UK's BSkyB restores dividend
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Half-year profits at Murdoch's BSkyB have jumped 84 percent.
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LONDON, England (Reuters) -- BSkyB, Britain's largest pay-TV company, restored its long-suspended dividend and reported higher first-half earnings, as Chief Executive James Murdoch continues his quest to win over investors.
BSkyB had not paid out a dividend since 1998 while it rolled out its digital TV service, but it announced on Wednesday an interim dividend of 2.75 pence per share.
"There's no doubt that the company is starting to generate some strong cash flow, and many investors have wanted this returned in the form of dividends,'' said BWD Rensburg fund manager Colin Morton, whose portfolio includes BSkyB shares.
BSkyB has grown into Britain's dominant pay-TV firm on the back of exclusive rights to English premier league soccer. It has overtaken rivals such as cable company NTL and benefited from the collapse of the digital network run by terrestrial broadcasters ITV.
Operating profit for the six months ended December rose 84 percent from last year to £283 million ($529.5 million) helped by a rise in subscriber numbers. Subscriber numbers reached 7.2 million in the period, in line with forecasts.
Total revenue rose 17 percent to £1.77 billion, just ahead of an average market forecast of £1.74 billion.
Pre-tax profits almost tripled to £236 million from £80 million. A Reuters poll of 10 analysts had forecast profits from £222-£270 million, with an average forecast of £239 million.
Shares edged down 0.3 percent to 764-1/2 pence in morning trade. Cavendish Asset Management fund manager Paul Mumford said the stock did appear expensive, but added he was comfortable to hold the shares.
"They've always looked slightly pricey, but it's a growth story and it's nice to see them back on the dividend list,'' said Mumford.
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