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 August 2003
13 August 2003
BRITISH SKY BROADCASTING GROUP PLC
(Name of Registrant)
Grant Way, Isleworth, Middlesex, TW7 5OD England
(Address of principal executive offices)
"This Report is incorporated by reference in the prospectus contained in the
Registration Statement on Form F-3 (SEC File No. 333-08246) filed by the
Registrant under the Securities Act of 1933."
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 Final Results released on 12 August 2003
Consolidated Profit and Loss Account for the year ended 30 June 2003
Notes Before Goodwill and 2003 Before Goodwill and 2002
goodwill and exceptional Total goodwill and exceptional Total
exceptional items GBPm exceptional items GBPm
items GBPm (audited) items GBPm (audited)
GBPm (audited) GBPm (audited)
(audited) (audited)
Turnover: Group turnover
and share of joint
ventures' turnover 3,262.5 - 3,262.5 2,915.3 - 2,915.3
Less: share of joint
ventures' turnover (76.5) - (76.5) (139.2) - (139.2)
Group turnover 1 3,186.0 - 3,186.0 2,776.1 - 2,776.1
Operating expenses, net 2 (2,815.3) (116.7) (2,932.0) (2,584.6) (136.5) (2,721.1)
Operating profit (loss) 370.7 (116.7) 254.0 191.5 (136.5) 55.0
Share of operating
results of joint
ventures 3 3.4 - 3.4 (76.7) - (76.7)
Joint ventures' goodwill
amortisation, net - - - - (1,069.9) (1,069.9)
Profit on sale
of fixed asset
investments 4 - - - - 2.3 2.3
Amounts written
off fixed asset
investments, net 4 - (15.1) (15.1) - (60.0) (60.0)
Release of
provision for
loss on disposal
of subsidiary 4 - - - - 10.0 10.0
Profit (loss) on
ordinary activities
before interest
and taxation 374.1 (131.8) 242.3 114.8 (1,254.1) (1,139.3)
Interest receivable
and similar income 5 3.7 - 3.7 11.1 - 11.1
Interest payable
and similar charges 5 (118.2) - (118.2) (148.0) - (148.0)
Profit (loss) on
ordinary activities
before taxation 259.6 (131.8) 127.8 (22.1) (1,254.1) (1,276.2)
Tax on profit (loss) on
ordinary activities 6 (58.7) 121.2 62.5 (28.6) (77.8) (106.4)
Profit (loss) on ordinary
activities after taxation 200.9 (10.6) 190.3 (50.7) (1,331.9) (1,382.6)
Equity dividends
- paid and proposed - -
Retained profit
(loss) for the
financial year 16 190.3 (1,382.6)
Basic earnings
(loss) per share 7 9.9p (73.3p)
Diluted earnings
(loss) per share 7 9.8p (73.3p)
Details of movements on reserves are shown in note 16.
The accompanying notes are an integral part of this consolidated profit and loss
account.
All results relate to continuing operations.
Consolidated Profit and Loss Account for the three months ended 30 June 2003
Before Goodwill and Three months Before Goodwill and Three months
goodwill and exceptional ended 30 goodwill and exceptional ended 30
exceptional items June exceptional items June
items GBPm 2003 items GBPm 2002
GBPm (unaudited) Total GBPm (unaudited) Total
(unaudited) GBPm (unaudited) GBPm
(unaudited) (unaudited)
Turnover: Group turnover and
share of joint ventures'
turnover 874.6 - 874.6 768.1 - 768.1
Less: share of joint
ventures' turnover (19.1) - (19.1) (20.2) - (20.2)
Group turnover 855.5 - 855.5 747.9 - 747.9
Operating expenses, net (738.6) (24.0) (762.6) (685.7) (25.2) (710.9)
Operating profit (loss) 116.9 (24.0) 92.9 62.2 (25.2) 37.0
Share of operating results
of joint ventures 2.1 - 2.1 (3.2) - (3.2)
Amounts written back
to fixed asset investments - 3.2 3.2 - - -
Profit (loss) on ordinary
activities before interest
and taxation 119.0 (20.8) 98.2 59.0 (25.2) 33.8
Interest receivable and
similar income 0.8 - 0.8 1.0 - 1.0
Interest payable and
similar charges (25.1) - (25.1) (32.2) - (32.2)
Profit (loss) on ordinary
activities before taxation 94.7 (20.8) 73.9 27.8 (25.2) 2.6
Tax on profit (loss) on
ordinary activities (37.9) 121.2 83.3 (12.0) 11.1 (0.9)
Profit (loss) on ordinary
activities after taxation 56.8 100.4 157.2 15.8 (14.1) 1.7
Basic earnings (loss) per share 8.1p 0.1p
Diluted earnings (loss) per share 8.1p 0.1p
Consolidated Statement of Total Recognised Gains and Losses for the year ended
30 June 2003
Notes 2003 2002
GBPm GBPm
(audited) (audited)
Profit (loss) for the financial year 16 190.3 (1,382.6)
Translation differences on foreign currency net investment - 1.4
Total recognised gains and losses relating to the year 190.3 (1,381.2)
The accompanying notes are an integral part of this consolidated statement of
total recognised gains and losses.
