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 2006
1 February 2006
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 of Press release of British Sky Broadcasting Group plc
announcing Interim Results released on 1 February 2006
British Sky Broadcasting Group plc
Consolidated Income Statement for the half year ended 31 December 2005
------------------------------------------------------------------------------------------------------------------------------
2005/06 2004/05 2004/05
Half year Half year Full year
GBPm GBPm GBPm
Notes (unaudited) (unaudited) (audited)
------------------------------------------------------------------------------------------------------------------------------
Revenue 2 2,136 1,957 4,071
Operating expenses 3 (1,722) (1,601) (3,249)
Operating profit 414 356 822
------------------------------------------------------------------------------------------------------------------------------
Share of results of joint ventures and associates 7 8 14
Investment income 20 15 29
Finance costs (51) (45) (87)
Profit on disposal of joint venture - 9 9
Profit before tax 390 343 787
------------------------------------------------------------------------------------------------------------------------------
Taxation 4 (116) (98) (209)
Profit for the period 274 245 578
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
Earnings per share from profit for the period
Basic and diluted (in pence) 5 14.9p 12.7p 30.2p
------------------------------------------------------------------------------------------------------------------------------
All profit for the period is attributable to equity holders of the parent.
All results relate to continuing operations.
The accompanying notes are an integral part of this consolidated income
statement.
Consolidated Income Statement for the quarter ended 31 December 2005
2005/06 2004/05
Three months Three months
ended 31 December ended 31
December
2005 2004
GBPm GBPm
(unaudited) (unaudited)
------------------------------------------------------------------------------------------------------------------
Revenue 1,113 1,009
Operating expenses (914) (842)
Operating profit 199 167
------------------------------------------------------------------------------------------------------------------
Share of results of joint ventures and associates 5 7
Investment income 12 8
Finance costs (26) (24)
Profit on disposal of joint venture - 9
Profit before tax 190 167
------------------------------------------------------------------------------------------------------------------
Taxation (56) (44)
Profit for the period 134 123
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
Earnings per share from profit for the period
Basic and diluted (in pence) 7.3p 6.4p
------------------------------------------------------------------------------------------------------------------
All profit for the period is attributable to equity holders of the parent.
All results relate to continuing operations.
Consolidated Statement of Recognised Income and Expense for the half year ended 31 December 2005
-------------------------------------------------------------------------------------------------------------------------------
2005/06 2004/05 2004/05
Half year Half year Full year
GBPm GBPm GBPm
(unaudited) (unaudited) (audited)
-------------------------------------------------------------------------------------------------------------------------------
Profit for the period 274 245 578
-------------------------------------------------------------------------------------------------------------------------------
Unrealised gains (losses) arising during the period
Cash flow hedges 19 (78) (22)
Tax on cash flow hedges (6) 23 6
13 (55) (16)
-------------------------------------------------------------------------------------------------------------------------------
Reclassified and reported in profit for the period
(Gains) losses on cash flow hedges (18) 54 4
Tax on cash flow hedges 6 (16) (1)
(12) 38 3
-------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) not recognised in the Income Statement 1 (17) (13)
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
Total recognised income for the period 275 228 565
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
All recognised income for the period is attributable to equity holders of the
parent.
Consolidated Balance Sheet as at 31 December 2005
-----------------------------------------------------------------------------------------------------------------------------
31 December 31 December 30 June
2005 2004 2005
GBPm GBPm GBPm
Notes (unaudited) (unaudited) (audited)
-----------------------------------------------------------------------------------------------------------------------------
Non-current assets
Goodwill 417 417 417
Intangible assets 221 169 202
Property, plant and equipment 349 283 335
Investments in joint ventures and associates 29 25 23
Available for sale investments 52 2 2
Derivative financial assets 13 8 9
Deferred tax assets 79 131 105
1,160 1,035 1,093
-----------------------------------------------------------------------------------------------------------------------------
Current assets
Inventories 568 599 321
Trade and other receivables 389 375 331
Derivative financial assets 29 2 14
Short-term deposits 764 65 194
Cash and cash equivalents 889 642 503
2,639 1,683 1,363
-----------------------------------------------------------------------------------------------------------------------------
Total assets 3,799 2,718 2,456
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
Current liabilities
Borrowings 174 - -
Trade and other payables 1,376 1,242 1,031
Derivative financial liabilities 26 41 6
Current tax liabilities 116 110 100
Provisions 6 1 13
1,698 1,394 1,150
-----------------------------------------------------------------------------------------------------------------------------
Non-current liabilities
Borrowings 1,854 911 982
Other payables 23 27 25
Derivative financial liabilities 80 173 112
1,957 1,111 1,119
-----------------------------------------------------------------------------------------------------------------------------
Total liabilities 3,655 2,505 2,269
-----------------------------------------------------------------------------------------------------------------------------
Shareholders' equity 7 144 213 187
-----------------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity 3,799 2,718 2,456
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of this consolidated balance sheet.
