FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934
For the month of July 2006
28 July 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 Press release of British Sky Broadcasting Group plc
announcing US Accounting Release released on
28 July 2006
Consolidated Income Statement for the year ended 30 June 2006
Notes 2006 2005
GBPm GBPm
Revenue 1 4,148 3,842
Operating expense 2 (3,271) (3,020)
Operating profit 877 822
Share of results of joint ventures and 11 12 14
associates
Investment income 3 52 29
Finance costs 3 (143) (87)
Profit on disposal of joint venture 4 - 9
Profit before tax 798 787
Taxation 5 (247) (209)
Profit for the year 551 578
Earnings per share (in pence) from profit
for the year
Basic 6 30.2p 30.2p
Diluted 6 30.1p 30.2p
Consolidated Income Statement for the quarter ended 30 June 2006
Three Three
months months
ended 30 ended 30
June 2006 June 2005
GBPm GBPm
(unaudited) (unaudited)
Revenue 1,069 1,029
Operating expense (852) (780)
Operating profit 217 249
Share of results from joint ventures
and associates 3 3
Investment income 15 7
Finance costs (46) (18)
Profit before tax 189 241
Taxation (63) (48)
Profit for the quarter 126 193
Earnings per share (in pence) from profit for
the quarter
Basic and diluted 7.0p 10.3p
Consolidated Statement of Recognised Income and Expense
for the year ended 30 June 2006
2006 2005
GBPm GBPm
Profit for the year 551 578
Net movements in hedging reserve
Cash flow hedges (54) (18)
Tax on cash flow hedges 16 5
(38) (13)
Total recognised income and expense for the year 513 565
Consolidated Balance Sheet as at 30 June 2006
Notes 2006 2005
GBPm GBPm
Non-current assets
Goodwill 8 623 417
Intangible assets 9 218 202
Property, plant and equipment 10 519 335
Investments in joint ventures and 11 28 23
associates
Available for sale investments 2 2
Deferred tax assets 12 100 105
Derivative financial assets - 9
1,490 1,093
Current assets
Inventories 13 324 321
Trade and other receivables 14 489 331
Short-term deposits 647 194
Cash and cash equivalents 816 503
Derivative financial assets 7 14
2,283 1,363
Total assets 3,773 2,456
Current liabilities
Borrowings 17 163 -
Trade and other payables 15 1,247 1,031
Current tax liabilities 68 100
Provisions 16 6 13
Derivative financial liabilities 49 6
1,533 1,150
Non-current liabilities
Borrowings 17 1,825 982
Other payables 17 66 25
Provisions 16 19 -
Derivative financial liabilities 209 112
2,119 1,119
Total liabilities 3,652 2,269
Shareholders' equity 19 121 187
Total liabilities and shareholders'
equity 3,773 2,456
Consolidated Cash Flow Statement for the year ended 30 June 2006
2006 2005
GBPm GBPm
Cash flows from operating activities
Cash generated from operations 1,004 989
Interest received 43 28
Taxation paid (172) (103)
Net cash from operating activities 875 914
Cash flows from investing activities
Dividends received from joint ventures and
associates 7 12
Funding to joint ventures and associates (3) (4)
Repayments of funding from joint ventures
and associates 1 8
Proceeds from the sale of a joint venture - 14
Purchase of property, plant and equipment (169) (149)
Purchase of intangible assets (43) (92)
Proceeds from the sale of equity investments - 1
Increase in short-term deposits (453) (60)
Purchase of subsidiaries (net of cash and cash
equivalents purchased) (209) -
Net cash used in investing activities (869) (270)
Cash flows from financing activities
Proceeds from issue of Guaranteed Notes 1,014 -
Proceeds from disposal of shares in Employee Share
Ownership Plan ("ESOP") 13 4
Purchase of own shares for ESOP (17) (14)
Purchase of own shares for cancellation (408) (416)
Interest paid (105) (91)
Dividends paid to shareholders (191) (138)
Net cash from (used in) financing activities 306 (655)
Effect of foreign exchange rate movements 1 1
Net increase (decrease) in cash and cash
equivalents 313 (10)
Cash and cash equivalents at the beginning
of the year 503 513
Cash and cash equivalents at the end of the 816 503
year
Notes to the consolidated financial statements
The financial information set out in this preliminary announcement does not
constitute statutory financial statements for the years ended 30 June 2006 or
2005, for the purpose of the Companies Act 1985, but it is derived from those
financial statements. Statutory financial statements for 2005 have been filed
with the Registrar of Companies and those for 2006 will be filed prior to the
Group's next annual general meeting. The Group's auditors have reported on those
accounts; their reports were unqualified and did not contain statements under s.
237(2) or (3) Companies Act 1985.
