Virgin Media gains 7,100 customers in Q1
Virgin Media added 7,100 new subscribers in the first quarter of 2009 but saw revenues fall below £936 million due to poor performance in its business communications division.
The cable company persuaded 47,300 households to take up its broadband service, down from the 57,100 in the run-up to Christmas and 88,400 during the same period last year.
However, the new customers, many of who opted for its faster-speed services, bring Virgin up to nearly 4 million broadband users in total, including a million customers who are outside its cable network.
Virgin also added 30,600 new TV customers, although this figure was down from 44,500 in the last three months of 2008 and 36,800 in Q1 2008 – the company now has around 3.5 million digital TV users.
Virgin only managed to add 7,100 new customers in Q1 in total because many of these new broadband or TV customers already subscribed to other Virgin Media services.
The group’s total customer base now stands at 4.76 million.
The company also reported a poor financial start to the year, with total revenues of £935.7 million, down from £948.5 million in Q4 2008.
This drop was lower than forecast because of a poor performance from the group’s business communications division, which saw revenues decline from £160.7 million last year to £149.8 million.
However, Virgin’s core consumer business increased revenues slightly to £604 million from £601.5 million last year.
Average revenue per user increased to £42.49 per month, from £41.95 a month last year.
Operating income before financial charges was £312.3 million in the quarter, down from £323.5 million last year, but again, slightly better than analysts had forecast.
At the end of March, Virgin Media’s total debt stood at £5.9 billion.
After servicing this debt, the group made an overall loss of £132.9 million in the first quarter, down from £188.8 million in the previous quarter.
Neil Berkett, Virgin’s chief executive, said: “We began 2009 with another quarter of sound operational and financial performance. For the third successive quarter, we’ve achieved year-on-year growth in on-net ARPU and have driven churn to a record low, whilst maintaining strong levels of cash generation.
“We have achieved these results by continuing to deliver a differentiated and highly competitive consumer proposition that exploits our strength in broadband and video-on-demand.”
However, Virgin’s new additons fell well below those added by rival company BSkyB in the same period (see BSkyB adds 80,000 new customers despite downturn).
Sky added an impressive 80,000 new customers during the first quarter, which helped boost its adjusted revenues to £3.96 billion for the nine months ending March 31 – a 7% year on year increase.