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 February 2005
2 February 2005
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 Excerpt from the announcement made by British Sky Broadcasting
Group plc of its financial results for the period ended
31 December 2004
British Sky Broadcasting Group plc
Consolidated Profit and Loss Account for the half year ended 31 December 2004
-----------------------------------------------------------------------------------------------------------------------------------
Before Before
goodwill Goodwill 2004/05 goodwill Goodwill 2003/04 2003/04
and and Half and and Half Full
exceptional exceptional year exceptional exceptional year year
items items Total items items Total Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Notes (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)(unaudited)(audited)
-----------------------------------------------------------------------------------------------------------------------------------
Turnover: Group and share of joint
ventures' turnover 1,983 - 1,983 1,809 - 1,809 3,738
Less: share of joint ventures' turnover (38) - (38) (43) - (43) (82)
Group turnover 2 1,945 - 1,945 1,766 - 1,766 3,656
------------------------------------------------------------------------------------------------------------------------------------
Operating expenses, net 3 (1,591) (57) (1,648) (1,483) (58) (1,541) (3,175)
------------------------------------------------------------------------------------------------------------------------------------
Operating profit 354 (57) 297 283 (58) 225 481
------------------------------------------------------------------------------------------------------------------------------------
Share of joint ventures' and associates'
operating results 8 - 8 (5) - (5) 5
Loss on disposal of investments in joint
ventures 4,9 - (23) (23) - - - -
Profit on disposal of fixed asset
investments 4,9 - - - - 2 2 51
Amounts written back to fixed asset
investments, net 4,9 - - - - 24 24 24
Profit on ordinary activities before
interest and taxation 362 (80) 282 278 (32) 246 561
------------------------------------------------------------------------------------------------------------------------------------
Interest receivable and similar income 15 - 15 3 - 3 10
Interest payable and similar charges (47) - (47) (45) - (45) (91)
Profit on ordinary activities before
taxation 330 (80) 250 236 (32) 204 480
------------------------------------------------------------------------------------------------------------------------------------
Tax on profit on ordinary activities 5 (96) - (96) (74) - (74) (158)
Profit on ordinary activities after taxation 234 (80) 154 162 (32) 130 322
------------------------------------------------------------------------------------------------------------------------------------
Equity dividends 6 (77) (53) (116)
Retained profit for the period 10 77 77 206
------------------------------------------------------------------------------------------------------------------------------------
Earnings per share - basic 7 8.0p 6.7p 16.6p
Earnings per share - diluted 7 7.9p 6.7p 16.6p
------------------------------------------------------------------------------------------------------------------------------------
All results relate to continuing operations.
There were no recognised gains or losses in either period other than those
included within the profit and loss account.
The accompanying notes are an integral part of this consolidated profit and loss
account.
Consolidated Profit and Loss Account for the three months ended 31 December 2004
------------------------------------------------------------------------------------------------------------------------------
Before Three months Before Three
goodwill Goodwill ended 31 goodwill Goodwill months
and and December and and ended 31
exceptional exceptional 2004 exceptionalexceptional December 2003
items items Total items items Total
GBPm GBPm GBPm GBPm GBPm GBPm
(unaudited) (unaudited) (unaudited) (unaudited)(unaudited) (unaudited)
------------------------------------------------------------------------------------------------------------------------------
Turnover: Group and share of joint ventures'
turnover 1,024 - 1,024 938 - 938
Less: share of joint ventures' turnover (19) - (19) (22) - (22)
Group turnover 1,005 - 1,005 916 - 916
------------------------------------------------------------------------------------------------------------------------------
Operating expenses, net (841) (28) (869) (784) (29) (813)
------------------------------------------------------------------------------------------------------------------------------
