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 2008
31 July 2008
 


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 BSkyB results for the 12 months ended 30 June 2008 released on 31 July 2008

 

 

Consolidated financial statements

Consolidated Income Statement 
for the year ended 30 June 2008


 
 

Notes
2008
£m
2007
£m




Revenue
1
4,952
4,551
Operating expense
2
(4,228)
(3,736)
Operating profit

724
815




Share of results of joint ventures and associates
12
15
12
Investment income
3
47
46
Finance costs
3
(177)
(149)
Profit on disposal of joint venture
4
67
-
Impairment of available-for-sale investment
5
(616)
-
Profit before tax

60
724




Taxation
6
(187)
(225)
(Loss) profit for the year

(127)
499




(Loss) earnings per share from (loss) profit for the year (in pence)



Basic
7
(7.3p)
28.4p
Diluted
7
(7.3p)
28.2p









Consolidated Statement of Recognised Income and Expense 
for the year ended 30 June 2008



  
2008
£m
2007
£m



(Loss) profit for the year
(127)
499



Net (loss) profit recognised directly in equity


Loss on available-for-sale investments
13              
   
(192)
(151)
Cash flow hedges
43
(70)
Tax on cash flow hedges
(13)
21
Exchange differences on translation of foreign operations
4
-

(158)
(200)



Amounts reclassified and reported in the income statement


Cash flow hedges
2
109
Tax on cash flow hedges
-
(33)
Transfer to (loss) profit on impairment of available-for-sale investment
343
-




345
76



Net profit (loss) recognised directly in equity
187
(124)



Total recognised income and expense for the year
60
375




Consolidated Income Statement 
for the three months ended 30 June 2008

 

2008
Three months
ended
30 June
£m
(unaudited)

2007

Three
months ended
30 June
£m
(unaudited)
     

Revenue

1,246

1,175

Operating expense

(1,026)

(973)
     

Operating profit

220

202
     

Share of results of joint ventures and associates

3

3

Investment income

9

4

Finance costs

(50)

(41)

Impairment of available-for-sale investments

(142)

                   -

Profit before tax

40

168
     

Taxation

(49)

(57)

(Loss) profit for the quarter

(9)

111
     

(Loss) earnings per share from (loss) profit for the quarter (in pence)

    

Basic

(0.5p)

6.4p

Diluted

(0.5p)

6.3p






Consolidated Balance Sheet 
as at 30 June 2008


 
 

Notes
2008
£m
2007
£m




Non-current assets



Goodwill
9
852
741
Intangible assets
10
303
261
Property, plant and equipment
11
722
670
Investments in joint ventures and associates
12
114
34
Available-for-sale investments
13
338
797
Deferred tax assets
14
23
54
Trade and other receivables
16
19
-
Derivative financial assets

13
-


2,384
2,557




Current assets



Inventories
15
310
384
Trade and other receivables
16
566
524
Short-term deposits

185
15
Cash and cash equivalents

632
435
Derivative financial assets

5
5


1,698
1,363




Total assets

4,082
3,920




Current liabilities



Borrowings
19
338
16
Trade and other payables
17
1,294
1,295
Current tax liabilities

151
144
Provisions
18
27
8
Derivative financial liabilities

83
36


1,893
1,499




Non-current liabilities



Borrowings
19
2,108
2,014
Trade and other payables
19
67
84
Provisions
18
22
18
Derivative financial liabilities

160
258


2,357
2,374




Total liabilities

4,250
3,873




Shareholders' (deficit) equity
21
(168)
47




Total liabilities and shareholders' (deficit) equity

4,082
3,920




Consolidated Cash Flow Statement 
for the year ended 30 June 2008



 
2008
£m
2007
£m



Cash flows from operating activities


Cash generated from operations
997
1,007
Interest received
43
46
Taxation paid
(163)
(128)
Net cash from operating activities
877
925



