Virgin Media’s revenues grow but new customer rate slows

Steve Dinneen
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VIRGIN MEDIA yesterday reported a 5.7 per cent jump in revenues despite a drop of almost 50 per cent in new customer additions.

The company added just 20,200 new users this quarter, down from 38,300 last year. Its TV customer additions were even more anaemic, with just 10,100 new ones – a 70 per cent year-on-year drop.

However, the slow customer growth was offset by Virgin’s average spend per user increasing as customers took more of its services and signed up to faster broadband.

The average Virgin Media customer now spends £46.16 a month, up 2.6 per cent on the year before but slightly down on the final quarter of last year. This pushed revenues up to £982m, with earnings rising 7.6 per cent to £376m. Free cash-flow doubled year-on-year to £100m.

The results hit analyst forecasts, although Evolution Securities analyst Steve Malcolm said the second-quarter could offer a sterner test, with price rises coinciding with tax hikes for the middle classes. But he noted Virgin has “proved its resilience”.

Virgin also announced yesterday it will begin trials of a new superfast internet service offering download speeds of up to 1.5Gbps. It is being tested at the new Silicon Roundabout site in east London.