FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934
For the month of August 2004
4 August 2004
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 NO. 1 Excerpt from the announcement made by British Sky Broadcasting
Group plc of its financial results for the year ended June 30, 2004
British Sky Broadcasting Group plc
Consolidated Profit and Loss Account for the year ended 30 June 2004
Before Before
goodwill Goodwill goodwill and Goodwill
and and exceptional and 2003
exceptional exceptional 2004 items exceptional Total
items items Total as restated* items as
Notes GBPm GBPm GBPm GBPm GBPm restated*
GBPm
(audited) (audited) (audited) (audited) (audited) (audited)
Group and share of joint ventures' turnover 3,738 - 3,738 3,263 - 3,263
Less: share of joint ventures' turnover (82) - (82) (77) - (77)
Group turnover 1 3,656 - 3,656 3,186 - 3,186
------------------------------------------------------------------------------------------------------------------------
Operating expenses, net 2 (3,056) (119) (3,175) (2,822) (116) (2,938)
------------------------------------------------------------------------------------------------------------------------
Operating profit 600 (119) 481 364 (116) 248
------------------------------------------------------------------------------------------------------------------------
Share of joint venture' and associates'
operating results 3 (5) 10 5 3 - 3
Profit on disposal of fixed asset investments 4 - 51 51 - - -
Amounts written back to (written off) fixed
asset investments, net 4 - 24 24 - (15) (15)
Profit on ordinary activities before interest
and taxation 595 (34) 561 367 (131) 236
------------------------------------------------------------------------------------------------------------------------
Interest receivable and similar income 5 10 - 10 4 - 4
Interest payable and similar charges 5 (91) - (91) (118) - (118)
Profit on ordinary activities before taxation 514 (34) 480 253 (131) 122
------------------------------------------------------------------------------------------------------------------------
Tax (charge) credit on profit on ordinary
activities 6 (158) - (158) (59) 121 62
Profit on ordinary activities after taxation 356 (34) 322 194 (10) 184
------------------------------------------------------------------------------------------------------------------------
Equity dividends 7 (116) -
Retained profit for the financial year 15 206 184
------------------------------------------------------------------------------------------------------------------------
Earnings per share - basic 16.6p 9.6p
Earnings per share - diluted 16.6p 9.5p
------------------------------------------------------------------------------------------------------------------------
*The full year results for 2003 have been restated following the adoption of
Urgent Issues Task Force abstract 38 "Accounting for ESOP trusts" ("UITF 38").
UITF 38 requires that the Company's shares held by the Group's Employee Share
Ownership Plan ("ESOP"), which were previously held within fixed asset
investments, be presented as a deduction from shareholders' funds. In addition,
the charge to the profit and loss account in relation to awards under the
Long-Term Incentive Plan ("LTIP"), the Key Contributor Plan ("KCP") and the
Equity Bonus Plan ("EBP"), which was previously based on the cost of shares held
by the ESOP, is now based on the difference between the market price on the date
of grant and the exercise price. The adoption of UITF 38 has been treated as a
prior year adjustment with comparative figures being restated accordingly.
There were no recognised gains or losses in either year other than those
included within the profit and loss account, with the exception of a prior
period adjustment in respect of adoption of UITF 38. The cumulative effect of
this adjustment was a GBP12 million reduction to the brought forward profit and
loss reserve at 1 July 2003.
Details of movements on reserves are shown in note 15.