Cash flows from investing activities


Dividends received from joint ventures and associates
11
9
Net funding to joint ventures and associates
(6)
(3)
Purchase of property, plant and equipment
(215)
(292)
Purchase of intangible assets
(124)
(64)
Purchase of available-for-sale investments
(6)
(947)
Purchase of subsidiaries (net of cash and cash equivalents purchased)
(72)
(104)
Proceeds from the sale of subsidiaries
3
-
(Increase) decrease in short-term deposits
(170)
632
Net cash used in investing activities
(579)
(769)



Cash flows from financing activities


Proceeds from borrowings
383
295
Repayment of borrowings
(16)
(192)
Repayment of obligations under finance leases
(1)
-
Proceeds from disposal of shares in Employee Share Ownership Plan ("ESOP")
22
37
Purchase of own shares for ESOP
(45)
(76)
Purchase of own shares for cancellation
-
(214)
Interest paid
(165)
(154)
Dividends paid to shareholders
(280)
(233)
Net cash (used in) financing activities
(102)
(537)



Effect of foreign exchange rate movements
1
-



Net increase (decrease) in cash and cash equivalents
197
(381)



Cash and cash equivalents at the beginning of the year
435
816



Cash and cash equivalents at the end of the year
632
435




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 2008 or 2007, for the purpose of the Companies Act 1985, but is derived from those financial statements. Statutory financial statements for 2007 have been filed with the Registrar of Companies and those for 2008 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 as adopted for use in the European Union ("IFRS"), this announcement does not itself contain sufficient information to comply with IFRS. The accounting policies applied in preparing this financial information are consistent with the Group's financial statements for the year ended 30 June 2007.


1. Revenue


 
 
2008
£m
2007
£m



Retail subscription
3,769
3,406
Wholesale subscription
181
208
Advertising
328
352
Sky Bet
44
47
Installation, hardware and service
276
212
Other
354
326

4,952
4,551




2. Operating expense


 
 
2008
£m
2007
£m



Programming
(i)
1,713
1,539
Transmission and related functions
542
402
Marketing
743
734
Subscriber management
700
618
Administration
(ii) (iii)
530
443

4,228
3,736



(i) Included within programming for the year ended 30 June 2007 is a £65 million credit due to the Group, arising from certain contractual rights under one of the Group's channel distribution agreements. 

(ii) Included within administration for the year ended 30 June 2008 is £21 million (2007: £16 million) of expense relating to legal costs incurred on the Group's ongoing claim against EDS (the information and technology solutions provider).

(iii) Included within administration for the year ended 30 June 2008 is £7 million of expense relating to a restructuring exercise undertaken following a review of operating costs.


3. Investment income and finance costs


 
 
2008
£m
2007
£m



Investment income


Cash, cash equivalents and short-term deposits
25
33
Dividends receivable from available-for-sale investments
22
13

47
46



 
 
2008
£m
2007
£m



Finance costs


- Interest payable and similar charges


£1 billion Revolving Credit Facility ("RCF")
(6)
(12)
Guaranteed Notes 
(167)
(135)
Finance lease interest
(7)
(8)

(180)
(155)



- Other finance income (expense) 


Remeasurement of borrowings and borrowings-related derivative financial instruments 
(i)
4
-
Remeasurement of programming-related derivative financial instruments
 (i)
(1)
6
Gain (loss) arising on derivatives in a designated fair value hedge accounting relationship
14
(5)
(Loss) gain arising on adjustment for hedged item in a designated fair value hedge accounting relationship
(14)
5

3
6




(177)
(149)



(i) Not qualifying for hedge accounting


4. Profit on disposal of joint venture

On 12 December 2007, the Group sold its 100% stake in BSkyB Nature Limited, the investment holding company for the Group's 50% interest in the NGC-UK Partnership. As consideration for the disposal, the Group received 21% interests in both NGC Network International LLC and NGC Network Latin America LLC (in effect, 21% of National Geographic Channel's television operations outside of the United States of America). This realised a profit on disposal of £67 million.


