Virgin reports strongest 2Q revenue growth since 2006

28 Jul 2010

British cableco Virgin Media has released its financial results for the three months ended 30 June 2010, posting what it says is its strongest revenue growth since it began operations as a combined entity following the merger of ntl and Telewest four years ago. For the second fiscal quarter of the 2010/11 financial year it reported revenue growth of 7.1% year-on-year to GBP964.2 million (USD1.49 billion), which it said was the result of improved performance in all areas of business. Operating income for the period stood at GBP79.6 million, up from GBP9.4 million in the same period a year earlier, attributed to the increase in revenue coupled with lower restructuring charges. The company however reported a net loss from continuing operations of GBP68.5 million for the quarter compared to GBP55 million in 2Q09, with Virgin Media saying this was predominantly due to higher interest expense, loss on extinguishment of debt and foreign currency losses, partially offset by higher operating income and reduced losses on derivative instruments.

In operational terms the company reported that in what it claims is traditionally its weakest quarter for customer additions – it lost some 27,800 customers in 2Q09 – it registered 9,100 new subscribers. At end-June 2010 Virgin’s broadband customer base had risen to 4.2 million, up 5.7% year-on-year, while the number of subscribers taking its fixed line voice service reached 4.3 million, up from 4.2 million a year earlier.

In separate but related news, Virgin Media has announced a deal with Surf Telecoms, a unit of Western Power Distribution, under which it will trial ultrafast broadband delivered over existing electricity lines. Virgin claims it will be the first UK operator to test such services, and under the project households in the Welsh village of Crumlin, Caerphilly, will gain access to speeds of up to 50Mbps. The trial is set to commence in August 2010 and will run until 2011. As previously reported by CommsUpdate, in March 2010 Virgin commenced trials of aerially deployed fibre-optic high speed broadband services delivered using purpose built infrastructure in the Berkshire village of Woolhampton. Jon James, executive director of broadband, Virgin Media, said of the latest development: ‘We’re already bringing broadband speeds of up to 50Mbps and, soon 100Mbps, to over half of all UK homes and are pushing the boundaries to ensure that homes right across the UK benefit from ultrafast broadband. Working in partnership with companies like Surf Telecoms, we can more rapidly and efficiently expand the reach of fibre-optic networks to towns, villages and communities right across the UK.’

United Kingdom, Virgin Media