Operating profit 164 (28) 136 132 (29) 103
------------------------------------------------------------------------------------------------------------------------------
Share of joint ventures' and associates'
operating results 7 - 7 (8) - (8)
Loss on disposal of investments in joint ventures - (23) (23) - - -
Profit on disposal of fixed asset investments - - - - 2 2
Amounts written off fixed asset investments - - - - (1) (1)
Profit on ordinary activities before interest
and taxation 171 (51) 120 124 (28) 96
------------------------------------------------------------------------------------------------------------------------------
Interest receivable and similar income 8 - 8 2 - 2
Interest payable and similar charges (25) - (25) (21) - (21)
Profit on ordinary activities before taxation 154 (51) 103 105 (28) 77
------------------------------------------------------------------------------------------------------------------------------
Tax on profit on ordinary activities (42) - (42) (37) - (37)
Profit on ordinary activities after taxation 112 (51) 61 68 (28) 40
------------------------------------------------------------------------------------------------------------------------------
Equity dividends (77) (53)
Retained loss for the period (16) (13)
------------------------------------------------------------------------------------------------------------------------------
Earnings per share - basic 3.1p 2.1p
Earnings per share - diluted 3.1p 2.1p
------------------------------------------------------------------------------------------------------------------------------
Consolidated Balance Sheet at 31 December 2004
-----------------------------------------------------------------------------------------------------------------------------
31 December 31 December 30 June
2004 2003 2004
GBPm GBPm GBPm
Notes (unaudited) (unaudited) (audited)
-----------------------------------------------------------------------------------------------------------------------------
Fixed assets
Intangible assets 8 360 478 417
Tangible assets 451 346 376
Investments 9 27 37 35
838 861 828
----------------------------------------------------------------------------------------------------------------------------
Current assets
Stocks 627 662 375
Debtors: Amounts falling due within one year
- deferred tax assets 45 50 49
- other 339 393 321
384 443 370
----------------------------------------------------------------------------------------------------------------------------
Debtors: Amounts falling due after more than one year
- deferred tax assets 76 128 102
- other 36 61 42
112 189 144
----------------------------------------------------------------------------------------------------------------------------
Cash and liquid resources
- current asset investments - - 173
- cash at bank and in hand 707 318 474
707 318 647
----------------------------------------------------------------------------------------------------------------------------
1,830 1,612 1,536
----------------------------------------------------------------------------------------------------------------------------
Creditors: Amounts falling due within one year
- other creditors (1,481) (1,399) (1,170)
----------------------------------------------------------------------------------------------------------------------------
Net current assets 349 213 366
----------------------------------------------------------------------------------------------------------------------------
Total assets less current liabilities 1,187 1,074 1,194
----------------------------------------------------------------------------------------------------------------------------
Creditors: Amounts falling due after more than one year
- long-term borrowings (1,076) (1,077) (1,076)
- other creditors (27) (24) (28)
(1,103) (1,101) (1,104)
----------------------------------------------------------------------------------------------------------------------------
Provisions for liabilities and charges (1) - -
83 (27) 90
----------------------------------------------------------------------------------------------------------------------------
Capital and reserves - equity
Called-up share capital 10 960 970 971
Share premium 10 1,437 1,428 1,437
ESOP reserve 10 (23) (9) (30)
Merger reserve 10 186 262 222
Special reserve 10 14 14 14
Capital redemption reserve 10 11 - -
Profit and loss account 10 (2,502) (2,692) (2,524)
Shareholders' funds (deficit) 10 83 (27) 90
----------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of this consolidated balance sheet.