5. Impairment of available-for-sale investment

The Group's investment in ITV is carried at fair value. The fair value of ITV is determined with reference to its equity share price at the balance sheet date. An impairment was first recorded following a review of the carrying value of the investment in ITV at 31 December 2007, due to the significant and prolonged decline in the equity share price. In accordance with International Financial Reporting Standards, the Group has continued to review that carrying value throughout fiscal 2008 and has recognised a cumulative impairment loss of £616 million in the current year. The impairment loss for the year was determined with reference to ITV's closing equity share price of 47.5 pence at 27 June 2008, the last trading day of the Group's financial year.

In accordance with IAS 39, the effect of any further decline in the value of the equity share price of ITV will be recognised in the income statement at the relevant future balance sheet date. On 30 July 2008, the equity share price of ITV was 44.5p.


6. Taxation

Taxation recognised in the income statement

 
 
2008
£m
2007
£m



Current tax expense


Current year
172
204
Adjustment in respect of prior years
7
(15)
Total current tax charge
179
189



Deferred tax expense


Origination and reversal of temporary differences
5
22
Adjustment in respect of prior years
3
14
Total deferred tax charge
8
36



Taxation
187
225



Taxation relates to a £179 million 
UK
 corporation tax charge (2007: £240 million) and an £8 million tax charge (2007: £15 million credit) in respect of the utilisation of 
Luxembourg
 trading losses.

The tax expense for the year is higher (2007: higher) than the expense that would have been charged using the standard rate of corporation tax in the UK (29.5%) applied to profit before tax. The applicable enacted or substantially enacted rate of 
UK
 corporation tax for the year was 29.5% (2007: 30%).


7. Earnings per share

The weighted average number of shares for the year was: 

 
 
 
2008
Millions
of
shares
2007
Millions
of
shares



Ordinary shares
1,753
1,759
ESOP trust ordinary shares
(5)
(4)
Basic shares
1,748
1,755



Dilutive ordinary shares from share options
-
12
Diluted shares
1,748
1,767




The calculation of diluted (loss) earnings per share excludes 32 million share options (2007: 17 million), which could potentially dilute earnings per share in the future.

Basic and diluted (loss) earnings per share are calculated by dividing the loss or profit for the year into the weighted average number of shares for the year. 



 
2008
pence
2007
pence



(Loss) earnings per share from (loss) profit for the year


Basic
(7.3)
28.4
Diluted
(7.3)
28.2







8. Dividends


 
 
2008
£m
2007
£m



Dividends declared and paid during the year


2006 Final dividend paid: 6.70p per ordinary share
-
117
2007 Interim dividend paid: 6.60p per ordinary share
-
116
2007 Final dividend paid: 8.90p per ordinary share
156
-
2008 Interim dividend paid: 7.125p per ordinary share
124
-

280
233



The 2008 final dividend proposed is 9.625p per ordinary share being £168 million. The dividend was proposed after the balance sheet date and is therefore not recognised as a liability as at 30 June 2008.


9. Goodwill


Total
£m


Carrying value

At 1 July 2006
637
Purchase of 365 Media Group Plc ("365 Media")
77
Other purchases
27
At 30 June 2007
741
Purchase of Amstrad Plc ("Amstrad")
104
Other purchases
7
At 30 June 2008
852




10. Intangible assets

 
 
 
 
 
 
Internally
generated
intangible assets
£m
Other
intangible
assets
£m
Internally
Generated
intangible assets
not yet available
for use
£m
Other
intangible
assets not yet
available for
use
£m
Total
£m






Cost





At 1 July 2007
62
341
-
52
455
Additions from business combinations
-
5
-
3
8
Foreign exchange movements
-
1
-
-
1
Other additions
33
34
4
58
129
Disposals
(4)
(25)
-
-
(29)
Transfers
-
11
-
(11)
-
At 30 June 2008
91
367
4
102
564