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 2004
Three Before Three
months goodwill months
Before Goodwill ended 30 and Goodwill ended 30
goodwill and and June exceptional and June
exceptional exceptional 2004 items exceptional Total
items items Total as restated* items as restated*
GBPm GBPm GBPm GBPm GBPm GBPm
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Group and share of joint ventures' turnover 979 - 979 875 - 875
Less: share of joint ventures' turnover (20) - (20) (20) - (20)
Group turnover 959 - 959 855 - 855
---------------------------------------------------------------------------------------------------------------------
Operating expenses, net (797) (32) (829) (740) (23) (763)
Operating profit 162 (32) 130 115 (23) 92
---------------------------------------------------------------------------------------------------------------------
Share of joint ventures' and associates'
operating results (1) 10 9 2 - 2
Amounts written back to fixed asset
investments - - - - 3 3
Profit on ordinary activities before
interest and taxation 161 (22) 139 117 (20) 97
---------------------------------------------------------------------------------------------------------------------
Interest receivable and similar income 5 - 5 1 - 1
Interest payable and similar charges (23) - (23) (25) - (25)
Profit on ordinary activities before
taxation 143 (22) 121 93 (20) 73
---------------------------------------------------------------------------------------------------------------------
Tax (charge) credit on profit on ordinary
activities (42) - (42) (38) 121 83
Profit on ordinary activities after taxation 101 (22) 79 55 101 156
---------------------------------------------------------------------------------------------------------------------
Equity dividends (63) -
Retained profit for the period 16 156
---------------------------------------------------------------------------------------------------------------------
Earnings per share - basic 4.1p 8.1p
Earnings per share - diluted 4.1p 8.0p
---------------------------------------------------------------------------------------------------------------------
*The results for the three months ended 30 June 2003 have been restated
following the adoption of UITF 38.
Consolidated Balance Sheet at 30 June 2004
Notes
2003
2004 as restated*
GBPm GBPm
(audited) (audited)
Fixed assets
Intangible fixed assets 8 417 536
Tangible fixed assets 9 376 346
Investments:
Investments in associates 1 -
Investments in joint
ventures : Share of gross assets 72 87
: Share of gross
liabilities (45) (59)
: Transfer to creditors 5 2
Total investments in joint ventures and associates 10 33 30
--------------------------------------------------------------------------------------------------------------------
Other fixed asset investments 10 2 44
Total investments 35 74
--------------------------------------------------------------------------------------------------------------------
828 956
--------------------------------------------------------------------------------------------------------------------
Current assets
Stocks 11 375 370
Debtors: Amounts falling due within one year 12
- deferred tax asset 49 31
- other 321 363
370 394
--------------------------------------------------------------------------------------------------------------------
Debtors: Amounts falling due after more than one year 12
- deferred tax asset 102 159
- other 42 64
144 223
--------------------------------------------------------------------------------------------------------------------
Cash and liquid resources:
- current asset investments 173 -
- cash at bank and in hand 474 47
647 47
--------------------------------------------------------------------------------------------------------------------
1,536 1,034
--------------------------------------------------------------------------------------------------------------------
Creditors: Amounts falling due within one year 13 (1,170) (967)
Net current assets 366 67
--------------------------------------------------------------------------------------------------------------------
Total assets less current liabilities 1,194 1,023
--------------------------------------------------------------------------------------------------------------------
Creditors: Amounts falling due after more than one
year
- long-term borrowings 14 (1,076) (1,152)
- accruals and deferred income 14 (28) (20)
(1,104) (1,172)
--------------------------------------------------------------------------------------------------------------------
Provisions for liabilities and charges - (3)
90 (152)
--------------------------------------------------------------------------------------------------------------------
Capital and reserves - equity
Called-up share capital 15 971 969
Share premium 15 1,437 2,536
Shares to be issued 15 - 3
ESOP reserve 15 (30) (35)
Merger reserve 15 222 299
Special reserve 15 14 -
Profit and loss account 15 (2,524) (3,924)
Shareholders' funds (deficit) 15 90 (152)
--------------------------------------------------------------------------------------------------------------------
*The balance sheet as at 30 June 2003 has been restated following the adoption
of UITF 38.
The accompanying notes are an integral part of this consolidated balance sheet.
