Virgin loses cable customers but increases revenues in 2Q11

27 Jul 2011

UK cableco Virgin Media has announced its financial results for the three months ended 30 June 2011, revealing that, despite losing 36,000 cable customers in the quarter, increased spending by its remaining subscribers helped generate a 2.2% year-on-year increase in revenues for the period. In its second fiscal quarter of 2011 Virgin posted consolidated turnover of GBP985.8 million (USD1.6 billion), up from GBP656.4 million in the same period a year earlier, with revenues from the operator’s cable-based services rising to GBP682.3 million, up 3.9%. With turnover from non-cable products meanwhile rising 4.7% y-o-y to GBP19.7 million, fixed line revenues helped to offset sales related to mobile services, which fell by 2.7% to GBP132.6 million. Average monthly revenue per user (ARPU) for Virgin Media’s cable customers rose to GBP47.35 in the three-month period, up from GBP45.88 a year earlier, while mobile ARPU slipped slightly, down from GBP14.36 to GBP14.27. Operating cashflow in 2Q11 increased by 6% to GBP392.1 million, while free cash flow rose to GBP122.7 million, a 12.7% y-o-y increase.

In operational terms, at the end of June 2011 Virgin reported a total of 4.784 million cable subscribers in addition to a further 266,400 customers signed up to its non-cable products. Cable broadband subscriber numbers rose to 4.048 million, up from 3.936 million a year earlier, but down from 4.061 million at end-March 2011. Non-cable broadband customers meanwhile totalled 265,900 at end-June 2011, down from 271,800 one year previously. Cable telephony subscribers numbered 4.155 million at the end of 2Q11, down 0.5% against 4.175 million, while mobile subscribers totalled 3.051 million, having lost around 21,600 customers over the year, 55.9% of which were pre-paid.

Commenting on the results, Neil Berkett, Virgin Media’s chief executive, noted: ‘There is a growing and increasingly broad-based population of people who are becoming dependent on next generation digital technology and are prepared to pay for quality services. During the first half, we have continued to focus relentlessly on delivering superior services tailored to the needs of these data-hungry households and businesses. The increasing demand is evident in a 25% increase in data consumption among Virgin Media’s customers in just six months who have watched and downloaded more content than ever before. This trend is rapidly transforming the profile of our subscriber base, with more than half of all new broadband customers choosing 30Mbps or higher compared to just 18% a year ago.’

United Kingdom, Virgin Media, Virgin Mobile UK