Amortisation





At 1 July 2007
25
169
-
-
194
Foreign exchange movements
-
1
-
-
1
Amortisation for the year
14
77
-
-
91
Disposals
(4)
(21)
-
-
(25)
At 30 June 2008
35
226
-
-
261






Carrying amounts





At 1 July 2007
37
 172
-
52
261
At 30 June 2008
56
141
4
102
303



The Group's intangible assets include internal and external expenditure on software associated with our customer management systems, software licences, capitalised development costs, copyright licences, customer lists and relationships, patents and brands acquired in business combinations.


11. Property, plant and equipment

 
 
 
 
Land and
freehold
buildings
£m
Leasehold
improvements
£m
Equipment,
furniture and
fittings
£m
Assets not yet
available for
use
£m
Total
£m






Cost





At 1 July 2007
105
64
761
37
967
Additions from business combinations
-
-
1
-
1
Foreign exchange movements
-
1
9
-
10
Other additions
3
7
148
46
204
Disposals
-
-
(30)
-
(30)
Transfers
-
-
25
(25)
-
At 30 June 2008
108
72
914
58
1,152






Depreciation





At 1 July 2007
17
19
261
-
297
Foreign exchange movements
-
1
7
-
8
Depreciation
3
2
150
-
155
Disposals
-
-
(30)
-
(30)
At 30 June 2008
20
22
388
-
430






Carrying amounts





At 1 July 2007
88
45
500
37
670
At 30 June 2008
88
50
526
58
722




12. Investments in joint ventures and associates

The movement in joint ventures and associates during the year was as follows:

 
 
2008
£m
2007
£m



Share of net assets:


- At 1 July
34
28
Acquisition of joint ventures and associates


- Disposal of joint venture
(15)
-
- Acquisition of associates
82
-



Movement in net assets


- Funding, net of repayments
6
3
- Dividends received
(11)
(9)
- Share of profits
15
12
- Exchange differences on translation of foreign joint ventures and associates
3
-






At 30 June
114
34




13. Available-for-sale investments


 
2008
£m
2007
£m



Investment in ITV at cost
946
946
Unrealised loss on ITV investment
-
(151)
Impairment of ITV investment
(616)
-
Fair value of ITV investment
330
795
Other investments at cost
8
2

338
797



On 17 November 2006, the Group acquired 696 million shares in ITV, at a price of 135 pence per share, representing 17.9% of the issued capital of ITV, for a total consideration of £946 million including fees and taxes.
 The Group's investment in ITV is carried at fair value. The fair value of ITV is determined with reference to its equity share price at the balance sheet date. An impairment was first recorded following a review of the carrying value of the investment in ITV at 31 December 2007, due to the significant and prolonged decline in the equity share price. In accordance with International Financial Reporting Standards, the Group has continued to review that carrying value throughout fiscal 2008 and has recognised a cumulative impairment loss of £616 million in the current year. The impairment loss for the year was determined with reference to ITV's closing equity share price of 47.5 pence at 27 June 2008, the last trading day of the Group's financial year.

Any disposal of the investment, assuming certain other factors remain consistent with those existing at the balance sheet date, would be exempt from tax under the provisions of the Substantial Shareholding Exemption (SSE). As such, the SSE provisions would prevent any capital loss arising for tax purposes. 

The Group holds certain unquoted equity investments that are carried at cost less impairment. The fair value of these investments is not considered to differ significantly from the carrying value.