Consolidated Cash Flow Statement for the year ended 30 June 2004
Notes
2004 2003
GBPm GBPm
(audited) (audited)
Net cash inflow from operating activities 16a 882 664
---------------------------------------------------------------------------------------------------------------------
Dividends received from joint ventures 4 4
---------------------------------------------------------------------------------------------------------------------
Returns on investments and servicing of finance
Interest received and similar income 7 3
Interest paid and similar charges (89) (127)
Interest element of finance lease payments - (1)
Net cash outflow from returns on investments and servicing of finance (82) (125)
---------------------------------------------------------------------------------------------------------------------
Taxation
UK corporation tax paid (55) (18)
Consortium relief paid (3) -
Net cash outflow from taxation (58) (18)
---------------------------------------------------------------------------------------------------------------------
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (132) (98)
Receipts from sales of fixed asset investments 116 1
Net cash outflow from capital expenditure and financial investment (16) (97)
---------------------------------------------------------------------------------------------------------------------
Acquisitions and disposals
Funding to joint ventures and associates (5) (15)
Repayments of funding from joint ventures and associates 6 5
Net cash inflow (outflow) from acquisitions and disposals 1 (10)
---------------------------------------------------------------------------------------------------------------------
Equity dividends paid (53) -
Net cash inflow before management of liquid resources and financing 678 418
---------------------------------------------------------------------------------------------------------------------
Management of liquid resources 16c (511) 1
---------------------------------------------------------------------------------------------------------------------
Financing
Proceeds from issue of Ordinary Shares 20 5
Purchase of own shares for ESOP (22) -
Capital element of finance lease payments 16b (1) (2)
Net decrease in debt due after more than one year 16b (75) (425)
Net cash outflow from financing (78) (422)
---------------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash 16c 89 (3)
---------------------------------------------------------------------------------------------------------------------
Decrease in net debt 16c 676 423
---------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of this consolidated cash flow
statement.
British Sky Broadcasting Group plc
Notes
1. Turnover
2004 2003
GBPm GBPm
(audited) (audited)
Direct-to-home subscribers 2,660 2,341
Cable subscribers 215 202
Advertising 312 284
Interactive 307 218
Other 162 141
3,656 3,186
---------------------------------------------------------------------------------------------------------------------
2. Operating expenses, net
Before
Before Goodwill goodwill and Goodwill
goodwill and and exceptional and 2003
exceptional exceptional 2004 items exceptional Total
items items Total as restated items as restated
GBPm GBPm GBPm GBPm GBPm GBPm
(audited) (audited) (audited) (audited) (audited) (audited)
Programming (i) 1,711 - 1,711 1,604 - 1,604
Transmission and related functions(i) 146 - 146 143 - 143
Marketing 396 - 396 400 - 400
Subscriber management 371 - 371 324 - 324
Administration 257 119 376 243 116 359
Betting 175 - 175 108 - 108
3,056 119 3,175 2,822 116 2,938
---------------------------------------------------------------------------------------------------------------------
(i) The amounts shown are net of GBP11 million (2003: GBP12 million) receivable
from the disposal of programming rights not acquired for use by the Group, and
GBP28 million (2003: GBP26 million) in respect of the provision to third party
broadcasters of spare transponder capacity.
3. Share of joint ventures' and associates' operating results
Goodwill
A credit of GBP11 million arose on the write back of negative goodwill which had
arisen on the acquisition of an additional 16.7% stake in Attheraces Holdings
Limited in April 2004, taking the Group's stake in Attheraces to 50%. The
remaining net GBP1 million charge relates to amortisation of goodwill arising on
the acquisition of certain joint ventures and associates.
4. Exceptional items
Credit Taxation Credit Taxation
before (charge) 2004 (charge) (charge) 2003
taxation credit Total taxation credit Total
GBPm GPBm GBPm GBPm GBPm GBPm
(audited) (audited) (audited)(audited) (audited) (audited)
Release of provision against ITV Digital programming - - - 5 (2) 3
debtors (iii)
Exceptional operating items - - - 5 (2) 3
---------------------------------------------------------------------------------------------------------------------
Profit on disposal of fixed asset investments (i) 51 - 51 - - -
Amounts written back to (written off) fixed asset 24 - 24 (15) - (15)
investments, net (ii),(iv)
Recognition of deferred tax asset (v) - - - - 123 123
Total exceptional items 75 - 75 (10) 121 111
---------------------------------------------------------------------------------------------------------------------
2004
Other exceptional items
(i) Profit on disposal of fixed asset 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 profit 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.
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.
(ii) Amounts written back to (written off) fixed asset investments, net
The Group reduced its provision against its minority equity investments in
football clubs by GBP33 million, due to 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 of GBP9 million 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
item to which it was attributed.