Consolidated Cash Flow Statement for the half year ended 31 December 2004
-----------------------------------------------------------------------------------------------------------------------------
2004/05 2003/04 2003/04
Half year Half year Full year
GBPm GBPm GBPm
Notes (unaudited) (unaudited) (audited)
-----------------------------------------------------------------------------------------------------------------------------
Net cash inflow from operating activities 11a 407 401 882
Dividends received from joint ventures 7 3 4
-----------------------------------------------------------------------------------------------------------------------------
Returns on investments and servicing of finance
Interest received and similar income 17 3 7
Interest paid and similar charges (49) (51) (89)
Net cash outflow from returns on investments and servicing of finance (32) (48) (82)
-----------------------------------------------------------------------------------------------------------------------------
Taxation
UK corporation tax paid (25) (21) (55)
Consortium relief paid (3) (3) (3)
Net cash outflow from taxation (28) (24) (58)
-----------------------------------------------------------------------------------------------------------------------------
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (123) (65) (132)
Receipts from sales of fixed asset investments - 68 116
Net cash (outflow) inflow from capital expenditure and financial
investment (123) 3 (16)
-----------------------------------------------------------------------------------------------------------------------------
Acquisitions and disposals
Funding to joint ventures and associates (4) (2) (5)
Repayments of funding from joint ventures and associates 6 3 6
Receipts from sale of investments in joint ventures 14 - -
Net cash inflow from acquisitions and disposals 16 1 1
-----------------------------------------------------------------------------------------------------------------------------
Equity dividends paid (63) - (53)
-----------------------------------------------------------------------------------------------------------------------------
Net cash inflow before management of liquid resources and financing 184 336 678
-----------------------------------------------------------------------------------------------------------------------------
Management of liquid resources 79 (175) (511)
-----------------------------------------------------------------------------------------------------------------------------
Financing
Proceeds from issue of Ordinary Shares 2 10 20
Purchase of own shares for Employee Share Ownership Plan - - (22)
Share buy-back (128) - -
Capital element of finance lease payments - - (1)
Net decrease in debt due after more than one year 11b - (75) (75)
Net cash outflow from financing (126) (65) (78)
-----------------------------------------------------------------------------------------------------------------------------
Increase in cash 11b 137 96 89
-----------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of this consolidated cash flow
statement.
Notes to Financial Statements
1 Basis of preparation
The interim accounts for the half year ended 31 December 2004 have been prepared
in accordance with accounting policies consistent with those applied in the
accounts for the year ended 30 June 2004, which were approved by the Directors
on 3 August 2004. The interim accounts for the six months ended 31 December 2004
do not constitute statutory accounts and are unaudited, but have been formally
reviewed by Deloitte & Touche LLP. Their report is not modified in any respect.
The interim accounts were approved by the Board on 1 February 2005.
The financial information for the 2003/04 full year is extracted from the
financial statements for that year which have been filed with the Registrar of
Companies. The auditors' report on those financial statements was unqualified
and did not contain any statement under section 237(2) or (3) of the Companies
Act 1985.
The Consolidated Profit and Loss Account presentation includes the Group's
results before goodwill and exceptional items in addition to results after
goodwill and exceptional items as this presentation provides an alternative
basis that may be used to assess the ongoing operating performance of the Group.
2 Turnover
The Group's turnover, whilst deriving from one class of business, has been
analysed as follows:
-------------------------------------------------------------------------------------------------------------------------------
2004/05 2003/04 2003/04
Half year Half year Full year
GBPm GBPm GBPm
(unaudited) (unaudited) (audited)
-------------------------------------------------------------------------------------------------------------------------------
DTH subscribers 1,426 1,285 2,660
Cable subscribers 109 103 215
Advertising 159 147 312
Sky Bet (i) 118 91 191
Sky Active (i) 46 56 116
Other 87 84 162
1,945 1,766 3,656
-------------------------------------------------------------------------------------------------------------------------------
(i) Additional detail has been provided with regard to the analysis of
interactive revenues between the Group's betting and games revenues - "Sky
Bet" - and other interactive revenues - "Sky Active" - and the prior year
comparatives have been restated accordingly.