Whilst the financial information included in this preliminary announcement has
been prepared in accordance with International Financial Reporting Standards
("IFRS"), this announcement does not itself contain sufficient information to
comply with IFRS.
1. Revenue
2006 2005
GBPm GBPm
Direct-to-home ("DTH")
subscribers 3,154 2,968
Cable subscribers 224 219
Advertising 342 329
Sky Bet 37 32
Sky Active 91 92
Other 300 202
4,148 3,842
2. Operating expense
2006 2005
GBPm GBPm
Programming 1,599 1,635
Transmission and related
functions 234 171
Marketing 622 527
Subscriber management 468 392
Administration 348 295
3,271 3,020
3. Investment income and finance costs
2006 2005
GBPm GBPm
Investment income
Investment income from cash, cash equivalents and
short-term 52 29
deposits
2006 2005
GBPm GBPm
Finance costs
- Interest payable and similar charges
GBP600 million RCF - (4)
GBP1 billion revolving credit facility ("RCF") (2) (2)
Guaranteed Notes (123) (84)
Finance lease interest (4) (1)
(129) (91)
- Other finance (expense) income
Remeasurement of borrowings-related derivative
financial instruments (not qualifying for
hedge accounting) (10) 5
Remeasurement of programming-related derivative financial
instruments (not qualifying for hedge accounting) (4) (1)
(14) 4
(143) (87)
4. Profit on disposal of joint venture
In November 2004, the Group sold its 49.5% investment in Granada Sky
Broadcasting for GBP14 million in cash, realising a profit on disposal of GBP9
million. The Group realised no profit or loss on disposal during the year ended
30 June 2006.
5. Taxation
Taxation recognised in the income statement
2006 2005
GBPm GBPm
Current tax expense
Current year 147 163
Adjustment in respect of prior years (6) (8)
Total current tax charge 141 155
Deferred tax expense
Origination and reversal of temporary
differences 106 71
Adjustment in respect of recoverable
deferred tax asset - (17)
Total deferred tax charge 106 54
Taxation 247 209
6. Earnings per share
The weighted average number of shares for the year was:
2006 2005
Millions of Millions of
shares shares
Ordinary shares 1,830 1,917
ESOP trust ordinary shares (3) (4)
Basic shares 1,827 1,913
Dilutive ordinary shares from share options 5 4
Diluted shares 1,832 1,917
Basic and diluted earning per share is calculated by dividing profit for the
year into the weighted average number of shares for the year. In order to
provide a measure of underlying performance, management have chosen to present
an adjusted profit for the year which excludes items that may distort
comparability. Such items arise from events or transactions that fall within the
ordinary activities of the Group but which management believes should be
separately identified to help explain underlying performance.
2006 2005
GBPm GBPm
Reconciliation from profit for the year to adjusted
profit for the year
Profit for the year 551 578
Payment from ITV Digital liquidators - (13)
Profit on disposal of joint venture - (9)
Remeasurement of all derivative financial instruments
(not qualifying for hedge accounting) 14 (4)
Tax effect of above items (4) 5
Increase in estimate of recoverable tax assets in
respect of prior years - (17)
Adjusted profit for the year 561 540
2006 2005
pence pence
Earnings per share from profit for the year
Basic 30.2p 30.2p
Diluted 30.1p 30.2p
Adjusted earnings per share from profit for the year
Basic 30.7p 28.2p
Diluted 30.6p 28.2p
7. Dividends
2006 2005
GBPm GBPm
Dividends declared and paid during the year
2004 Final dividend paid: 3.25p per ordinary share - 63
2005 Interim dividend paid: 4.00p per
ordinary share - 77
2005 Final dividend paid: 5.00p per ordinary share 92 -
2006 Interim dividend paid: 5.50p per 99 -
ordinary share
191 140
Dividends proposed after the balance sheet date and not
recognised as a liability
2006 Final dividend proposed: 6.70p per ordinary share 120 -
8. Goodwill
Total
GBPm
Carrying value
At 1 July 2004 and 30 June 2005 417
Purchase of the Easynet Group plc ("Easynet") 202
Other purchases 4
At 30 June 2006 623
9. Intangible assets
Internally Other Internally Other
generated intangible
generated intangible intangible assets not Total
intangible assets assets not yet available
assets yet available for use
for use
GBPm GBPm GBPm GBPm GBPm
Cost
At 30 June 2005 23 181 6 136 346
Business
combinations - 29 - - 29
Other additions 5 24 - 9 38
Disposals - (22) - - (22)