2003
Exceptional operating items
(iii) ITV Digital
The Group provided in full against all unprovided balances owed by ITV Digital,
following the announcement by the joint administrators of ITV Digital on 30
April 2002 of the closure of pay television services on the platform and their
intention to close the administration. During 2003, the Group received GBP5
million from ITV Digital's administrators and released GBP5 million of its
exceptional operating provision accordingly. The reduction is recorded as an
exceptional item within operating profit due to the distortion that its
inclusion within operating expenses would have on the individual operating
expenses line item to which it was attributed.
Other exceptional items
(iv) 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
million. Subsequently, the Group reduced its provision against its investment in
Chelsea Village plc at 30 June 2003 by GBP3 million, following the agreement to
sell its minority investment in July 2003. The reduction is recorded as an
exceptional item within operating profit due to the distortion that its
inclusion within operating expenses would have on the individual operating
expenses line item to which it was attributed.
At 31 December 2002, the Group reduced its deferred revenue balance relating to
minority investments in new media companies by GBP5 million, and reduced both
its investment and its provision against the investment in these companies
accordingly. The reduction 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 item to which it was attributed.
At 31 December 2002, the Group made a provision against its investment in Open
TV shares, leading to a non-cash exceptional charge of GBP3 million, bringing
the carrying value of the Group's investment in Open TV to nil. During February
and March 2003, the Group disposed of its entire investment in Open TV shares,
leading to a nil profit or loss on disposal. The 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
item to which it was attributed.
(v) Recognition of deferred tax asset
At 30 June 2003, 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 was sufficient evidence to support the
recognition of a deferred tax asset arising on losses incurred in the Company.
Accordingly, a deferred tax credit of GBP123 million was recognised as an
exceptional item. The credit is recorded as an exceptional item due to the
distortion that its inclusion within taxation would have on that line item.
5. Interest
(a) Interest receivable and similar income
2004 2003
GBPm GBPm
(audited) (audited)
Group
Interest receivable on cash and liquid resources 8 2
Other interest receivable and similar income 1 1
9 3
---------------------------------------------------------------------------------------------------------------------
Joint ventures and associates
Share of joint ventures' and associates' interest receivable 1 1
---------------------------------------------------------------------------------------------------------------------
Total interest receivable and similar income 10 4
---------------------------------------------------------------------------------------------------------------------
(b) Interest payable and similar charges
2004 2003
GBPm GBPm
(audited) (audited)
Group
On bank loans, overdrafts and other loans repayable within five years, not by
instalments:
- GBP200 million revolving credit facility ("RCF") (i) 2 2
- GBP750 million RCF (ii) - 27
- GBP600 million RCF (ii) 6 4
US$650 million of 8.200% Guaranteed Notes, repayable in 2009 30 31
GBP100 million of 7.750% Guaranteed Notes, repayable in 2009 8 8
US$600 million of 6.875% Guaranteed Notes, repayable in 2009 30 30
US$300 million of 7.300% Guaranteed Notes, repayable in 2006 14 14
Finance lease interest - 1
Other interest payable and similar charges - 1
90 118
----------------------------------------------------------------------------------------------------------------------
Joint ventures and associates
Share of joint ventures' and associates' interest payable 1 -
----------------------------------------------------------------------------------------------------------------------
Total interest payable and similar charges 91 118
----------------------------------------------------------------------------------------------------------------------
(i) In March 2003, the Group voluntarily cancelled GBP100 million of its
GBP300 million RCF. The remaining GBP200 million RCF expired without being
renewed on 29 June 2004.
(ii) In March 2003, the Group entered into a GBP600 million RCF. This
facility was used to cancel the previous GBP750 million RCF, which was
entered into in July 1999. The facility is available for general corporate
purposes, but was undrawn at 30 June 2004. It is due to expire in March 2008.
6. Taxation
Tax charge Tax charge
(credit) (credit) on
on profit profit before
before Exceptional exceptional Exceptional 2003
exceptional tax charge 2004 items as tax charge Total
items (credit) Total restated (credit) as restated
GBPm GBPm GBPm GBPm GBPm GBPm
(audited) (audited) (audited) (audited) (audited) (audited)
Current tax
UK corporation tax 127 - 127 85 2 87
Adjustment in respect of prior years (8) - (8) - - -
Total current tax charge 119 - 119 85 2 87
---------------------------------------------------------------------------------------------------------------------
Deferred tax
Origination and reversal of timing differences 34 - 34 (26) (123) (149)
Increase (decrease) in estimate of recoverable 5 - 5 (2) - (2)
deferred tax asset in respect of prior years
Total deferred tax charge (credit) 39 - 39 (28) (123) (151)
---------------------------------------------------------------------------------------------------------------------
Share of joint ventures' and associates' tax - - - 2 - 2
charge
---------------------------------------------------------------------------------------------------------------------
158 - 158 59 (121) (62)
---------------------------------------------------------------------------------------------------------------------
All taxation relates to UK corporation tax.