3 Operating expenses, net
------------------------------------------------------------------------------------------------------------------------------
2004/05 2003/04 2003/04
Half year Before Half year Full year
Before goodwill Goodwill Total goodwill Goodwill Total Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
(unaudited) (unaudited)(unaudited) (unaudited) (unaudited)(unaudited) (audited)
-------------------------------------------------------------------------------------------------------------------------------
Programming (i) 808 - 808 783 - 783 1,711
Transmission and related
functions (i) 87 - 87 77 - 77 146
Marketing 258 - 258 215 - 215 396
Subscriber management 193 - 193 191 - 191 371
Administration (ii) 139 57 196 131 58 189 376
Betting 106 - 106 86 - 86 175
1,591 57 1,648 1,483 58 1,541 3,175
-------------------------------------------------------------------------------------------------------------------------------
(i) The amounts shown are net of GBP5 million (2003/04: half year GBP8 million;
full year GBP11 million) receivable from the disposal of programming rights
not acquired for use by the Group, and GBP14 million (2003/04: half year
GBP13 million; full year GBP28 million) receivable in respect of the
provision to third party broadcasters of spare transponder capacity.
(ii) Administration costs for the 2003/04 full year include goodwill
amortisation of GBP119 million.
4 Exceptional items
------------------------------------------------------------------------------------------------------------------------------
2004/05 2003/04 2003/04
Half year Half year Full year
charge credit credit
GBPm GBPm GBPm
(unaudited) (unaudited) (audited)
------------------------------------------------------------------------------------------------------------------------------
Loss on disposal of investments in joint ventures (i) (23) - -
Profit on disposal of fixed asset investments (ii) - 2 51
Amounts written back to fixed asset investments, net (iii) - 24 24
Total non-operating exceptional items (23) 26 75
-------------------------------------------------------------------------------------------------------------------------------
4 Exceptional items (continued)
2004/05
(i) Loss on disposal of investments in joint ventures
On 1 November 2004, the Group sold its 49.5% investment in Granada Sky
Broadcasting for GBP14 million in cash, realising a loss on disposal of GBP23
million. This included the write back of GBP32 million of goodwill which had
previously been written off to reserves, as permitted prior to the
implementation of Financial Reporting Standard ("FRS") 10, "Goodwill and
Intangible Assets". The loss on disposal is a non-operating exceptional item as
defined by FRS 3 "Reporting Financial Performance" ("FRS 3") and is therefore
recorded as an exceptional item below operating profit.
2003/04
(ii) Profit on sale of fixed asset investments
On 7 October 2003, the Group disposed of its listed investment in Manchester
United plc, realising a profit on disposal of GBP2 million. The profit on
disposal is a non-operating exceptional item as defined by FRS 3 and is
therefore recorded as an exceptional item below operating profit.
On 1 March 2004, the Group sold its 20% shareholding in QVC (UK), operator of
QVC - The Shopping Channel, for GBP49 million in cash, realising a profit on
disposal of GBP49 million. The profit on disposal is a non-operating exceptional
item as defined by FRS 3 and is therefore recorded as an exceptional item below
operating profit.
(iii) Amounts written back to fixed asset investments, net
The Group reduced its provision against its minority equity investments in
football clubs by GBP33 million, following the disposal of its investment in
Manchester United plc in October 2003 for GBP62 million in cash. The Group also
increased its provision against its remaining minority equity investments in
football clubs by a further GBP9 million. The reduction of GBP33 million in the
provision is recorded as an exceptional item below operating profit as it
relates directly to the disposal of the investment as detailed above. The
increase in the remaining provision is recorded as an exceptional item below
operating profit due to the distortion that its inclusion within operating
expenses would have on the individual operating expenses line to which it was
attributed.
5 Tax on profit on ordinary activities
Analysis of charge in period:
--------------------------------------------------------------------------------------------------------------------------
2004/05 2003/04 2003/04
Half year Half year Full year
charge charge charge
GBPm GBPm GBPm
(unaudited) (unaudited) (audited)
-------------------------------------------------------------------------------------------------------------------------
Current tax
UK corporation tax 74 69 127
Adjustment in respect of prior years (8) (8) (8)
Total current tax charge 66 61 119
-------------------------------------------------------------------------------------------------------------------------
Deferred tax:
Origination and reversal of timing differences 29 8 34
Decrease in estimate of recoverable deferred tax asset in respect of prior years 1 5 5
Total deferred tax charge 30 13 39
-------------------------------------------------------------------------------------------------------------------------
96 74 158
-------------------------------------------------------------------------------------------------------------------------
At 31 December 2004, a deferred tax asset of GBP12 million (2003/04: half year
GBP18 million; full year GBP13 million) principally arising from UK losses in
the Group has not been recognised. These losses can be offset only against
taxable profits generated in the entities concerned. Although the Directors
ultimately expect sufficient profits to arise, there is currently insufficient
evidence to support recognition of a deferred tax asset relating to these
losses. The losses are available to be carried forward indefinitely under
current law.
