James Murdoch

James Murdoch

Chairman

CHAIRMAN'S STATEMENT

Over the course of the year, the environment for consumer-facing businesses has again been characterised by an uncertain economic outlook and pressures on household budgets. Against this challenging backdrop, Sky has continued to do well with good progress operationally and a strong financial performance.

Our business, based largely on direct consumer subscription revenues, has proven to be more resilient to difficult economic conditions than those media businesses with greater exposure to cyclical advertising revenue. That strength, combined with the steps taken by the management team in pursuit of disciplined growth and operational efficiency, has put the Company on course to emerge from the downturn in a better position than before.

Customers are choosing Sky in greater numbers - and for a greater variety of products - than ever. At the close of the year, the Company was nearing its target of 10 million customers; a target that many observers long believed was not achievable. Furthermore, our relationships with those households are becoming increasingly valuable as more customers choose to take additional products such as high definition, broadband and telephony.

This strong response from customers, even in more difficult economic times, is a powerful endorsement of Sky's approach to business: taking risks, investing, innovating and competing vigourously and fairly. Our belief is that companies that embrace change and open up more choice in this way should have the opportunity to enjoy the fair rewards of success. We will continue to resist regulatory intervention that risks undermining the incentives for investment and the positive benefits enjoyed by consumers today.

Our approach also includes a strong sense of responsibility in the way we do business. Making a broad contribution to the society in which we operate is a key element of durable commercial success and we continue to expand our work in three key areas: helping to protect the environment; encouraging participation in sport; and opening up the arts to more people.

In June 2010, News Corporation - where I am an Executive Director - approached the Board of Sky with a proposal to acquire the shares in the Company that it does not already own. Further details of this matter are included in the Chief Executive's statement. For my part, I would like to take this opportunity to reiterate that News Corporation remains a committed shareholder in Sky and is fully supportive of its talented management team and exceptional people.

In reflection of the Company's continued strong performance, the Board proposes a 10% increase in the full year dividend to 19.40 pence per share.

This performance is only possible as a result of the commitment and effectiveness of all our colleagues at Sky. On behalf of the Board, I would like to express warm thanks to them for their contribution to the Company over the year, just as we thank all shareholders for their continued support.

  • Cyclists
  • Some of the animals from the film Madagascar
  • Footballers

TEAM SKY

The professional road racing team, Team Sky, aims to inspire more people to cycle by creating the first ever British winner of the Tour de France.

Sky movies

Sky Movies offers customers more than 450 movies a week, including a channel dedicated to family films like Madagascar: Escape 2 Africa.

UEFA Champions League

This year Sky Sports broadcast more live coverage of the UEFA Champions League than ever, including José Mourinho's return to Stamford Bridge for Inter Milan against Chelsea.