Consolidated Balance Sheet at 30 June 2003
Notes
2003 2002
GBPm GBPm
(audited) (audited)
Fixed assets
Intangible assets 8 535.9 657.4
Tangible assets 9 346.2 343.0
Investments 10 108.9 128.9
991.0 1,129.3
Current assets
Stocks 11 370.4 414.2
Debtors: Amounts falling due within one year
- deferred tax assets 30.8 13.9
- other 363.3 387.0
12 394.1 400.9
Debtors: Amounts falling due after more than one year
- deferred tax assets 159.0 24.9
- other 63.9 182.1
12 222.9 207.0
Cash at bank and in hand 46.4 50.3
1,033.8 1,072.4
Creditors: Amounts falling due within one year
- short-term borrowings 13 (0.2) (1.5)
- other creditors 13 (955.0) (903.9)
(955.2) (905.4)
Net current assets 78.6 167.0
Total assets less current liabilities 1,069.6 1,296.3
Creditors: Amounts falling due after more than one year
- long-term borrowings 14 (1,151.6) (1,576.9)
- other creditors 14 (20.5) (16.0)
(1,172.1) (1,592.9)
Provisions for liabilities and charges 15 (3.2) (4.1)
(105.7) (300.7)
Capital and reserves - equity
Called-up share capital 16 968.9 946.7
Share premium 16 2,535.5 2,409.8
Shares to be issued 16 2.7 255.8
Merger reserve 16 299.0 266.7
Profit and loss account 16 (3,911.8) (4,179.7)
16 (105.7) (300.7)
The accompanying notes are an integral part of this consolidated balance sheet.
Consolidated Cash Flow Statement for the year ended 30 June 2003
Notes
2003 2002
GBPm GBPm
(audited) (audited)
Net cash inflow from operating activities 17a 663.6 249.7
Dividends received from joint ventures 4.0 -
Returns on investments and servicing of finance
Interest received and similar income 3.2 8.8
Interest paid and similar charges on external financing (127.3) (141.0)
Interest element of finance lease payments (0.5) (0.6)
Net cash outflow from returns on investments and servicing of finance (124.6) (132.8)
Taxation
UK corporation tax paid (17.6) -
Consortium relief (paid) received (0.3) 22.5
Net cash (outflow) inflow from taxation (17.9) 22.5
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (98.4) (100.8)
Receipts from sales of tangible fixed assets 0.6 -
Receipts from sales of fixed asset investments 0.8 0.4
Receipts from sales of intangible fixed assets - 0.6
Purchase of own shares for Employee Share Ownership Plan ("ESOP") - (26.9)
Net cash outflow from capital expenditure and financial investment (97.0) (126.7)
Acquisitions and disposals
Funding to joint ventures (14.6) (11.6)
Repayments of funding from joint ventures 4.5 4.8
Net cash outflow from acquisitions and disposals (10.1) (6.8)
Net cash inflow before management of liquid resources and financing 418.0 5.9
Management of liquid resources
Decrease in short-term deposits 17c 0.5 69.5
Financing
Proceeds from issue of Ordinary Shares 4.8 14.3
Payments made on the issue of Ordinary Shares (0.1) (1.8)
Capital element of finance lease payments 17b (1.6) (1.7)
Net decrease in total debt 17b (425.0) (190.0)
Net cash outflow from financing (421.9) (179.2)
Decrease in cash 17c (3.4) (103.8)
Decrease in net debt 17c 422.7 18.4
The accompanying notes are an integral part of this consolidated cash flow
statement.