A deferred tax asset of GBP64 million (2003/04: half year GBP64 million; full
year GBP64 million) has not been recognised in respect of trading losses in the
Group's German holding companies of KirchPayTV and a deferred tax asset of GBP6
million (2003/04: half year GBP6 million; full year GBP6 million) arising
principally on other timing differences has not been recognised, on the basis
that these timing differences are not more likely than not to reverse.
A deferred tax asset of GBP450 million (2003/04: half year GBP450 million; full
year GBP450 million) has not been recognised in respect of potential capital
losses related to the Group's holding of KirchPayTV on the basis that these
timing differences are not more likely than not to reverse. The Group has
realised and unrealised capital losses in respect of football club and other
investments estimated to be in excess of GBP25 million (2003/04: half year GBP21
million; full year GBP21 million) which have not been recognised as a deferred
tax asset, on the basis that they are not more likely than not to be utilised
and thus reverse.
6 Equity dividends
-------------------------------------------------------------------------------------------------------------------------
2004/05 2003/04 2003/04
Half year Half year Full year
GBPm GBPm GBPm
(unaudited) (unaudited) (audited)
-------------------------------------------------------------------------------------------------------------------------
Interim proposed dividend of 4.0p (2003/04 half year: 2.75p; 2003/04 full year 77 53 53
2.75p) per Ordinary Share
Final proposed dividend of nil (2003/04 half year: nil; 2003/04 full year: - - 63
3.25p) per Ordinary Share
77 53 116
-------------------------------------------------------------------------------------------------------------------------
The Employee Share Ownership Plan ("ESOP") has waived its rights to dividends.
7 Earnings per share
Basic earnings per share represents the profit on ordinary activities after
taxation attributable to the equity shareholders, divided by the weighted
average number of Ordinary Shares in issue during the period, less the weighted
average number of shares held in the Group's ESOP trust during the period.
Diluted earnings per share represents the profit on ordinary activities after
taxation attributable to the equity shareholders, divided by the weighted
average number of Ordinary Shares in issue during the period, less the weighted
average number of shares held in the Group's ESOP trust during the period plus
the weighted average number of dilutive shares resulting from share options and
other potential shares outstanding during the period (see below).
The weighted average number of shares in the period was:
----------------------------------------------------------------------------------------------------------------------------
2004/05 2003/04 2003/04
Half year Half year Full year
Millions of Millions of Millions of
shares shares shares
(unaudited) (unaudited) (audited)
----------------------------------------------------------------------------------------------------------------------------
Ordinary Shares 1,939 1,938 1,940
ESOP trust shares (4) (2) (2)
Basic shares 1,935 1,936 1,938
----------------------------------------------------------------------------------------------------------------------------
Dilutive Ordinary Shares from share options and other potential Ordinary 2 6 8
Shares outstanding
Diluted shares 1,937 1,942 1,946
----------------------------------------------------------------------------------------------------------------------------
8 Intangible assets
The movement in the period was as follows:
---------------------------------------------------------------------------------------------------------------------------
Goodwill
GBPm
(unaudited)
---------------------------------------------------------------------------------------------------------------------------
Net book value at 1 July 2004 417
Amortisation (57)
Net book value at 31 December 2004 360
---------------------------------------------------------------------------------------------------------------------------
Goodwill of GBP272 million, GBP542 million and GBP5 million, arising on the
acquisitions of Sports Internet Group ("SIG"), British Interactive Broadcasting
("BIB") and WAPTV Limited respectively, is being amortised over periods of seven
years on a straight-line basis.