Transfers 6 115 (6) (115) -
At 30 June 2006 34 327 - 30 391
Amortisation
At 30 June 2005 14 130 - - 144
Amortisation
for the year 2 49 - - 51
Disposals - (22) - - (22)
At 30 June 2006 16 157 - - 173
Carrying amounts
At 30 June 2005 9 51 6 136 202
At 30 June 2006 18 170 - 30 218
10. Property, plant and equipment
Land and Leasehold Equipment, Assets
freehold improvements furniture not yet
buildings and fittings available
for use Total
GBPm GBPm GBPm GBPm GBPm
Cost
At 30 June 2005 70 42 431 123 666
Business
combinations - 12 67 - 79
Other additions - 1 163 30 194
Disposals (3) (2) (125) - (130)
Transfers 48 - 55 (103) -
At 30 June 2006 115 53 591 50 809
Depreciation
At 30 June 2005 13 31 287 - 331
Depreciation 3 5 81 - 89
Disposals (3) (2) (125) - (130)
Transfers - - - - -
At 30 June 2006 13 34 243 - 290
Carrying amounts
At 30 June 2005 57 11 144 123 335
At 30 June 2006 102 19 348 50 519
11. Investments in joint ventures and associates
The movement in joint ventures and associates during the year was as follows:
2006 2005
GBPm GBPm
Beginning of year
- Share of net assets 23 33
Movement in net assets
- Net repayment of loans 2 (4)
- Dividends received (7) (12)
- Disposals - (4)
- Share of results 12 14
Transfers to subsidiaries (1) (1)
Movement in creditors (1) (3)
End of year
- Share of net assets 28 23
12. Deferred tax
Recognised deferred tax assets
Short-term Other
Fixed asset Tax timing Total
timing losses differences
differences
GBPm GBPm GBPm GBPm GBPm
At 1 July 2005 14 68 12 11 105
(Charge) credit to income (71) (35) - - (106)
Credit to equity - - - 18 18
Business combinations 83 - - - 83
At 30 June 2006 26 33 12 29 100
13. Inventories
2006 2005
GBPm GBPm
Television programme rights 277 291
Digiboxes and related equipment 41 28
Other inventories 6 2
324 321
14. Trade and other receivables
2006 2005
GBPm GBPm
Trade receivables 207 134
Amounts receivable from joint ventures and 7 6
associates
Amounts receivable from other related parties 1 1
Prepayments 156 114
Accrued income 107 72
Other receivables 11 4
489 331
Included within the amounts shown above are the following receivables
which are due in more than one year:
2006 2005
GBPm GBPm
Prepayments 73 32
15. Trade and other payables
2006 2005
GBPm GBPm
Trade payables 352 346
Amounts owed to joint ventures and associates 5 3
Amounts owed to other related parties 31 34
VAT 140 101
Accruals 428 308
Deferred income 246 186
Other payables 45 53
1,247 1,031
16. Provisions
At 1 July Provided Utilised At 30
2005 during during June
the year the year 2006
GBPm GBPm GBPm GBPm
Current liabilities
Provision for termination benefits 11 - (11) -
Other provisions 2 6 (2) 6
13 6 (13) 6
Non-current liabilities
Provisions - 19 - 19
17. Borrowings and non-current other payables
2006 2005
GBPm GBPm
Current borrowings
Guaranteed Notes 162 -
Bank loan 1 -
163 -
Non-current borrowings
Guaranteed Notes 1,757 975
Bank loan 1 -
Obligations under finance lease liabilities 67 7
1,825 982
Non-current other payables
Accruals 15 25
Deferred income 51 -
66 25
18. Share capital
2006 2005
GBPm GBPm
Authorised
3,000,000,000 (2005: 3,000,000,000)
ordinary shares of 50p 1,500 1,500
Allotted, called-up and fully paid
1,791,077,599 (2005: 1,867,523,599)
ordinary shares of 50p 896 934
2006 2005
Number of Number of
ordinary shares ordinary shares
Allotted and fully paid during the year
Beginning of year 1,867,523,599 1,941,712,786
Options exercised under the Sharesave
Scheme at between GBP3.720 and GBP6.112 - 129,813
Shares repurchased and subsequently
cancelled (76,446,000) (74,319,000)
End of year 1,791,077,599 1,867,523,599
19. Reconciliation of shareholders' equity
Share Share Capital Special ESOP Merger Hedging Retained Total
capital premium redemption reserve reserve reserve reserve earnings shareholders'
reserve equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 30 June 2005 934 1,437 37 14 (32) 222 (14) (2,411) 187
Purchase of own shares
for cancellation (38) - 38 - - - - (408) (408)
Recognition and transfer
of cash flow hedges - - - - - - (54) - (54)
Tax on items taken
directly to equity - - - - - - 16 2 18
Share-based payment - - - - 7 - - 11 18
Profit for the year - - - - - - - 551 551
Dividends - - - - - - - (191) (191)
At 30 June 2006 896 1,437 75 14 (25) 222 (52) (2,446) 121
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: 28 July 2006 By: /s/ Dave Gormley
Dave Gormley
Company Secretary