Notes
1. Turnover
2003 2002
GBPm GBPm
(audited) (audited)
DTH subscribers 2,341.2 1,929.2
Cable and digital terrestrial television ("DTT") subscribers 202.2 279.4
Advertising 283.6 250.7
Interactive 218.3 186.0
Other 140.7 130.8
3,186.0 2,776.1
2. Operating expenses, net
Before Goodwill and 2003 Before Goodwill and 2002
goodwill and exceptional Total goodwill and exceptional Total
exceptional items GBPm exceptional items GBPm
items GBPm (audited) items GBPm (audited)
GBPm (audited) GBPm (audited)
(audited) (audited)
Programming (i) 1,603.9 - 1,603.9 1,439.3 - 1,439.3
Transmission and 142.8 - 142.8 146.6 (4.1) 142.5
related functions (i)
Marketing 400.5 - 400.5 416.6 - 416.6
Subscriber management 324.4 - 324.4 291.1 - 291.1
Administration 236.1 116.7 352.8 203.2 140.6 343.8
Betting 107.6 - 107.6 87.8 - 87.8
2,815.3 116.7 2,932.0 2,584.6 136.5 2,721.1
(i) The amounts shown are net of GBP12.0 million (2002: GBP15.3 million)
receivable from the disposal of programming rights not acquired for use by the
Group, and GBP25.5 million (2002: GBP23.7 million) in respect of the provision
to third party broadcasters of spare transponder capacity.
3. Share of operating results of joint ventures
2003 2002
GBPm GBPm
(audited) (audited)
KirchPayTV GmbH & Co KGaA ("KirchPayTV") operating loss - (70.0)
Programming joint ventures operating profit (loss), net 3.4 (6.7)
3.4 (76.7)
This relates to the Group's equity share of the operating results of the Group's
joint ventures.
KirchPayTV
By 8 February 2002, the Group considered that its relationship with KirchPayTV
had irrevocably changed and that the Group had not exercised significant
influence since that date. Therefore, the Group believed that, from 8 February
2002, it was no longer appropriate to account for its interest in KirchPayTV as
a joint venture, and ceased accounting for KirchPayTV's losses using the gross
equity method from that date.
As the Group has no intention of providing any future funding to KirchPayTV and
the Group, on a consolidated basis, has no financial commitments, outstanding
financial liabilities or contingent liabilities in respect of KirchPayTV, an
amount of GBP13.5 million was released from the impairment provision made at 31
December 2001, in order to match the Group's share of KirchPayTV's losses for
the period from 1 January 2002 to 8 February 2002.
4. Exceptional items
Charge (credit) Taxation 2003 Charge (credit) Taxation 2002
before charge Total before charge Total
taxation (credit) GBPm taxation (credit) GBPm
GBPm GBPm (audited) GBPm GBPm (audited)
(audited) (audited) (audited) (audited)
(Release of provision)
provision against ITV
Digital programming
debtors (i) (iv) (4.8) 1.4 (3.4) 22.3 (6.7) 15.6
Release of analogue
termination provision (v) - - - (4.1) 1.2 (2.9)
Exceptional operating items (4.8) 1.4 (3.4) 18.2 (5.5) 12.7
Joint ventures' goodwill
amortisation, net (vi) - - - 971.4 - 971.4
Profit on sale of
fixed asset investment (vii) - - - (2.3) - (2.3)
Amounts written off fixed
asset investments,
net (ii) (viii) 15.1 - 15.1 60.0 - 60.0
Release of provision
for loss on disposal
of subsidiary (ix) - - - (10.0) - (10.0)
(Recognition) write-down
of deferred tax asset (iii) (x) - (122.6) (122.6) - 83.3 83.3
Total exceptional items 10.3 (121.2) (110.9) 1,037.3 77.8 1,115.1
2003
Exceptional operating items
(i) ITV Digital
The Group provided in full against all unprovided balances owed by ITV Digital,
following the announcement made on 30 April 2002 (see note (iv) below). During
the year, the Group received GBP4.8m from ITV Digital's administrators and
released GBP4.8 million of its exceptional operating provision accordingly.
Other exceptional items
(ii) Amounts written off fixed asset investments, net
At 31 December 2002, the Group made a further provision against its minority
investments in football clubs, leading to a non-cash exceptional charge of
GBP21.0 million. Subsequently, the Group reduced its provision against its
investment in Chelsea Village plc at 30 June 2003 by GBP3.2 million, following
the agreement to sell its minority investment in July 2003.
At 31 December 2002, the Group reduced its deferred revenue balance relating to
minority investments in new media companies by GBP5.1 million, and reduced both
its investment and its provision against the investment in these companies
accordingly.
At 31 December 2002, the Group made a provision against its investment in Open
TV shares, leading to a non-cash exceptional charge of GBP2.9 million, bringing
the carrying value of the Group's investment in Open TV to GBP0.3 million.
During February and March 2003, the Group disposed of its entire investment in
Open TV shares, leading to a loss on disposal of GBP0.1 million.
(iii) Recognition of deferred tax asset
Following a review of the forecast utilisation of tax losses within the Group,
and as a consequence of a planned reorganisation of certain assets within the
Group, there is now sufficient evidence to support the recognition of a deferred
tax asset arising on losses incurred in the Company. Accordingly, a deferred tax
credit of GBP122.6 million has been recognised as an exceptional item.