In accordance with FRS 11, impairment reviews were performed on the carrying
values of BiB and SIG goodwill balances at the end of the first full financial
year after acquisition, at 30 June 2002, which did not indicate impairment.
Consistent with the Group strategy, the business plans on which these reviews
were based reflected significant projected increases in betting and other
interactive revenues over the subsequent five years. The Group continues to
monitor the performance of these businesses and is satisfied that no impairment
of goodwill has occurred.
9 Fixed asset investments
-----------------------------------------------------------------------------------------------------------------------------
31 December 31 December 30 June
2004 2003 2004
GBPm GBPm GBPm
(unaudited) (unaudited) (audited)
-----------------------------------------------------------------------------------------------------------------------------
Investments in joint ventures and associates 25 34 33
Other investments 2 3 2
Total investments 27 37 35
------------------------------------------------------------------------------------------------------------------------------
Investments in joint ventures
On 1 November 2004, the Group sold its 49.5% investment in Granada Sky
Broadcasting ("GSB") for GBP14 million in cash, realising a loss on disposal of
GBP23 million. This included the write back of GBP32 million of goodwill which
had previously been written off to reserves. The carrying value of this
investment prior to disposal was GBP4 million.
Other investments
On 1 March 2004, the Group sold its 20% shareholding in QVC (UK), operator of
QVC - The Shopping Channel, for GBP49 million in cash, realising a profit on
disposal of GBP49 million. The carrying value of this investment prior to
disposal was nil.
In the six months to 31 December 2003, the Group increased its provision against
its remaining minority equity investments in football clubs by GBP9 million.
On 7 October 2003, the Group announced that it had sold its entire holding in
Manchester United plc for GBP62 million, recognising a profit on disposal of
GBP2 million following the release of GBP33 million provision previously held
against the investment, effective as at 30 September 2003.
In August 2003, the Group sold its 9.9% equity investment in Chelsea Village
plc, reducing the cost by GBP25 million and the provision by GBP19 million.
10 Reconciliation of movement in shareholders' funds
-----------------------------------------------------------------------------------------------------------------------------
Capital Profit Total equity
Share Share ESOP Merger Special redemption and loss shareholders'
capital Premium reserve reserve reserve reserve account funds
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
-----------------------------------------------------------------------------------------------------------------------------
At 1 July 2004 971 1,437 (30) 222 14 - (2,524) 90
ESOP shares utilised - - 7 - - - 5 12
Profit for the -
financial period - - - - - 154 154
Dividends - - - - - - (77) (77)
Transfer from merger -
reserve - - - (36) - 36 -
Write back of -
goodwill - - - - - 32 32
Share buy-back (11) - - - - 11 (128) (128)
At 31 December 2004 960 1,437 (23) 186 14 11 (2,502) 83
-----------------------------------------------------------------------------------------------------------------------------
Goodwill
In accordance with FRS 10, "Goodwill and Intangible assets", the Company has
included the write off of GBP32 million of unamortised goodwill in the
calculation of the loss on disposal of GSB, the effect of which has been
included in the Profit for the Financial Period (see note 4). The goodwill arose
on the original purchase of GSB and had previously been written off to the
profit and loss reserve as permitted prior to FRS 10. Accordingly, an adjustment
has been made to write back the GBP32 million charge to the profit and loss
reserve.
Share option schemes
At 31 December 2004, the Group's ESOP held 3,784,392 Ordinary Shares in the
Company at an average value of GBP6.18 per share. The 963,123 shares utilised
during the period relate to the exercise of Long Term Incentive Plan, Equity
Bonus Plan, Key Contributor Plan and Executive Share Option Scheme awards.
Purchase of own shares
On 12 November 2004, the Company's shareholders approved a resolution at the
Annual General Meeting for the Company to purchase up to 97,000,000 Ordinary
Shares. During the financial period, the Company purchased, and subsequently
cancelled, 23 million Ordinary Shares at an average price of 557 pence per
share, with a nominal value of GBP11 million, for a consideration of GBP128
million. This represents 1% of called-up share capital at the beginning of the
financial period under review.
