends
2007 2006
GBPm GBPm
-----------------------------------------------------------------------
Dividends declared and paid during the year
2005 Final dividend paid: 5.00p per ordinary share - 92
2006 Interim dividend paid: 5.50p per ordinary share - 99
2006 Final dividend paid: 6.70p per ordinary share 117 -
2007 Interim dividend paid: 6.60p per ordinary share 116 -
233 191
-----------------------------------------------------------------------
The 2007 final dividend proposed is 8.9p per ordinary share being GBP155
million. The dividend was proposed after the balance date and is therefore not
recognised as a liability as at 30 June 2007.
7. Goodwill
Total
GBPm
-----------------------------------------------------------------------
Carrying value
At 1 July 2005 417
Purchase of Easynet Group Limited 216
Other purchases 4
At 30 June 2006 637
-----------------------------------------------------------------------
Purchase of 365 Media Group plc 77
Other purchases 27
At 30 June 2007 741
-----------------------------------------------------------------------
8. Intangible assets
Other
intangible
Internally assets
generated Other not yet
intangible intangible available
assets assets for use Total
GBPm GBPm GBPm GBPm
------------------------------------------------------------------------
Cost
At 30 June 2006 34 327 30 391
Additions from business
combinations - 24 - 24
Other additions 28 41 22 91
Disposals - (51) - (51)
At 30 June 2007 62 341 52 455
------------------------------------------------------------------------
Amortisation
At 30 June 2006 16 157 - 173
Amortisation for the year 9 63 - 72
Disposals - (51) - (51)
At 30 June 2007 25 169 - 194
------------------------------------------------------------------------
Carrying amounts
At 30 June 2006 18 170 30 218
At 30 June 2007 37 172 52 261
------------------------------------------------------------------------
9. Property, plant and equipment
Equipment, Assets
Land and furniture not yet
freehold Leasehold and available
buildings improvements fittings for use Total
GBPm GBPm GBPm GBPm GBPm
--------------------------------------------------------------------------
Cost
At 30 June 2006 115 53 591 50 809
Additions from business
combination - - 1 - 1
Other additions 5 6 232 27 270
Disposals (1) (19) (93) - (113)
Transfers (14) 24 30 (40) -
At 30 June 2007 105 64 761 37 967
--------------------------------------------------------------------------
Depreciation
At 30 June 2006 13 34 243 - 290
Depreciation 5 4 111 - 120
Disposals (1) (19) (93) - (113)
At 30 June 2007 17 19 261 - 297
--------------------------------------------------------------------------
Carrying amounts
At 30 June 2006 102 19 348 50 519
At 30 June 2007 88 45 500 37 670
--------------------------------------------------------------------------
10. Investments in joint ventures and associates
The movement in joint ventures and associates during the year was as follows:
2007 2006
GBPm GBPm
------------------------------------------------------------------------
Beginning of year
- Share of net assets 28 23
------------------------------------------------------------------------
Movement in net assets
- Funding, net of repayments 3 2
- Dividends received (9) (7)
- Share of profits 12 12
Transfers to subsidiaries - (1)
Movement in other payables - (1)
------------------------------------------------------------------------
End of year
- Share of net assets 34 28
------------------------------------------------------------------------
11. Available-for-sale investments
2007 2006
GBPm GBPm
------------------------------------------------------------------------
Non-current assets
Equity investments 797 2
------------------------------------------------------------------------
On 17 November 2006, the Group acquired 696 million shares in ITV, representing
17.9% of the issued share capital of ITV, for a total consideration of GBP946
million including fees and taxes.
12. Deferred tax
Recognised deferred tax assets
Fixed Share-based Financial
asset Short-term payments Instruments
temporary Tax temporary temporary temporary
differences losses differences differences differences Total
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------------------------------------------------------
At 30 June 2006 26 33 8 11 22 100
(Charge) credit to
income (32) (18) 1 12 1 (36)
Credit (charge) to
equity - - - 5 (12) (7)
Business
combinations (3) - - - - (3)
At 30 June 2007 (9) 15 9 28 11 54
-------------------------------------------------------------------------------
13. Inventories
2007 2006
GBPm GBPm
------------------------------------------------------------------------
Television programme rights 290 277
Set-top boxes and related equipment 84 41
Other inventories 10 6
384 324
------------------------------------------------------------------------
14. Trade and other receivables
2007 2006
GBPm GBPm
------------------------------------------------------------------------
Net trade receivables 204 207
Amounts receivable from joint ventures and associates 8 7
Amounts receivable from other related parties 1 1
Prepayments 175 156
Accrued income 91 107
Other 45 11
524 489
------------------------------------------------------------------------
Included within prepayments is GBP27 million (2006: GBP73 million) which is due
in more than one year.
15. Trade and other payables
2007 2006
GBPm GBPm
------------------------------------------------------------------------
Trade payables 380 352
Amounts owed to joint ventures and associates 3 5
Amounts owed to other related parties 36 31
VAT 97 140
Accruals 468 428
Deferred income 245 246
Other 66 45
1,295 1,247
------------------------------------------------------------------------
16. Provisions
At Provided Utilised At
1 July during during 30 June
2006 the year the year 2007
GBPm GBPm GBPm GBPm
-------------------------------------------------------------------------
Current liabilities
Provision for termination benefits - 3 - 3
Other provisions 6 1 (2) 5
6 4 (2) 8
-------------------------------------------------------------------------
Non-current liabilities
Other provisions 19 2 (3) 18
-------------------------------------------------------------------------
17. Borrowings and non-current other payables
2007 2006
GBPm GBPm
------------------------------------------------------------------------
Current borrowings
Guaranteed Notes - 162
Loan Notes 16 -
Other current borrowings - 1
16 163
------------------------------------------------------------------------
Non-current borrowings
Guaranteed Notes 1,948 1,757
Other non-current borrowings - 1
Obligations under finance leases 66 67
2,014 1,825
------------------------------------------------------------------------
Non-current other payables
Accruals 10 15
Deferred income 74 51
84 66
------------------------------------------------------------------------
18. Share capital
2007 2006
GBPm GBPm
------------------------------------------------------------------------
Authorised ordinary shares of 50p
3,000,000,000 (2006: 3,000,000,000) 1,500 1,500
------------------------------------------------------------------------
Allotted, called-up and fully paid
1,752,842,599 (2006: 1,791,077,599) 876 896
------------------------------------------------------------------------
2007 2006
Number of Number of
ordinary shares ordinary shares
--------------------------------------------------------------------------
Allotted and fully paid during the year
Beginning of year 1,791,077,599 1,867,523,599
Shares repurchased and subsequently
cancelled (38,235,000) (76,446,000)
End of year 1,752,842,599 1,791,077,599
--------------------------------------------------------------------------
19. Reconciliation of shareholders' equity
Available- Total
Share Share ESOP Hedging for-sale Other Retained shareholders'
capital premium reserve reserve reserve reserves earnings equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------------------------------------------------------------------------------
At 30 June 2006 896 1,437 (25) (52) - 311 (2,446) 121
Purchase of own equity
shares for cancellation (20) - - - - 20 (214) (214)
Recognition and transfer
of cash flow hedges - - - 39 - - - 39
Tax on items taken directly
to equity - - - (12) - - 5 (7)
Revaluation of
available-for-sale
investments - - - - (151) - - (151)
Share-based payment - - (29) - - - 22 (7)
Profit for the year - - - - - - 499 499
Dividends - - - - - - (233) (233)
At 30 June 2007 876 1,437 (54) (25) (151) 331 (2,367) 47
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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: 27 July 2007 By: /s/ Dave Gormley
Dave Gormley
Company Secretary