2002
Exceptional operating items
(iv) ITV Digital
At 27 March 2002, the date on which the ITV Digital DTT platform was put into
administration, the Group had balances owed to it and unprovided for, in respect
of programming licensed to ITV Digital, of GBP22.3 million. On 30 April 2002,
the joint administrators of ITV Digital announced the closure of pay television
services on the platform and their intention to close the administration.
Accordingly, the Group made an exceptional operating provision against the whole
of this balance. (see note (i) above)
(v) Release of analogue termination provision
On 27 September 2001, the Group terminated its analogue operation. From the
original exceptional operating provision of GBP41.0 million, taken at 30 June
2000, GBP4.1 million of provision had not been utilised at 30 June 2002, and was
therefore released to the profit and loss account as an exceptional credit.
Other exceptional items
(vi) Joint ventures' goodwill amortisation, net
The exceptional item of GBP971.4 million of joint ventures' goodwill
amortisation, net, relates to the impairment charge taken against the carrying
value of the Group's interest in KirchPayTV of GBP984.9 million at 31 December
2001, net of an amount of GBP13.5 million released from the provision matching
the Group's share of losses for the period from 1 January 2002 to 8 February
2002, at which date the Group ceased to gross equity account for KirchPayTV's
results.
(vii) Profit on sale of fixed asset investment
On 2 July 2001, the Group disposed of its unlisted investment in Static 2358
Limited, realising a profit on disposal of GBP2.3 million.
(viii) Amounts written off fixed asset investments
At 31 December 2001, the Group made a provision against its minority investments
in football clubs, leading to a non-cash exceptional charge of GBP60.0 million.
4. Exceptional items (continued)
(ix) Release of provision for loss on disposal of subsidiary
On 16 October 2001, the Group and Ladbrokes, the betting and gaming division of
Hilton Group plc, announced that they had agreed not to pursue the proposed
joint venture to offer a fixed odds betting service on Sky Sports channels and
other media. As a result, the provision for loss on disposal of subsidiary,
taken at 30 June 2001, was written back, resulting in a non-cash exceptional
profit of GBP10.0 million. The Group continues to operate and develop
interactive TV betting services through its wholly-owned bookmaker, Sky Bet
(formerly known as Surrey Sports).
(x) Write-down of deferred tax asset
Following the impairment charge made in respect of the Group's investment in
KirchPayTV at 31 December 2001 there was insufficient evidence to support the
recognition of a deferred tax asset arising on losses incurred by certain UK
companies. Accordingly, the deferred tax asset of GBP95.6 million was written
off in full at 31 December 2001, although by 30 June 2002, GBP12.3 million of
this amount had been written back due to the utilisation of tax losses.
5. Interest
a) Interest receivable and similar income
2003 2002
GBPm GBPm
Group
Interest receivable on short-term deposits 2.6 8.2
Interest receivable on funding to joint ventures 0.1 0.3
Other interest receivable and similar income 0.5 0.6
3.2 9.1
Joint ventures
Share of joint ventures' interest receivable 0.5 2.0
Total interest receivable and similar income 3.7 11.1
b) Interest payable and similar charges
2003 2002
GBPm GBPm
Group
On bank loans, overdrafts and other loans repayable within five years, not by instalments:
- GBP200 million revolving credit facility ("RCF") (previously GBP300 million RCF)* 2.5 10.8
- GBP750 million RCF ** 27.0 46.3
- GBP600 million RCF ** 3.7 -
US$650 million of 8.200% Guaranteed Notes, repayable in 2009 31.1 31.6
GBP100 million of 7.750% Guaranteed Notes, repayable in 2009 7.8 7.8
US$600 million of 6.875% Guaranteed Notes, repayable in 2009 30.1 30.1
US$300 million of 7.300% Guaranteed Notes, repayable in 2006 13.8 15.1
Finance lease interest 1.0 1.0
Other interest payable and similar charges 0.9 0.4
117.9 143.1
Joint ventures
Share of joint ventures' interest payable 0.3 4.9
Total interest payable and similar charges 118.2 148.0
* In March 2003 the Group voluntarily cancelled GBP100 million of its GBP300
million RCF. The maturity date of the resultant GBP200 million RCF is still June
2004 (see note 14).
** In addition, in March 2003 the Group entered into a new GBP600 million RCF.
This facility was used to cancel the GBP750 million RCF, which was entered into
in July 1999, and will be used for general corporate purposes. The new GBP600
million RCF has a maturity date of March 2008.
