Despite challenging economic conditions Foxtel today announced a 15.5% growth in earnings, from $477 million last year to $551 million for the year to 30 June 2011.
Foxtel has a monopoly on the pay TV market and its earnings this year before interest, tax, depreciation and amortisation grew by 15.5% to $551 million, while Profit Before Tax grew at 26% to just over $200 million. Foxtel's EBIT grew by 21% to just under $250 million.
Director of policy and corporate affairs Adam Suckline said it had been a challenging year for Foxtel for multiple reasons, citing a drop in consumer spending and external competition as the main factors influencing the latest results.
"Consumers have become very cautious and this is primarily based on an increase in savings rate. On top of this, we are also competing against Freeview services and new online offerings."
Foxtel's direct subscriber base grew by 2.5% to 1.58 million. Consumer retention improved with a full year churn of 12.5% in 2010/11, down form 13.5% in 2009/10 representing the best retention performance in four years.
Total subscriber households, including wholesales, finished at 1.652 million. Nearly 75% of subscribers now take the Foxtel iQ service with almost one-third of subscribers taking Foxtel's High Definition services.
Foxtel chief executive Kim Williams acknowledged the difficult environment saying: "While our financial performance for the year was solid, subscriber growth remains testing as a result of the ongoing reluctance of consumers to commit to new discretionary spend whilst the increased competition from Freeview and broadband delivered video entertainment services has exacerbated the acquisition challenge."
"Our existing subscribers continue to value our service highly as reflected through increased uptake of our iQ, High definition and multi-room services while churning at a significantly lower rate than in recent years."
Williams said he was positive Foxtel would continue to break new ground: "We will continue to invest and innovate in new products. This means investing in content. A big part of this is our investment in the AFL. We will play every game live and uninterrupted and will have a channel dedicated to the AFL.
"We're not worried about apprehensive consumer confidence, because we are confident in our plans to invest, innovate and continue to offer what consumers want. With our plans in place we will meet consumer expectations and this will also lead to fresh growth," he said.
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