7. Equity dividends
2004 2003
(audited) (audited)
GBPm GBPm
Interim dividend paid of 2.75p (2003: nil) per Ordinary Share 53 -
Final dividend proposed of 3.25p (2003: nil) per Ordinary Share 63 -
116 -
---------------------------------------------------------------------------------------------------------------------
The ESOP has waived its rights to dividends.
8. Intangible fixed assets
The movement in the year was as follows:
Goodwill
GBPm
(audited)
Net book value at 1 July 2003 (i) 536
Amortisation charge (ii) (119)
Net book value at 30 June 2004 417
---------------------------------------------------------------------------------------------------------------------
(i) Goodwill of GBP272 million, GBP543 million and GBP5 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, which did not indicate impairment.
Consistent with Group strategy, the business plans on which these reviews were
based reflect 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.
(ii) At 30 June 2004, the Group made a provision of GBP3 million, included
within amortisation, against goodwill which arose on the acquisition of
Planetfootball.com Limited (a company which provides website services to the
sports industry), reducing the carrying value to nil. The provision was made as
a result of an impairment review which showed that the expected future cash
flows of the business would not support a carrying value for the goodwill.
9. Tangible fixed assets
The movement in the year was as follows:
Freehold Short Equipment, Assets in
land leasehold fixtures course of
and buildings improvements and fittings construction Total
GBPm GBPm GBPm GBPm GBPm
(audited) (audited) (audited) (audited) (audited)
Net book value as at 1 July 2003 36 35 246 29 346
Additions - - 61 72 133
Disposals - - (1) - (1)
Depreciation (1) (3) (98) - (102)
Net book value as at 30 June 2004 35 32 208 101 376
---------------------------------------------------------------------------------------------------------------------
10. Fixed asset investments
2003
2004 as restated
GBPm GBPm
(audited) (audited)
Investments in joint ventures and associates 33 30
Other investments 2 44
Total fixed asset investments 35 74
---------------------------------------------------------------------------------------------------------------------
11. Stocks
2004 2003
GBPm GBPm
(audited) (audited)
Television programme rights 322 337
Set-top boxes and related equipment 49 29
Raw materials and consumables 2 2
Other goods held for resale 2 2
375 370
---------------------------------------------------------------------------------------------------------------------
At least 87% (2003: 79%) of the existing television programme rights at 30 June
2004 will be amortised within one year.
12. Debtors
2004 2003
GBPm GBPm
(audited) (audited)
Amounts falling due within one year
Trade debtors 165 171
Amounts owed by joint ventures and associates 8 16
Amounts owed by other related parties 2 -
Other debtors 3 6
Prepaid programme rights 35 54
Prepaid transponder rentals 15 17
Advance corporation tax - 40
Deferred tax asset 49 31
Other prepayments and accrued income 93 59
370 394
---------------------------------------------------------------------------------------------------------------------
Amounts falling due after more than one year
Prepaid programme rights 6 3
Prepaid transponder rentals 30 49
Deferred tax asset 102 159
Other prepayments and accrued income 6 12
144 223
---------------------------------------------------------------------------------------------------------------------
13. Creditors: Amounts falling due within one year
2004 2003
GBPm GBPm
(audited) (audited)
Trade creditors 390 323
Amounts due to joint ventures and associates 8 1
Amounts due to related parties 40 25
UK corporation tax 48 28
VAT 92 62
Social security and PAYE 8 -
Proposed dividend 63 -
Defined contribution pension scheme creditor 1 1
Other creditors 60 54
Accruals and deferred income 460 473
1,170 967
---------------------------------------------------------------------------------------------------------------------
Included within trade creditors are GBP250 million (2002: GBP226 million) of US
dollar-denominated programme creditors. At least 80% (2003: 90%) of these
were covered by forward rate currency contracts.