6. Taxation
a) Analysis of charge (credit) in year
Tax charge
(credit) on Tax charge on
profit before profit before
exceptional Exceptional tax 2003 exceptional Exceptional tax 2002
items charge (credit) Total items charge (ii) Total
GBPm GBPm GBPm GBPm GBPm GBPm
(audited) (audited) (audited) (audited) (audited) (audited)
Current tax 85.0 1.4 86.4 - - -
Deferred tax:
Origination and reversal
of timing differences (26.6) (122.6) (149.2) 27.3 77.8 105.1
Increase in estimate of
recoverable deferred tax
asset in respect of prior
years (1.8) - (1.8) - - -
Total deferred tax (i) (28.4) (122.6) (151.0) 27.3 77.8 105.1
Share of joint ventures' tax
charge 2.1 - 2.1 1.3 - 1.3
58.7 (121.2) (62.5) 28.6 77.8 106.4
(i) During the year the Group recorded a deferred tax credit of GBP163.3 million
relating to deferred tax assets not previously recognised. The Directors
consider that there is now sufficient evidence to support the recognition of
these deferred tax assets on the basis that it is more likely than not there
will be suitable taxable profits against which these assets can be utilised.
GBP122.6 million of the deferred tax credit has been treated as an exceptional
item.
(ii) An exceptional deferred tax charge of GBP95.6 million was made at 31
December 2001, against which GBP12.3 million has been written back at 30 June
2002 as a result of the utilisation of tax losses. This was offset by a GBP5.5
million tax credit on the provision against ITV Digital debtors and the release
of the analogue termination provision, treated as exceptional operating items.
b) Factors affecting the current tax charge for the year
The current tax charge for the year is higher than the standard rate of
corporation tax in the UK (30%). The differences are explained below:
2003 2002
GBPm GBPm
Profit (loss) on ordinary activities before tax 127.8 (1,276.2)
Less: Share of joint ventures' (profit) loss before tax (3.6) 79.6
Group profit (loss) on ordinary activities before tax 124.2 (1,196.6)
Group profit (loss) on ordinary activities multiplied by standard rate of corporation tax in
the UK of 30% (2002: 30%) 37.3 (359.0)
Effects of:
Write-down of KirchPayTV not deductible for tax purposes - 291.4
Other expenses not deductible for tax purposes (primarily goodwill amortisation) 42.5 77.8
Other timing differences 11.8 19.2
Utilisation of tax losses (7.3) (30.6)
Consortium relief 2.1 1.2
Current tax charge for the year 86.4 -
c) Factors that may affect future tax charges
At 30 June 2003, a deferred tax asset of GBP12.5 million (2002: GBP149.6
million) 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 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.
Deferred tax assets of GBP63.7 million (2002: GBP63.7 million) have not been
recognised in respect of trading losses in the Group's German holding companies
of KirchPayTV, and GBP450.0 million (2002: GBP450.0 million) have not been
recognised in respect of potential capital losses related to the Group's holding
of KirchPayTV. A deferred tax asset of GBP4.6 million (2002: GBP18.0 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.
7. Earnings (loss) per share
Basic earnings (loss) per share represents the profit (loss) on ordinary
activities after taxation attributable to the equity shareholders, divided by
the weighted average number of Ordinary Shares in issue during the year of
1,921.2 million (2002: 1,891.2 million), less the weighted average number of
shares held in the Group's ESOP trust of 6.2 million (2002: 3.8 million).
Diluted earnings (loss) per share represents the profit (loss) on ordinary
activities after taxation attributable to the equity shareholders divided by the
weighted average number of Ordinary Shares in issue during the year of 1,921.2
million (2002: 1,891.2 million), less the weighted average number of shares held
in the Group's ESOP trust of 6.2 million (2002: 3.8 million), plus the weighted
average number of dilutive shares resulting from share options and other
potential shares outstanding of 27.2 million (2002: nil).
8. Intangible fixed assets
The movement in the year was as follows:
Goodwill (i), (ii) Other intangible Total
GBPm fixed assets GBPm
(audited) GBPm (audited)
(audited)
Net book value at 1 July 2002 657.2 0.2 657.4
Charge (116.3) - (116.3)
Impairment losses (ii) (5.2) - (5.2)
Net book value at 30 June 2003 535.7 0.2 535.9
(i) Goodwill of GBP272.4 million, GBP542.1 million and GBP5.2 million, arising
on the acquisitions of Sports Internet Group ("SIG"), British Interactive
Broadcasting ("BIB") and WAPTV 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. These reviews showed that no impairment
was identified in either case. 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. Since the time of these reviews the performance of these operations has
been broadly in line with the forecasts in the business plans used for these
reviews, and no indications of impairment have arisen.
