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UPDATE 2-Virgin Media says showed resilience in Q4
February 25, 2009 / 8:13 AM / 9 years ago

UPDATE 2-Virgin Media says showed resilience in Q4

* Adds 15,000 net customer additions

* Revenue, operating cash flow in line

* Says showing good resilience (Adds details, quotes)

By Kate Holton

LONDON, Feb 25 (Reuters) - British cable operator Virgin Media VMED.O posted fourth-quarter revenue and operating cashflow in line with forecasts on Wednesday, and said it had continued to show good resilience in the face of the downturn.

Virgin Media said it had made 15,000 net new customer additions in the quarter, compared with 24,000 a year ago, and sold 185,500 products of either broadband, TV or telephony in the three months to end-December.

Chief Executive Neil Berkett told Reuters it was getting slightly harder to attract new customers, but keeping them was becoming easier as the group improves its offering.

Average revenue generated per user (ARPU) was up 6 pence on a year ago to 42.30 pounds ($61.60), in line with forecasts, while average monthly churn, or the number of customers dropping the service, was 1.2 percent.

“If there is a resilient sector I think we’re in it,” Berkett said, adding the company would not get arrogant and would continue to manage its cost base. Fourth-quarter revenue was 1.03 billion pounds and operating cashflow was 320 million pounds. It made an operating loss of 50 million pounds, which Berkett attributed to its varying amortization and interest payments.

Analysts had been looking for revenue of 1.03 billion pounds and the key cash flow measure, operating income before depreciation, amortization and other charges (OCF), of 323 million pounds according to a poll provided by the company.

It repaid 300 million pounds of debt in the quarter.

Virgin Media, which formed from the merger of NTL, Telewest and Virgin’s mobile phone division, has touted high-speed broadband and its catch-up TV service as its “hero products” which it hopes will keep customers loyal.

Berkett said the group had continued to see strength in its premium broadband services which cost more. It added 57,100 broadband customers to its network to take the total to 3.68 million and it added 44,500 new TV customers to a record total of 3.62 million.

”We finished 2008 with another quarter of sound operational and financial performance,“ Berkett said. ”We have achieved further growth in ARPU and improvement in churn, whilst generating strong Free Cash Flow for the year.

“Record numbers of customers are now using Virgin Media’s services, despite the current economic environment.” (Reporting by Kate Holton; Editing by Dan Lalor and Rupert Winchester) ($1 = 0.6866 pound)

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