Broadcaster Sky picked up over 100,000 new customers over the last three months and said it was on course to hit full year target, despite suffering a drop off in advertising.

The pay-TV giant – with operations in Germany, Italy and the UK – reported in a trading update that overall sales lifted 5% to £3.1bn in the period to the end of September.

In the UK it added 35,000 new customers, although advertising revenue dipped 3%, due to a quiet start to the quarter as terrestrial channels aired the Euro 2016 football championships and the Rio Olympics over the summer.

Across the group the broadcaster said it added 106,000 new customers, although this was lower than the 134,000 it added a year ago. It also cut operating costs by 2% in the period. The group serves 22m customers across Europe.

The update is the first to include the impact of Sky's new Premier League rights contract, which at £4.2bn over three years is 83% more expensive than the previous deal.

Sky chief executive Jeremy Darroch said: "We are on track financially in a year of investment on screen. We are bringing customers the very best TV with more of the biggest Premier League matches, Europe's best box set service and more new and exclusive original drama."

Darroch said Sky is focused on its mobile service in the UK, due for launch to customers by the end of the year as it seeks to respond to BT's £12.5bn takeover of mobile business EE earlier this year.

Analysts at Numis expect Sky to a post full-year profit of £1.3bn, a fall of almost 8% compared to a year ago.