Revenues see Virgin Media back in profit

VIRGIN Media’s third quarter results showed a healthy return to profit after last year’s loss of £78.1m, marking its first quarter in the black since the collapse of predecessor NTL.

Pre-tax profit for the third quarter this year has jumped up to £9.9m, with earnings-per-share rising from an 18p loss last year to a 13p profit for the same period this year.

The results also show that the communications provider has slowed its recruitment of new customers, but revenues per customer are up.

Total revenues grew 6.4 per cent on 2009, reaching £978m. But the number of new subscribers was down by more than half in some areas, with net additions in TV shrinking 60 per cent and 11 per cent in cable telephony.

The results reflect a decision to focus on generating higher-value customers: average revenue per user was up 3.7 per cent to an all-time high of £46.38. For example, the number of subscribers to its two top-tier broadband services has increased by 41 per cent to 708,300, but the rate at which it recruited new broadband users was down 13 per cent on last year.

Third-quarter profits also benefited from the £14.4m sale of VMTV to BSkyB, completed in July.

In addition to encouraging customers to upgrade their subscriptions, Virgin is aiming to increase its premium service offering by launching ultra-fast broadband. The firm opened pre-registration for the 100Mb line yesterday, claiming it would deliver a service up to ten times faster than the UK average. It also continued its share buyback programme. The firm has already bought back £125m of stock and has board authority for a further £250m.