Sky saw its customer numbers rise by 500,000 across Europe in the last year, prompting a boost to the group’s profits.
The broadcaster enjoyed a 7.6 per cent rise in profits to £864million over the period, with like-for-like sales up 5 per cent to £13.6billion.
Rupert Murdoch’s 21st Century Fox and US cable giant Comcast have both submitted multi-billion pound offers for Sky and its strong annual results look set to ramp up the fierce bidding war even further.
Bidding war: Rupert Murdoch’s 21st Century Fox and US cable giant Comcast have both submitted multi-billion pound offers for Sky
In the UK and Ireland, Sky grew underlying earnings by 9 per cent to £2billion, with revenues 4 per cent higher at £8.9billion.
Customer numbers across the UK and Ireland increased by 270,000 over the period, including 20,000 in the fourth quarter.
The group said global success of hit shows including Patrick Melrose, starring Benedict Cumberbatch, helped the group boost its profits.
The bounceback in full-year earnings comes after Sky took a hit in 2016-17 from £629million in costs linked to its deal to show top-tier English football.
In early morning trading, Sky’s share price was up 0.43 per cent or 6.5p to 1,513.5p.
Sky has not declared a final dividend for its investors.
Explaining the reasoning behind this, Sky said: ‘The increased Comcast offer and increased 21st Century Fox offer both include an amount in lieu of a final dividend in respect of the financial year ended 30 June 2018, with Comcast and 21st Century Fox each reserving the right to reduce their respective offer prices by some or all of the amount of any dividend.’
Takeover battle: Sky’s solid results look set to make the takeover battle even tougher
Dividend decision: Sky has not declared a final dividend for its investors in light of the takeover tussle
Jeremy Darroch, Sky’s chief executive, said: ‘We’ve grown every year since we launched in 1989 and we’re not slowing down.
‘Today Sky is bigger and doing more for customers than ever before – and we’re proud that is being recognised globally.’
The boss said the group had enjoyed an ‘exceptional year.’
The group’s UK advertising revenues increased by 6 per cent while its rate of ‘churn’, which refers to the number of customers leaving the group, fell to its lowest for a decade, at 10.3 per cent.
Earlier this month, Comcast said it would pay £14.75-a-share for Sky, valuing the business at £26billion.
Its offer trumped a bid tabled just hours earlier from 21st Century Fox, which had offered £14-a-share for the 61 per cent of Sky that it does not already own.
21st Century Fox, which is in the process of selling most of its entertainment assets to Disney, must now decide whether to return with an improved bid.
The rival offers have escalated into a bidding war following the government’s decision to clear a takeover of Sky by Fox, subject to Sky News being spun off into separate ownership.
Commenting on Sky’s annual results, Lee Wild, head of equity strategy at Interactive Investor, said: ‘Sky proved today just why Fox and Comcast are fighting tooth and nail for control of the satellite broadcaster.’
He added: ‘These numbers and a bullish plan for further aggressive growth in the current financial year are clearly presented to squeeze the maximum from potential buyers. It could work.’
David Madden, an analyst at CMC Markets UK, said: ‘The battle for Sky continues as Disney, Fox and Comcast are all keen on the company.
‘The UK regulator has expressed concerns about the prospect of the Murdoch family, who control Fox, owning too much of the UK media.
‘Given Disney’s enormous back catalogue of content, Sky would stand to benefit from such a move.
‘Comcast recently dropped its pursuit of Fox in order to focus on their Sky bid, and this underlines how serious they are. Comcast don’t have the best reputation when it comes to customer service, and Sky will need to take that into account before potentially getting into bed with them.’