Broadband and TV provider Sky (SKY) advances 2.7% to 911.2p despite failing to tackle rising churn levels in the UK and Ireland.

The churn rate, which is the amount of people that unsubscribe from a service, in these areas rose from 10.2% in 2012 to 11.2% this year, signalling a continual struggle for Sky to retain customers.

In Germany, Austria and Italy, the broadband provider has reduced the churn rate by 2% over the same period, as enhanced customer propositions drove its first full year operating profit.

Sky has added 445,000 new customers in the UK and Ireland and achieved total product growth of 2.3 million with 31,000 new TV products in the fourth quarter.

However, the company has failed to keep customers using limited retention discounts, blaming a TV price rise of 4% to 5% in June for the rising churn rate.

Investec says the rate of customers leaving the service is still high in the UK, Germany and Italy considering less discounting and football losses to Mediaset.

It believes full year financials are good with positive cost delivery to allow modest upgrades, although key performance indicator delivery is still poor.

Sky has increased revenue by 7% to £11,965 million and adjusted operating profit climbed 12% to £1,558 million.

The company aims to reduce operating costs as a percentage of sales by 2% to 3%, equivalent to over £300 million on a run rate basis in 2016/17.

Issue Date: 28 Jul 2016