(ii) At 31 December 2002, the Group made a provision of GBP5.2 million, included
within amortisation, against goodwill which arose on the acquisition of Opta
Index Limited ("Opta") (a subsidiary of SIG, which provides statistics on the
sports industry), reducing the carrying value of the goodwill to nil. The
provision was made as a result of the Group's announcement in December 2002 that
it would close Opta. The Group is currently in negotiations to sell or
license some or all of Opta's assets to a third party.
9. Tangible fixed assets
The movement in the year was as follows:
Freehold land Short leasehold Equipment, Assets in course of
and buildings improvements fixtures construction Total
GBPm GBPm and fittings GBPm GBPm
(audited) (audited) GBPm (audited) (audited)
(audited)
Net book value at 1 July 2002 31.9 40.0 241.2 29.9 343.0
Additions 0.4 3.2 73.0 24.8 101.4
Disposals - - (0.3) - (0.3)
Transfers - - 25.8 (25.8) -
Depreciation (2.3) (4.0) (91.6) - (97.9)
Net book value at 30 June 2003 30.0 39.2 248.1 28.9 346.2
10. Fixed asset investments
2003 2002
GBPm GBPm
(audited) (audited)
Investments in joint ventures 30.4 21.8
Investment in own shares 34.6 42.2
Other investments 43.9 64.9
Total fixed asset investments 108.9 128.9
11. Stocks
2003 2002
GBPm GBPm
(audited) (audited)
Television programme rights 337.2 367.3
Set-top boxes and related equipment 29.0 42.2
Raw materials and consumables 1.6 4.4
Goods held for resale 2.6 0.3
370.4 414.2
At least 79% (2002: 77%) of the existing television programme rights at 30 June
2003 will be amortised within one year.
12. Debtors
2003 2002
GBPm GBPm
(audited) (audited)
Debtors: Amounts falling due within one year
Trade debtors 170.9 177.5
Amounts owed by joint ventures 16.0 15.2
Amounts owed by other related parties 0.4 1.0
Other debtors 6.4 8.5
Prepaid programme rights 53.8 80.5
Prepaid transponder rentals 16.9 15.5
Advance Corporation Tax 39.7 18.2
Deferred tax assets 30.8 13.9
Prepaid media agency rights 2.6 3.7
Other prepayments and accrued income 56.6 66.9
394.1 400.9
Debtors: Amounts falling due after more than one year
Prepaid programme rights 2.7 38.6
Prepaid transponder rentals 48.7 55.6
Advance Corporation Tax - 67.1
Deferred tax assets 159.0 24.9
Prepaid media agency rights 5.5 12.8
Other prepayments and accrued income 7.0 8.0
222.9 207.0
13. Creditors: Amounts falling due within one year
2003 2002
GBPm GBPm
(audited) (audited)
Short-term borrowings
GBP200 million RCF (see note 14) - -
Obligations under finance leases 0.2 1.5
0.2 1.5
Other
Trade creditors 323.4 311.1
Amounts due to joint ventures 0.8 -
Amounts due to related parties 24.6 20.4
UK corporation tax 27.6 4.7
VAT 61.7 86.2
Social security and PAYE 0.4 7.0
Other creditors 43.5 42.0
Accruals and deferred income 473.0 432.5
955.0 903.9
955.2 905.4
Included within trade creditors are GBP226.2 million (2002: GBP243.6 million) of
US dollar-denominated programme creditors. At least 90% (2002: 90%) of these
were covered by forward rate currency contracts.
14. Creditors: Amounts falling due after more than one year
2003 2002
GBPm GBPm
(audited) (audited)
Long-term borrowings
GBP750 million RCF - 500.0
GBP600 million RCF 75.0 -
US$650 million of 8.200% Guaranteed Notes, repayable in 2009 412.5 412.5
GBP100 million of 7.750% Guaranteed Notes, repayable in 2009 100.0 100.0
US$600 million of 6.875% Guaranteed Notes, repayable in 2009 367.2 367.2
US$300 million of 7.300% Guaranteed Notes, repayable in 2006 189.2 189.2
Obligations under finance leases 7.5 7.8
Other borrowings 0.2 0.2
1,151.6 1,576.9
Other
Accruals and deferred income 20.5 16.0
1,172.1 1,592.9
In March 2003 the Group entered into a new GBP600 million RCF. This facility was
used to cancel the GBP750 million RCF, which was entered into in July 1999, and
will be used for general corporate purposes. The new GBP600 million RCF has a
maturity date of March 2008 and interest accrues at a margin of between 0.600%
and 1.125% above the London Inter-Bank Offer Rate ("LIBOR"), dependent on the
Group's Net debt:EBITDA leverage ratio (as defined in the loan agreement). Until
June 2004, the margin is fixed at 1.125% and shall not fall below 0.700% per
annum above LIBOR prior to March 2006.
