SKY - Chairman's Statement

Sky's direct to home ("DTH") subscriber base grew to 7.8 million during the year, with continued strong demand for the Company's industry-leading entertainment service. In the Group's short history, questions have at times been asked about the potential maturity of the business. In the last year, we heard those questions asked again. However, in a dynamic and competitive marketplace, it is the work of the business to continue to adapt and refresh itself for our current customers, while opening new horizons for future customers and their desires.

Over the years Sky has reintroduced itself, reinvented itself and revitalised its appeal. This past year of continued renewal was no different - and in the last 12 months we accelerated the number of new subscribers joining the service year-on-year for the first time since 2001.

During the year, Sky has continued to invest in quality programming, ensuring that the very best content is available to our subscribers. Unrivalled choice - new entertainment, popular movies, leading sports coverage and the finest 24-hour news service in Europe will continue to drive this business forward.

Sky⁺ is transforming the way in which our customers consume television. At the end of June 2005, almost 900,000 households had access to the enhanced control and flexibility that Sky⁺ provides to the television viewing experience. By increasing customer satisfaction and providing a platform for new businesses, our new products strategy is delivering incremental profitability and new opportunities for growth by first and foremost meeting the needs of our customers.

Following on from the success of Sky⁺, the next development will be the introduction of high definition television ("HDTV"). HDTV will provide an enhanced TV viewing experience for our customers in the UK and Ireland delivering increased choice, flexibility and connectivity for future services.

Financially, Sky is in robust health. During the 2005 financial year, Sky generated on average over £1 billion of revenue each quarter and delivered the highest level of profit in Sky's history.

Combined, these core strategic elements: quality, in service and on screen; flexibility, for our customers and for the business; control, letting the customers structure their family's entertainment; and choice, empowering the customer with an unrivalled breadth of our service, set the pace for our viewers and for the marketplace as a whole.

Finally, I would like to thank all the staff at Sky for their continued contribution. It is through their continued hard work, dedication and enthusiasm that the Group will continue to deliver substantial value to shareholders.