Consolidated Cash Flow Statement for the half year ended 31 December 2005
-----------------------------------------------------------------------------------------------------------------------------
2005/06 2004/05 2004/05
Half year Half year Full year
GBPm GBPm GBPm
Notes (unaudited) (unaudited) (audited)
-----------------------------------------------------------------------------------------------------------------------------
Cash flows from operating activities
Cash generated from operations 8a 514 407 989
Interest received 16 17 28
Taxation paid (76) (28) (103)
(Increase) decrease in short-term deposits (570) 71 (60)
Net cash (used in) from operating activities (116) 467 854
-----------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities
Funding to joint ventures and associates (2) (4) (4)
Repayments of funding from joint ventures and associates 1 6 8
Dividends received from joint ventures and associates 3 7 12
Proceeds from the sale of a joint venture - 14 14
Purchase of property, plant and equipment (58) (60) (149)
Purchase of intangible assets (36) (63) (92)
Purchase of available-for-sale investments (51) - -
Proceeds from the sale of equity investments - - 1
Net cash used in investing activities (143) (100) (210)
-----------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities
Proceeds from issue of guaranteed notes 8b 1,014 - -
Proceeds from disposal of shares in Employee Share Ownership Plan
("ESOP") 7 2 4
Purchase of own shares for ESOP - - (14)
Share buy-back (240) (128) (416)
Interest paid (44) (49) (91)
Dividends paid to shareholders (92) (63) (138)
Net cash from (used in) financing activities 645 (238) (655)
-----------------------------------------------------------------------------------------------------------------------------
Effect of foreign exchange rate changes - - 1
Net increase (decrease) in cash and cash equivalents 8b 386 129 (10)
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of this consolidated cash flow
statement.
Notes to the interim accounts
1 Basis of preparation
The interim accounts for the half year ended 31 December 2005 were approved by
the Board of Directors on 31 January 2006. The 2006 Annual Report & Accounts
will contain the Group's first full financial statements prepared in accordance
with International Financial Reporting Standards ("IFRS") as adopted for use in
the European Union ("EU"). Accordingly, the unaudited accounts for the half year
ended 31 December 2005 and the restatement of financial information for the year
ended 30 June 2005 and the half year ended 31 December 2004 have been prepared
in accordance with IFRS issued by the International Accounting Standards Board
("IASB") as adopted by the EU.
The Group maintains a 52 or 53 week fiscal year ending on the Sunday nearest to
30 June in each year. In fiscal year 2006, this date will be 2 July 2006, this
being a 52 week year (Fiscal Year 2005: 3 July 2005, 53 week year). This interim
report is prepared to 1 January 2006, being the first 26 weeks of the 52 week
year (Fiscal Year 2005: 26 weeks of the 53 week year). For convenience purposes,
the Group continues to date its interim report as of 31 December 2005.
The IFRS information for the year ended 30 June 2005 was derived from
information extracted from the statutory financial statements prepared under UK
GAAP and filed with the Registrar of Companies. The auditors' report on these
accounts was unqualified and did not contain any statement under section 237(2)
or (3) of the Companies Act 1985. The restated IFRS information for the year
ended 30 June 2005 does not constitute statutory accounts as defined in Section
240 of the Companies Act 1985.
The unaudited interim accounts for the half year ended 31 December 2005 do not
constitute statutory accounts as defined in Section 240 of the Companies Act
1985.