Also in March 2003, the Group voluntarily cancelled GBP100 million of the GBP300
million March 2001 RCF. The maturity date of the resultant GBP200m RCF is still
June 2004 and should it be drawn upon, accrues interest at a rate (presently
1.250%) above LIBOR dependent on the Group's credit rating. This facility
reduction, together with the replacement of the Group's GBP750 million RCF as
described above, reduced the Group's aggregate available facilities from
GBP1,050 million to GBP800 million. In June 2004, when the GBP200 million RCF
matures, the aggregate facilities available to the Group will be reduced to
GBP600 million. These reductions in committed bank facilities are consistent
with the Group's anticipated liquidity requirements.
15. Provisions for liabilities and charges
Sky Interactive reorganisation Sky In-Home Service Limited Total
provision reorganisation provision (audited)
(audited) (audited) GBPm
GBPm GBPm
At 1 July 2002 3.9 0.2 4.1
Utilised in the year (0.8) (0.1) (0.9)
At 30 June 2003 3.1 0.1 3.2
16. Reconciliation of movement in shareholders' funds
Movement in shareholders' funds includes all movements in reserves.
Share Share Shares to Merger Profit Total equity
capital premium be issued reserve and loss shareholders'
GBPm GBPm GBPm GBPm account deficit
(audited) (audited) (audited) (audited) GBPm GBPm
(audited) (audited)
At 1 July 2002 946.7 2,409.8 255.8 266.7 (4,179.7) (300.7)
Issue of share capital 22.2 125.8 (253.1) 111.5 (1.6) 4.8
Share issue costs - (0.1) - - - (0.1)
Profit for the financial year - - - - 190.3 190.3
Transfer from merger reserve - - - (79.2) 79.2 -
At 30 June 2003 968.9 2,535.5 2.7 299.0 (3,911.8) (105.7)
During the year the Company issued shares with a market value of GBP6.4 million
(2002: GBP35.2 million) in respect of the exercise of options awarded under
various share option schemes, with GBP4.8 million (2002: GBP14.3 million)
received from employees.
On 11 November 2002, the Company issued 43.2 million shares with a fair value of
GBP253.1 million to HSBC, Matsushita and BT in respect of deferred consideration
for the acquisition of the remaining 67.5% of BiB in May and June 2001.
Additional Group merger reserve of GBP111.5 million was created in relation to
20.8 million shares issued to BT in respect of deferred consideration for the
acquisition of 19.9% of BiB.
17. Notes to consolidated cash flow statement
a) Reconciliation of operating profit to operating cash flows
Before Goodwill and 2003 Before Goodwill and 2002
goodwill and exceptional Total goodwill and exceptional Total
exceptional items GBPm exceptional items GBPm
items GBPm (audited) items GBPm (audited)
GBPm (audited) GBPm (audited)
(audited) (audited)
Operating profit (loss) 370.7 (116.7) 254.0 191.5 (136.5) 55.0
Depreciation 97.9 - 97.9 81.1 - 81.1
Amortisation of - 121.5 121.5 0.1 118.3 118.4
goodwill and other
intangible fixed assets
Profit on sale of fixed (0.3) - (0.3) - - -
assets
Decrease in stock 43.8 - 43.8 9.9 - 9.9
Decrease in debtors 88.0 - 88.0 77.9 22.3 100.2
Increase (decrease) in 59.6 - 59.6 (80.5) - (80.5)
creditors
Provision utilised, net (0.9) - (0.9) (0.3) (34.1) (34.4)
Net cash inflow 658.8 4.8 663.6 279.7 (30.0) 249.7
(outflow) from
operating activities
17. Notes to consolidated cash flow statement (continued)
b) Analysis of changes in net debt
At 1 July Cash flow At 30 June
2002 GBPm 2003
GBPm (audited) GBPm
(audited) (audited)
Overnight deposits 38.7 (6.0) 32.7
Other cash 11.1 2.6 13.7
49.8 (3.4) 46.4
Short-term deposits 0.5 (0.5) -
Cash at bank and in hand 50.3 (3.9) 46.4
Debt due after more than one year (1,569.1) 425.0 (1,144.1)
Finance leases (9.3) 1.6 (7.7)
Total debt (1,578.4) 426.6 (1,151.8)
Total net debt (1,528.1) 422.7 (1,105.4)
c) Reconciliation of net cash flow to movement in net debt
Notes 2003 2002
GBPm GBPm
(audited) (audited)
Decrease in cash (3.4) (103.8)
Decrease in short-term deposits (0.5) (69.5)
Cash outflow resulting from decrease in debt and lease financing 426.6 191.7
Decrease in net debt 422.7 18.4
Net debt at beginning of year (1,528.1) (1,546.5)
Net debt at end of year 17b (1,105.4) (1,528.1)
d) Major non-cash transactions
2003
Issue of shares - deferred consideration for BiB
On 11 November 2002, the Company issued 43.2 million shares with a fair value of
GBP253.1 million to HSBC, Matsushita and BT in respect of deferred consideration
for the acquisition of the remaining 67.5% of BiB in May and June 2001.