14. Deferred tax

Recognised deferred tax assets

 
 
 
 
 
Fixed asset
temporary
differences
£m
Tax
losses
£m
Short-term
temporary
differences
£m
Share-based
Payments
Temporary
Differences
£m
Financial
Instruments
Temporary
differences
£m
Total
£m







At 1 July 2007
(9)
15
9
28
11
54
Credit (charge) to income
3
(8)
(1)
(3)
1
(8)
Charge to equity
-
-
-
(7)
(13)
(20)
Business combinations
(3)
-
-
-
-
(3)
At 30 June 2008
(9)
7
8
18
(1)
23




15. Inventories

 
 
2008
£m
2007
£m



Television programme rights
219
290
Set-top boxes and related equipment
81
84
Other inventories
10
10

310
384




16. Trade and other receivables

 
 
2008
£m
2007
£m



Net trade receivables
195
204
Amounts receivable from joint ventures and associates
10
8
Amounts receivable from other related parties
6
1
Prepayments
149
175
Accrued income
105
91
VAT
51
4
Other 
50
41
Current trade and other receivables
566
524
Non current prepayments
19
-
Total trade and other receivables
585
524



Included within trade and other receivables is £36 million (2007: £27 million) which is due in more than one year.


17. Trade and other payables

 
 
2008
£m
2007
£m



Trade payables
270
380
Amounts owed to joint ventures and associates
3
3
Amounts owed to other related parties
32
36
VAT
105
97
Accruals
534
468
Deferred income
289
245
Other
61
66

1,294
1,295




18. Provisions

 
 
 
 
At 1 July
2007
£m
Provided
during the
year
£m
On acquisition
of subsidiary
£m
Utilised
during
the year
£m
At 30
June
2008
£m






Current liabilities





Provision for termination benefits 
3
-
-
(3)
-
Restructuring provision 
-
6
-
-
6
Acquired and acquisition related provisions 
-
2
22
(10)
14
Other provisions 
5
4
-
(2)
7

8
12
22
(15)
27






Non-current liabilities





Acquired and acquisition related provisions 
-
-
8
-
8
Other provisions 
18
-
-
(4)
14

18
-
8
(4)
22




19. Borrowings and non-current other payables

 
 
2008
£m
2007
£m



Current borrowings


Guaranteed Notes 
301
-
Loan Notes
37
16

338
16



Non-current borrowings


Guaranteed Notes
2,041
1,948
Obligations under finance leases
67
66

2,108
2,014



Non-current other payables


Accruals
19
10
Deferred income
48
74

67
84




20. Share capital

 
 
2008
£m
2007
£m
Authorised
 
ordinary shares of 50p


3,000,000,000 (2007: 3,000,000,000) 
1,500
1,500



Allotted, called-up and fully paid


1,752,842,599 (2007: 1,752,842,599) 
876
876



 
 
 
2008
Number of
ordinary shares
2007
Number of
ordinary shares



Allotted and fully paid during the year


Beginning of year
1,752,842,599
1,791,077,599
Shares repurchased and subsequently cancelled
-
(38,235,000)
End of year
1,752,842,599
1,752,842,599




21 . Reconciliation of shareholders' equity

 
 
 
 
Share
capital
£m
Share
premium
£m
ESOP
reserve
£m
Hedging
reserve
£m
Available-
for-sale
reserve
£m
Other
reserves
£m
Retained
earnings
£m
Total
shareholders'
(deficit) equity
£m









At 1 July 2007
876
1,437
(54)
(25)
(151)
331
(2,367)
47









Recognition and transfer of cash flow hedges
-
-
-
45
-
-
-
45
Tax on items taken directly to equity
-
-
-
(13)
-
-
(3)
(16)
Exchange differences on translation of foreign operations
-
-
-
-
-
4
-
4
Impairment of available-for-sale investment
-
-
-
-
151
-
-
151
Share-based payment
-
-
17
-
-
-
(9)
8
Loss for the year
-
-
-
-
-
-
(127)
(127)
Dividends
-
-
-
-
-
-
(280)
(280)









At 30 June 2008
876
1,437
(37)
7
-
335
(2,786)
(168)



 


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: 31 July 2008                                                                                                        By: /s/ Dave Gormley
                                                           Dave Gormley
                                                       Company Secretary