2 Revenue
--------------------------------------------------------------------------------------------------------------------------------
2005/06 2004/05 2004/05
Half year Half year Full year
GBPm GBPm GBPm
(unaudited) (unaudited) (audited)
-------------------------------------------------------------------------------------------------------------------------------
DTH subscribers 1,554 1,426 2,968
Cable subscribers 112 109 219
Advertising 171 159 329
Sky Bet 136 118 261
Sky Active 46 46 92
Other 117 99 202
2,136 1,957 4,071
-------------------------------------------------------------------------------------------------------------------------------
3 Operating expenses
-------------------------------------------------------------------------------------------------------------------------------
2005/06 2004/05 2004/05
Half year Half year Full year
GBPm GBPm GBPm
(unaudited) (unaudited) (audited)
-------------------------------------------------------------------------------------------------------------------------------
Programming 810 806 1,635
Transmission and related functions 87 87 171
Marketing 332 264 527
Subscriber management 215 193 385
Administration 154 145 295
Betting 124 106 236
1,722 1,601 3,249
-------------------------------------------------------------------------------------------------------------------------------
4 Taxation
Taxation recognised in the income statement
--------------------------------------------------------------------------------------------------------------------------------
2005/06 2004/05 2004/05
Half year Half year Full year
charge charge charge
GBPm GBPm GBPm
(unaudited) (unaudited) (audited)
--------------------------------------------------------------------------------------------------------------------------------
Current tax expense
Current year 93 73 163
Adjustment in respect of prior years - (8) (8)
Total current tax 93 65 155
--------------------------------------------------------------------------------------------------------------------------------
Deferred tax expense
Origination and reversal of temporary differences 23 32 71
Adjustment in respect of prior years - 1 (17)
Total deferred tax 23 33 54
--------------------------------------------------------------------------------------------------------------------------------
Taxation 116 98 209
--------------------------------------------------------------------------------------------------------------------------------
At 31 December 2005 a deferred tax asset of GBP14 million (2004/05: half year
GBP12 million; full year GBP14 million) principally arising from UK losses in
the Group has not been recognised as these losses can be offset only against
taxable profits generated in the entities concerned. There is currently
insufficient evidence to support recognition of a deferred tax asset relating to
these losses.
A deferred tax asset of GBP64 million (2004/05: 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 on the basis that it is not
probable that these temporary differences will reverse.
A deferred tax asset of GBP330 million (2004/05: half year GBP450 million; full
year GBP330 million) has not been recognised in respect of potential capital
losses related to the Group's holding of KirchPayTV, on the basis that these
temporary differences do not meet the criteria of a reversal being probable. The
Group has realised and unrealised capital losses in respect of football club and
other investments estimated to be in excess of GBP24 million (2004/05: half year
GBP25 million; full year GBP24 million) which have not been recognised as a
deferred tax asset, on the basis that it is not probable that they will be
utilised.
5 Earnings per share
Basic earnings per share represents profit for the period, 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 for the period, 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 Ordinary Shares outstanding during the period.
The weighted average number of shares was:
----------------------------------------------------------------------------------------------------------------------------
2005/06 2004/05 2004/05
Half year Half year Full year
Millions of Millions of Millions of
shares shares shares
(unaudited) (unaudited) (audited)
----------------------------------------------------------------------------------------------------------------------------
Ordinary Shares 1,849 1,939 1,917
ESOP trust Ordinary Shares (4) (4) (4)
Basic shares 1,845 1,935 1,913
----------------------------------------------------------------------------------------------------------------------------
Dilutive Ordinary Shares from share options 2 2 4
Diluted shares 1,847 1,937 1,917
----------------------------------------------------------------------------------------------------------------------------
The calculation of diluted earnings per share excludes 34 million share options
(2004/05: half year 41 million; full year 37 million), which could potentially
dilute earnings per share in the future, because they were anti-dilutive for the
period since the expected future proceeds from the options exceeded the average
fair value of shares during the period.
