News Corporation payout contributes to BSkyB profit surge

Sky News parent company BSkyB has reported a 25 per cent surge in profits in the nine months to the end of March, reaching £939 million.

Group revenue grew by five per cent year on year over the same period to £5.08 billion, the company said in a trading update this morning.

The growth in operating profit was helped by a £31 million payment from News Corporation, which paid a break fee after it abandoned its bid to buy the 60.1 per cent stake in BSkyB that it does not already own.

BSkyB said it had concluded its review of editorial practices at Sky News, after it admitted hacking emails on two occasions.

The company said: "While there has been no allegation of impropriety at Sky News, the company undertook the review at its instigation as part of its commitment to acting responsibly across all areas of our business.

"Reporting to the Audit Committee, the process involved the review of Sky News payment records by our internal audit team and a review of emails by our external legal advisors, Herbert Smith. These reviews found no evidence of impropriety or cause for concern.

"Separately, the Audit Committee has reviewed the company's approach to two separate investigations undertaken by Sky News in which a Sky News journalist accessed the email of individuals suspected of criminal activity.

"Following a thorough review of each of those cases, we are satisfied that the action was justified in the public interest and subject to proper editorial oversight."

Broadcasting regulator Ofcom is gathering evidence as part of an assessment of whether BSkyB is "fit and proper" to hold its licence.

BSkyB said: "The company is engaging with Ofcom in this process and continues to believe that it remains a fit and proper licence holder, as demonstrated by its positive contribution to UK audiences, employment and the broader economy, as well as its strong record of regulatory compliance and high standards of governance."

Chief executive Jeremy Darroch said in today's results announcement: "We have made a good start to 2012. In what remains a tough economic environment, strong and consistent execution of our plan has delivered good growth across our product range.

"We have grown revenues by fve per cent while holding prices flat for customers and delivered a record nine-month operating profit of £908 million alongside 24 per cent growth in earnings per share."

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