14. Creditors: Amounts falling due after more than one year
2004 2003
GBPm GBPm
(audited) (audited)
Long-term borrowings
GBP600 million RCF - 75
US$650 million of 8.200% Guaranteed Notes, repayable in 2009 413 413
GBP100 million of 7.750% Guaranteed Notes, repayable in 2009 100 100
US$600 million of 6.875% Guaranteed Notes, repayable in 2009 367 367
US$300 million of 7.300% Guaranteed Notes, repayable in 2006 189 189
Obligations under finance leases 7 8
1,076 1,152
---------------------------------------------------------------------------------------------------------------------
Other
Accruals and deferred income 28 20
---------------------------------------------------------------------------------------------------------------------
1,104 1,172
---------------------------------------------------------------------------------------------------------------------
In March 2003, the Group entered into a GBP600 million RCF. This facility was
used to cancel a GBP750 million RCF, which had been agreed in July 1999, and can
be used for general corporate purposes. The GBP600 million facility 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 was 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 remaining GBP200 million RCF expired without being
renewed on 29 June 2004.
15. Reconciliation of movement in shareholders' funds
Movement in shareholders' funds includes all movements in reserves.
Total
equity
Shares Profit shareholders'
Share Share to be ESOP Merger Special and loss funds
capital premium issued reserve reserve reserve account (deficit)
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
(audited) (audited) (audited) (audited) (audited) (audited) (audited) (audited)
At 1 July 2003 - as previously
stated 969 2,536 3 - 299 - (3,912) (105)
Prior year adjustment - - - (35) - - (12) (47)
At 1 July 2003 as restated 969 2,536 3 (35) 299 - (3,924) (152)
---------------------------------------------------------------------------------------------------------------------
Issue of share capital 2 21 (3) - - - - 20
ESOP shares utilised - - - 27 - - 11 38
ESOP shares purchased - - - (22) - - - (22)
Profit for the financial year - - - - - - 322 322
Dividends - - - - - - (116) (116)
Share premium reduction (1,120) - - - 14 1,106 -
Transfer from merger reserve - - - - (77) - 77 -
At 30 June 2004 971 1,437 - (30) 222 14 (2,524) 90
---------------------------------------------------------------------------------------------------------------------
Share premium reduction
On 10 December 2003, the High Court approved a reduction in the Company's share
premium account of GBP1,120 million, as approved by the Company's shareholders
at the Annual General Meeting held on 14 November 2003. The reduction had the
effect of eliminating the Company's deficit on its profit and loss account as at
30 September 2003 of GBP1,106 million, and creating a non-distributable special
reserve of GBP14 million, which represents the excess of the share premium
reduction over the deficit.
Share option schemes
During the period the Company issued shares with a market value of GBP26 million
(2003: GBP6 million) in respect of the exercise of options awarded under various
share option schemes, with GBP20 million (2003: GBP5 million) received from
employees.
At 30 June 2004, the Group's ESOP held 4,747,515 Ordinary Shares in the Company
at an average value of GBP6.25 per share. The 4,339,497 shares utilised during
the period relate to the exercise of LTIP, KCP and Executive Share Option Scheme
awards. As a result of the adoption of UITF 38, the Group's ESOP shares, which
were previously held within investments, are now presented as a deduction from
shareholders' funds. In addition, the brought forward profit and loss reserve at
1 July 2003 was reduced by GBP12 million. The impact of adopting UITF 38 was
accordingly to reduce net assets at 1 July 2003 by GBP47 million, and to reduce
profit for the year to 30 June 2003 by GBP6 million.