11 Notes to consolidated cash flow statement
a) Reconciliation of operating profit to operating cash flows
------------------------------------------------------------------------------------------------------------------------------
2004/05 2003/04 2003/04
Half year Half year Full year
GBPm GBPm GBPm
(unaudited) (unaudited) (audited)
------------------------------------------------------------------------------------------------------------------------------
Operating profit 297 225 481
Depreciation 48 58 102
Amortisation of goodwill and other intangible fixed assets 57 58 119
Loss on disposal of tangible fixed assets - 1 1
Decrease in working capital 7 62 182
Decrease in provisions - (3) (3)
Foreign exchange movement (2) - -
Net cash inflow from operating activities 407 401 882
------------------------------------------------------------------------------------------------------------------------------
b) Analysis of changes in net debt
------------------------------------------------------------------------------------------------------------------------------
As at 31
As at 1 July December
2004 Cash flow Exchange 2004
GBPm GBPm GBPm GBPm
(audited) (unaudited) (unaudited) (unaudited)
------------------------------------------------------------------------------------------------------------------------------
Overnight deposits 73 144 - 217
Other cash 63 (7) - 56
136 137 - 273
------------------------------------------------------------------------------------------------------------------------------
Short-term deposits 338 94 2 434
Commercial paper 173 (173) - -
Cash and liquid resources 647 58 2 707
------------------------------------------------------------------------------------------------------------------------------
Debt due after more than one year (1,069) - - (1,069)
Capital element of finance leases (7) - - (7)
Total debt (1,076) - - (1,076)
------------------------------------------------------------------------------------------------------------------------------
Total net debt (429) 58 2 (369)
------------------------------------------------------------------------------------------------------------------------------
12 Regulatory update
European Commission investigation - Football Association Premier League Limited
The European Commission's investigation into the FAPL's joint selling of
exclusive broadcast rights to football matches has not yet concluded: the
Commission published a notice last year inviting third party comments on its
intention to adopt a decision making commitments offered by the FAPL legally
enforceable and to close its file. Among other things, these commitments address
the next auction of rights by the FAPL for the 2007/08 and subsequent seasons.
The outcome of this consultation has not yet been disclosed and the Commission
has not yet adopted a decision.
The Commission confirmed last year in a "comfort letter" that, on the basis of
the performance by Sky of certain commitments given by Sky to the Commission, it
has fully and finally settled the Commission's other investigations in
connection with Sky's bids for all rights in relation to FAPL matches throughout
the 2004/05 to 2006/07 FAPL seasons and any resulting agreements between Sky and
FAPL.
European Commission Investigation - Movie Contracts
The European Commission has announced in a press release (dated 26 October 2004)
that it has settled and closed its investigations with a number of major US
movie studios into the terms of which movies produced by them are supplied to
distributors, including pay television operators, throughout the European Union.
The investigations centred on the inclusion of "most favoured nations" (MFN)
clauses in these studios' output agreements and the settlements centred on
commitments offered by the studios to phase out all MFN clauses in their output
agreements. The Commission stated in its press release that two studios had not,
however, offered to phase out such clauses, in relation to which it appears that
the Commission's case remains open. The Commission has not published any further
statement or (final or provisional) decision indicating the actual terms on
which it has closed its investigations.
European Commission Sector Inquiry - "New Media" Sports Rights
The European Commission has opened a sector inquiry regarding the conditions of
provision of audio-visual content from sports events to internet and other "new
media" companies such as 3G mobile operators. The European Commission has stated
that the purpose of its investigation is to gain as clear and wide a view as
possible of the availability of audio-visual sports rights in the European
Union, so as to ascertain whether access by "new media" operators to such
content is not unduly restricted. The Group is co-operating with this
investigation. At this stage, the Group is unable to determine whether the
investigation will have a material effect on the Group.
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: 2 February 2005 By: /s/ Dave Gormley
Dave Gormley
Company Secretary