2002
Impairment of investment in KirchPayTV
Effective 31 December 2001, the Group wrote down the carrying value of its
investment in KirchPayTV to nil (see note 4). The write-down resulted in a net
non-cash exceptional charge to the profit and loss account of GBP971.4 million.
18. Regulatory update
Office of Fair Trading ("OFT")
On 5 December 2000 the UK Office of Fair Trading, or the OFT, announced that it
was to conduct an inquiry into the affairs of British Sky Broadcasting Limited
("BSkyB Limited"), under the UK Competition Act 1998 ("Competition Act"), in
particular the wholesale supply by BSkyB Limited of certain of its channels to
third party distributors in the UK.[1] BSkyB Limited maintained that it had not
infringed the Competition Act and, on 17 December 2002, following submission by
BSkyB Limited of written and oral representations, the OFT announced that BSkyB
Limited had not been found in breach of competition law in respect of its
investigation. Such findings by the OFT may be appealed by third parties who
have a "sufficient interest" in accordance with the provisions of the
Competition Act.
EC Investigation - FAPL
The EC Commission has commenced investigations into a number of agreements,
decisions or practices leading to the acquisition of broadcast rights to
football events within the European Union, including the sale of exclusive
broadcast rights to Premier League football by the Football Association Premier
League Limited, or the FAPL ("FAPL"). On 21 June 2002, BSkyB Limited and the
FAPL notified the BSkyB Limited's current agreements for FAPL rights to the EC
Commission seeking either a clearance or an exemption from Article 81 of the EC
Treaty. The FAPL has also notified the rules of the FAPL to the EC Commission.
On 20 December 2002, the EC Commission issued a Statement of Objections to the
FAPL outlining certain concerns in respect of the FAPL's joint selling of
broadcast rights to Premier League football. On 30 July 2003, the Group received
a request for information from the EC Commission concerning the current bidding
process being undertaken by the FAPL. The Group is currently unable to assess
whether this EC investigation will have a material effect on the Group.
EC Investigation - Movie Contracts
The EC Commission is investigating the terms on which movies produced by major
US movie studios are supplied to distributors, including pay TV operators,
throughout the European Union. The Group has co-operated with this
investigation. At this stage, the Group is unable to determine whether it will
have a material effect on the Group.
19. Post balance sheet events
On 22 July 2003, the Group entered into a binding agreement for the sale of its
9.9% equity investment in Chelsea Village plc for consideration in cash of
GBP5.9 million.
On 8 August 2003, it was announced that the Group has successfully bid for all
four packages of exclusive live UK rights to FA Premier League football from the
beginning of the 2004/05 season to the end of the 2006/07 season. The total cost
of the new agreement for the four UK live packages is GBP1,024 million over
three years.
______________________________________
This financial information does not constitute statutory accounts for the
purpose of section 240 of the Companies Act 1985. The financial information for
the year ended 30 June 2003 has been extracted from the statutory accounts of
British Sky Broadcasting Group plc for the year ended 30 June 2003, which have
not yet been filed with the Registrar of Companies, but on which the auditors
gave an unqualified report, which did not contain a statement under section 237
(2) or (3) of the Companies Act 1985, on 11 August 2003. The preliminary
announcement was approved by the Board of Directors on 11 August 2003.
The financial information for the three months ended 30 June 2003 and 30 June
2002 is unaudited.
The financial information for the year ended 30 June 2002 has been extracted
from the statutory accounts of British Sky Broadcasting Group plc for the year
ended 30 June 2002, which have been filed with the registrar of Companies, on
which the auditors gave an unqualified report, which did not contain a statement
under section 237 (2) or (3) of the Companies Act 1985.
_______________________________________
1 Where an undertaking has intentionally or negligently infringed the
Competition Act, it may be fined up to a maximum of 10% of its total UK turnover
for each year it is found to be in breach, up to a maximum of three years. In
addition, third parties, such as customers and competitors, may be entitled to
recover damages where they have suffered loss as a result of conduct in breach
of the Competition Act.
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: 13 August 2003 By: /s/ Dave Gormley
Dave Gormley
Company Secretary