6 Equity dividends
----------------------------------------------------------------------------------------------------------------------------
2005/06 2004/05 2004/05
Half year Half year Full year
GBPm GBPm GBPm
(unaudited) (unaudited) (audited)
----------------------------------------------------------------------------------------------------------------------------
2004/05 Interim dividend paid: 4.0p per Ordinary Share - - 77
2004/05 Final dividend paid: 5.0p per Ordinary Share (2003/04: 3.25p) 92 63 63
92 63 140
----------------------------------------------------------------------------------------------------------------------------
The proposed interim dividend for the half year ended 31 December 2005 of 5.5
pence per Ordinary Share, was approved by the Directors, and was recognised as a
GBP100 million liability, on 31 January 2006. It will be paid on 25 April 2006
to shareholders of record on 31 March 2006.
The ESOP has waived its rights to dividends.
7 Reconciliation of movement in shareholders' equity
----------------------------------------------------------------------------------------------------------------------------
Capital Total
Share Share redemption Special ESOP Merger Hedging Retained shareholders'
capital Premium reserve reserve reserve reserve reserve earnings equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------------------------------------------------------------------------------------------------------
At 1 July 2004 971 1,437 - 14 (30) 222 (1) (2,447) 166
Share buyback (37) - 37 - - - - (416) (416)
Recognition and - - - - - - (18) - (18)
transfer of cash
flow hedges
Share-based - - - - (2) - - 17 15
payments
Tax on items taken - - - - - - 5 (3) 2
directly to equity
Profit for the year - - - - - - - 578 578
Dividends - - - - - - - (140) (140)
At 1 July 2005 934 1,437 37 14 (32) 222 (14) (2,411) 187
Share buyback (23) - 23 - - - - (240) (240)
Recognition and - - - - - - 1 - 1
transfer of cash
flow hedges
Share-based - - - - 15 - - 1 16
payments
Tax on items taken - - - - - - - (2) (2)
directly to equity
Profit for the - - - - - - 274 274
period
Dividends - - - - - - (92) (92)
At 31 December 2005 911 1,437 60 14 (17) 222 (13) (2,470) 144
----------------------------------------------------------------------------------------------------------------------------
The period from 1 July 2004 to 30 June 2005 is audited. The period from 1 July
2005 to 31 December 2005 is unaudited.
Share option schemes
At 31 December 2005, the Group's ESOP held 2,991,441 Ordinary Shares in the
Company at an average cost of GBP5.79 per share. During the period, 2,617,771
shares were utilised relating to the exercise of Long Term Incentive Plan,
Equity Bonus Plan, Key Contributor Plan, Executive Share Option Scheme and
Sharesave 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 million Ordinary
Shares. On 4 November 2005, the Company's shareholders approved a resolution at
the Annual General Meeting for the Company to further purchase up to 92 million
Ordinary Shares. Under the former resolution, during the year ended 30 June
2005, the Company purchased, and subsequently cancelled, 74 million Ordinary
Shares at an average price of 560 pence per share, with a nominal value of GBP37
million, for a consideration of GBP416 million. This represents 4% of called-up
share capital at the beginning of the year. During the half year ended 31
December 2005 the Company purchased, and subsequently cancelled, 45 million
Ordinary Shares at an average price of 528 pence per share, with a nominal value
of GBP23 million, for a consideration of GBP240 million. This represents 2% of
called-up share capital at the beginning of the half year period under review.
