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Virgin Media Q1 Profit Rises - Update

Virgin Media Inc. (VMED: Quote, VMED.L), one of the major providers of broadband internet, TV and telephone services in the UK reported Wednesday improved earnings in its first-quarter. The results reflected growth in cable customer base and fall in gross disconnections. It sees a steady progress across the company in the rest of the year.

Consumer cable revenue increased 1.8 percent to 678 million pounds, mainly due to 1.7 percent growth in cable average revenue per user, or ARPU. Cable ARPU improved to 46.95 pounds from 46.16 pounds a year ago. During the quarter, the company added 21,200 net cable customers.

Mobile revenue grew 1.2 percent due to growth in contract service revenue. Mobile ARPU was 14.96 pounds, higher than 14.7 pounds last year.

Neil Berkett, chief executive officer said, "In the first quarter of 2012, we've made steady progress against our strategy. Demand for superfast broadband and TiVo, the UK's first mass-market connected TV service, continued to gather momentum. We once again demonstrated the unique power of our network by starting to double the broadband speeds of over four million customers."

The company said it launched a programme to double the broadband speeds of over 4 million customers through the "acclaimed "Double Speeds" advertising campaign featuring Usain Bolt and Sir Richard Branson".

In the first quarter, the company's net income increased to 7 million pounds from 3.3 million pounds in the prior-year quarter. On a per share basis, quarterly earnings were 0.02 pounds per share, higher than 0.01 pounds per share last year.

Operating income for the period increased 18% to nearly 131 million pounds.

Total revenues for the quarter grew 2.4 percent to 1.01 billion pounds from 982.3 million pounds in the same quarter last year, helped by growth in both the consumer and business segments.

Consumer segment revenues increased to 835.8 million pounds from 823.2 million pounds in the preceding year. Business segment revenues were 170.4 million pounds, up 7.1 percent from last year. Gross margin also improved 3.2 percent to 589 million pounds.

Virgin Media said the demand for faster broadband continues to improve and it expects strong cash flow in the remainder of the year.

VMED closed Tuesday's regular trading at $23.84 on the Nasdaq.

VMED.L is currently trading at 1,445 pence, down 29 pence or 1.97 percent, on a volume of 1,900 shares on the LSE.

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by RTT Staff Writer

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