British satellite TV firm BSkyB has unveiled narrower losses and higher subscriber numbers, in a sign that it is capitalising on the failure of rival broadcaster ITV Digital.

This is a good result in a traditionally poor quarter

Wilton Fry, CSFB analyst

The company said on Wednesday that pre-tax losses before one-off costs for the year to 30 June came in at �22m ($34.5m), down from �214m the previous year.

The company added that it had signed up 214,000 new subscribers in the April to June period, boosting its total subscriber base to 6.1 million.

Average annual revenues per subscriber also rose during the period, climbing 11% on the year to �347.

In the City, investors welcomed the news, marking BSkyB shares 7p higher to 599p by the close.

On target

BSkyB chief executive Tony Ball said the company was on track to meet its target of seven million subscribers by the end of 2003.

"This is a good result in a traditionally poor quarter," said Wilton Fry, analyst at Credit Suisse First Boston.

It is thought likely that many of the new subscribers switched from ITV Digital, which collapsed in May this year after a downturn in advertising revenues put its already precarious finances under added pressure.

Cable TV operators NTL and Telewest, BSkyB's other main rivals, have also come under financial strain during the past year.

BSkyB, the UK's biggest pay TV service, saw its own ad sales fall, with total revenues coming in 7% down on the year at �251m.

Consolidation

But the firm looks set to emerge from the downturn in a stronger position, thanks in part to ITV Digital's demise.

The firm picked up the remaining two years of ITV Digital's contract to screen Football League games for �95m.

ITV Digital had paid �315m for the three-year deal.

And BSkyB has joined forced with the BBC and broadcast transmitter operator Crown Castle to scoop up ITV Digital's licence to broadcast terrestrial digital signals.

Terrestrial digital signals are picked up by standard TV aerials and decoded using a set top box, a transmission mechanism favoured by viewers who object to installing unsightly satellite dishes on the walls of their houses.