8 Notes to consolidated cash flow statement
a) Reconciliation of profit before taxation to cash generated from operations
------------------------------------------------------------------------------------------------------------------------------
2005/06 2004/05 2004/05
Half year Half year Full year
GBPm GBPm GBPm
(unaudited) (unaudited) (audited)
------------------------------------------------------------------------------------------------------------------------------
Profit before taxation 390 343 787
Adjustments for:
Depreciation of property, plant and equipment 36 20 47
Amortisation of intangible assets 20 28 45
Loss on disposal of property, plant and equipment - - 2
Profit on disposal of joint venture - (9) (9)
Net finance costs 31 30 58
Share of results of joint ventures and associates (7) (8) (14)
470 404 916
------------------------------------------------------------------------------------------------------------------------------
(Increase) decrease in trade and other receivables (54) (13) 34
(Increase) decrease in inventories (211) 275 28
Increase (decrease) in trade and other payables 312 (248) (67)
(Decrease) increase in provisions (7) - 12
Decrease (increase) in derivative financial instruments 4 (11) 66
Cash generated from operations 514 407 989
------------------------------------------------------------------------------------------------------------------------------
b) Analysis of movements in net debt
----------------------------------------------------------------------------------------------------------------------------
As at As at At 31
1 July Cash Non-cash 1 July Cash Non-cash December
2004 movements movements 2005 movements movements 2005
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
(audited) (audited) (audited) (audited) (unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents 513 (11) 1 503 386 - 889
Short-term deposits 134 60 - 194 570 - 764
647 49 1 697 956 - 1,653
----------------------------------------------------------------------------------------------------------------------------
Borrowings (958) - (24) (982) (1,014) (32) (2,028)
Borrowings-related derivative
financial instruments (99) - (4) (103) - 20 (83)
Net debt (410) 49 (27) (388) (58) (12) (458)
----------------------------------------------------------------------------------------------------------------------------
On 20 October 2005, the Group issued guaranteed notes (the "new notes")
consisting of US $750 million aggregate principal amount of notes paying 5.625%
interest and maturing on 15 October 2015, US $350 million aggregate principal
amount of notes paying 6.500% interest and maturing on 15 October 2035 and
GBP400 million aggregate principal amount of notes paying 5.750% interest and
maturing on 20 October 2017. The new notes are carried in the balance sheet at
GBP1,024 million at 31 December 2005.
In accordance with the Group's treasury policy, various cross-currency swap
agreements have been entered into to swap the Group's exposure from the new
notes into pounds sterling. In addition, the Group has entered into pound
sterling interest rate swap agreements, which provide for the exchange, at
specified intervals, of the difference between fixed rates and variable rates,
calculated by reference to an agreed notional pounds sterling amount. The total
fair value of new cross-currency swap and interest rate swap agreements
associated with the new notes carried on the balance sheet at 31 December 2005
is GBP10 million.
9 Other matters
Events after the balance sheet date
On 21 October 2005, Sky Broadband Services Limited ("Sky Broadband"), a
subsidiary of British Sky Broadcasting Group plc, made a recommended cash offer
for the entire issued and to be issued share capital of Easynet Group plc
("Easynet"). On 6 January 2006, the offer was declared unconditional in all
respects. On 12 January 2006, Sky Broadband had received valid acceptances of
the offer in respect of more than nine-tenths in value of Easynet shares to
which the offer related and implemented the procedure set out in sections 428 to
430F of the Companies Act 1985 to acquire compulsorily those shares which had
not been assented to the offer. As of 31 January 2006, Sky Broadband has
acquired or received valid acceptances under the offer for 99% of the existing
issued share capital of Easynet.
Contingent liabilities
The Group has contingent liabilities by virtue of its investments in unlimited
companies, or partnerships, which include Nickelodeon UK, The History Channel
(UK), Paramount UK and National Geographic Channel UK.
The Directors do not expect any material loss to arise from the above contingent
liabilities.
Contingent assets
Under the terms of one of the Group's channel distribution agreements, British
Sky Broadcasting Limited is entitled to receive a payment (unless the agreement
is terminated due to the default of the Group), between July and September 2006,
equal to a proportion of the fair value of certain of the channels under that
distribution agreement. The fair value of the channels is to be determined at
the earlier of contract termination and 30 June 2006. Accordingly, it is not yet
possible to determine the value of the payment to be received.
The Group has served a claim for a material amount against an information and
technology services provider, which 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.
Changes in estimates
There have been no material changes in estimates of amounts reported in the six
months ended 31 December 2005 or in the year ended 30 June 2005.
10 Regulatory update
European Commission Investigation - Football Association Premier League Limited
("FAPL")
The European Commission's investigation into the FAPL's joint selling of
exclusive broadcast rights to football matches is close to being concluded: the
Commission published a notice on 30 April 2004 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
addressed the next auction of rights by the FAPL for the 2007/08 and subsequent
seasons and included a commitment that no single broadcaster would be able to
buy all of the packages of live rights.
In November 2005 the Commission announced that it had received improved
commitments from the FAPL and that these revised commitments addressed points
raised in the public consultation, including: specifying the precise terms of
the "no single buyer" rule and the conduct of the auction process; the creation
of more evenly balanced packages of rights; and increasing the availability of
rights to broadcast via mobile phones.
