Telewest Results Hit By Writedowns

Underlying earnings increased by 19% to £379 million in 2002 while turnover rose by 2% to £1.35 billion. The company embarked on a cost cutting drive last year and this has succeeded in cutting net loss before exceptional items from £801 million to £506 million. However, Telewest was forced to write off approximately £1.6 billion of goodwill, taking total losses up from £1.9 million to £2.2 million.

Despite the mixed bag of results, Telewest chairman Charles Burdick believes that the company is on the right track. “We continue our focused strategy designed to accelerate cash generation, future profitability and provide a platform for growth,” he said.

Telewest has succeeded in attracting 297,000 broadband subscribers to date but TV subscriptions fell slightly to 1.29 million last year and Burdick has vowed to focus on “churn reduction” in 2003.

The company is in the process of refinancing after agreeing to convert £3.5 billion of debt to shares (see Telewest Agrees £3.5 Billion Debt Deal) but there is no timetable for completion and Burdick would only say that “slow, steady progress” was being made on this front. A merger between Telewest and its cable rival NTL is regarded as a likely scenario but sources suggest that this will not take place until 2004 (see UK Cable Merger Put On Hold).

Shares in Telewest were down marginally at 2.45p by midday today.