16. Notes to consolidated cash flow statement
(a) Reconciliation of operating profit to operating cash flows
Before
goodwill
Before and Goodwill
goodwill Goodwill exceptional and
and and items excep- 2003
exceptional exceptional 2004 as tional Total
items items Total restated items as restated
GBPm GBPm GBPm GBPm GBPm GBPm
(audited) (audited) (audited) (audited) (audited) (audited)
Operating profit 600 (119) 481 364 (116) 248
Depreciation 102 - 102 98 - 98
Amortisation of goodwill and other intangible
fixed assets - 119 119 - 121 121
Loss on disposal of fixed assets 1 - 1 - - -
(Increase) decrease in stock (5) - (5) 44 - 44
Decrease in debtors 17 - 17 88 - 88
Increase in creditors 170 - 170 66 - 66
Decrease in provision (3) - (3) (1) - (1)
Net cash inflow from operating activities 882 - 882 659 5 664
---------------------------------------------------------------------------------------------------------------------
(b) Analysis of changes in net debt
At At
1 July 30 June
2003 Cash flow 2004
GBPm GBPm GBPm
(audited) (audited) (audited)
Overnight deposits 33 40 73
Other cash 14 49 63
47 89 136
---------------------------------------------------------------------------------------------------------------------
Short-term deposits - 338 338
Commercial paper - 173 173
Cash and liquid resources 47 600 647
---------------------------------------------------------------------------------------------------------------------
Debt due after more than one year (1,144) 75 (1,069)
Capital element of finance leases (8) 1 (7)
Total debt and capital element of finance
leases (1,152) 76 (1,076)
---------------------------------------------------------------------------------------------------------------------
Total net debt (1,105) 676 (429)
---------------------------------------------------------------------------------------------------------------------
(c) Reconciliation of net cash flow to movement in net debt
2004 2003
GBPm GBPm
(audited) (audited)
Increase (decrease) in cash 89 (3)
Increase (decrease) in short-term deposits 338 (1)
Increase in commercial paper 173 -
Cash outflow resulting from decrease in debt and lease financing 76 427
Decrease in net debt 676 423
---------------------------------------------------------------------------------------------------------------------
Net debt at beginning of year (1,105) (1,528)
Net debt at end of year (429) (1,105)
---------------------------------------------------------------------------------------------------------------------
16. Notes to consolidated cash flow statement (continued)
(d) Major non-cash transactions
2004
Share premium reduction
On 10 December 2003, the High Court approved a reduction in the Company's share
premium account of GBP1,120 million, as approved by the Company's shareholders
at the Annual General Meeting held on 14 November 2003. The reduction had the
effect of eliminating the Company's deficit on its profit and loss account as at
30 September 2003 of GBP1,106 million, and creating a non-distributable special
reserve of GBP14 million, which represents the excess of the share premium
reduction over the deficit.
WAPTV
On 30 September 2003, the Company issued 338,755 (2003: 169,375) Ordinary Shares
to satisfy the remaining contingent consideration in respect of the acquisition
of the remaining 5% interest in WAPTV Limited which occurred in May 2001.
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 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.
17. Post balance sheet events
Potential legal claim
The Group anticipates issuing and serving a claim in the near future for a
material amount against an information and technology solutions provider, which
had provided services to the Group as part of the Group's investment in Customer
Relationship Management ("CRM") software and infrastructure. The amount that
will be recovered by the Group will not be finally determined until resolution
of the claim.
Capital investment programme
The Group intends to invest an additional approximately GBP450 million on
capital expenditure over the four years to 30 June 2008, in order to support its
long-term growth. This is in addition to ongoing core maintenance capital
expenditure which is expected to remain at about GBP100 million per annum over
the same period. The additional expenditure will principally relate to
enhancement of Sky's Osterley campus, a new call centre and training facility,
and continuation of the current CRM and Advanced Technology Centre projects.
18. Basis of presentation
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.
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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 2004 has been extracted from the statutory accounts of
British Sky Broadcasting Group plc for the year ended 30 June 2004, which have
not yet been filed with the Registrar of Companies, but on which the auditors
gave an unqualified report, and which did not contain a statement under section
237 (2) or (3) of the Companies Act 1985, on 3 August 2004. The preliminary
announcement was approved by the Board of Directors on 3 August 2004.
The financial information for the three months ended 30 June 2004 and
30 June 2003 is unaudited.
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, with the exception of the restatement arising from the
change in accounting policy described above. The statutory accounts on which the
auditors gave an unqualified report and which did not contain a statement under
section 237 (2) or (3) of the Companies Act 1985, have been filed with the
registrar of Companies.
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: 4 August 2004 By: /s/ Dave Gormley
Dave Gormley
Company Secretary