The Commission has stated that it will prepare a draft decision rendering the
revised commitments legally binding. This will be sent to the competition
authorities of Member States for consultation, following which the Commission
will issue a final decision, no later than the first quarter of 2006.
The Commission confirmed in 2004 in a "comfort letter" that, on the basis of
performance by the Group of certain commitments given by the Group to the
Commission, it has fully and finally settled the Commission's other
investigations in connection with the Group's bids for all rights in relation to
FAPL matches throughout the 2004/05 to 2006/07 FAPL seasons and any resulting
agreements between the Group and FAPL.
European Commission Sector Inquiry - "New Media" Sports Rights
In September 2005, the European Commission published its concluding report on
its sector inquiry into the provision of audio-visual content from sports events
over 3G networks, which it had initiated in January 2004.
The European Commission has identified a number of commercial practices which it
considers raise competition concerns in relation to the availability of mobile
sports content and on which it states that it will focus in the future. Among
others, these include: (i) the sale of what the European Commission considers to
be bundled audiovisual rights for various retail platforms to one or a few
operators, in relation to which the European Commission has said that it will
target situations where rights to premium sports remain under-exploited through
such bundled sale of rights and subsequent warehousing of rights by powerful
operators; and (ii) restricting the length and timing of 3G transmissions of
sports coverage, which the European Commission considers may have a negative
impact on the value of 3G rights and the take-up of 3G sports services by
consumers.
The European Commission has stated that it will take account of the findings of
the sector inquiry in future proceedings in this area. It has also stated that
it will further review, together with the relevant national competition
authorities of Member States, potentially harmful situations identified during
the sector inquiry, and that procedures will be initiated in cases where
behavior is not adjusted to comply with the requirements of competition law.
The European Commission has not announced any proceedings arising from
situations identified in the sector inquiry or publicly indicated which
individual companies might be the subject of proceedings. At this stage, the
Group is unable to determine whether the European Commission's concluding report
or any subsequent proceedings might have a material effect on the Group.
10 Regulatory update (continued)
Ofcom review of conditional access guidelines
In May 2005, the Office of Communications ("Ofcom") initiated a review of its
guidelines entitled "The pricing of conditional access services and related
issues". These guidelines, which were originally adopted by the Office of
Telecommunications (Oftel) in May 2002, set out Ofcom's policy towards the
regulation of the supply of conditional access (and access control) services
(including the structure of tariffs charged for such services).
In November 2005, Ofcom published a consultation document as part of this review
entitled "Provision of Technical Platform Services - a consultation on proposed
guidance as to how Ofcom may interpret the meaning of "fair, reasonable and
non-discriminatory" and other regulatory conditions when assessing charges and
terms offered by regulated providers of Technical Platform Services". The
deadline for comments on this consultation document is 1 February 2006. The
Group is co-operating with this review and at this stage, is unable to determine
whether the review will have a material effect on the Group.
11 UK GAAP to IFRS reconciliations
The following is a summary of the effects of the adjustments from UK GAAP to
IFRS for the half year ended 31 December 2004.
-----------------------------------------------------------------------------------------------------------------------------
2004/05
Half year
GBPm
(unaudited)
-----------------------------------------------------------------------------------------------------------------------------
Profit for the period under UK GAAP 154
Adjustments:
Goodwill amortisation 57
Profit on disposal of joint venture 32
Financial instruments and hedge accounting 10
Share-based payments (6)
Tax impact of IFRS adjustments (2)
Profit for the period under IFRS 245
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
31 December
2004
GBPm
(unaudited)
-----------------------------------------------------------------------------------------------------------------------------
Shareholders' equity under UK GAAP 83
Adjustments:
Goodwill amortisation 57
Deferred taxation 10
Share-based payment 19
Financial instruments and hedge accounting (36)
Joint ventures 3
Dividend accrual 77
Shareholders' equity under IFRS 213
-----------------------------------------------------------------------------------------------------------------------------
There were no material adjustments to the cash flow statement for the half year
ended 31 December 2004.
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: 1 February 2006 By: /s/ Dave Gormley
Dave Gormley
Company Secretary