LONDON (Reuters) ? British pay-TV group BSkyB looks set to post solid first-quarter profit growth on Wednesday, driven by the sales of additional products to existing customers rather than the acquisition of new subscribers.
BSkyB, which was set to be bought by its largest shareholder News Corp until a phone hacking scandal erupted in July, has been focusing on cross-selling products in recent quarters as the increasingly tough economic conditions make it harder to attract new customers.
Analysts expect the group to have signed up 38,000 new customers to the pay-TV service in the three months to the end of September, well down on the 96,000 that joined in the same period in 2010.
However they expect to see strong growth in the sale of broadband, telephony and high definition TV, and a jump in the percentage of customers who are taking the three main products from the current 27 percent.
"We expect a solid quarter, but expect the more challenging consumer environment to weigh on net and high-definition additions," Numis analysts said in a preview note.
"We believe that BSkyB has other areas in its base to drive growth, particularly up-selling existing Sky customers to its attractively-priced broadband/triple-play packages. We ... believe it has numerous cost levers to pull to deliver profit growth even in a tougher macro environment."
Analysts expect BSkyB to post first quarter revenue up 8 percent to 1.65 billion pounds, according to a Reuters poll, and adjusted operating profit up 11 percent to 283 million pounds when it reports on Wednesday.
Rupert Murdoch's News Corp was forced to pull its $12 billion bid for BSkyB in July after it admitted that people working for one of its British tabloids had hacked into the phones of thousands of people to generate stories.
The admission heaped pressure on the government to distance itself from News Corp, just as it was about to approve the deal, forcing Murdoch to pull the prized offer.
Some small shareholders and shareholder advisory groups have suggested that Murdoch's son James should no longer remain as chairman to BSkyB, however the board has already given James Murdoch its backing and the company is unlikely to announce any changes on Wednesday.
BSkyB holds a shareholders' meeting at the end of November.
(Reporting by Kate Holton; Editing by Helen Massy-Beresford)
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