Virgin Media posted its strongest ever full-year financial results and said it expected to maintain the performance after adding a solid number of new subscribers and extracting record customer spend.
Virgin Media, which competes in Britain with BT and BSkyB to provide broadband, telephony and pay-TV, said it had added 17,100 net new subscribers in the last three months of the year.
The growth took the number of new customers in the full year to 76,600, from 17,600 in 2009, due to good demand for broadband and mobile, and Chief Executive Neil Berkett told Reuters he expected to maintain the rate of growth through 2011.
This is the end to a fantastic year for us, he said. We're ahead of consensus on just about every metric. We're comfortable with the pace that we've got. It's modest net adds which is generating significant free cash flow growth.
Virgin Media sold 44,100 new broadband products to customers, 12,100 new TV services and 56,100 mobile contracts, taking the average revenue per user (ARPU) up 4.9 percent to a new record 47.51 pounds.
That helped the company push fourth-quarter revenue up 6.6 percent to a record 1 billion pounds ($1.61 billion), ahead of a company supplied poll forecasting 992 million pounds, while operating cash flow was up 9.9 percent to 404 million pounds, also ahead of forecasts.
We have driven our consumer division to its highest ever rate of revenue growth, maintained robust cost control and delivered our best ever financial year, Berkett said.
Main pay-TV rival BSkyB added slightly fewer new customers than had been expected in its previous financial results, prompting some analysts to speculate that pay-TV in Britain could be hitting saturation point.
But Berkett said he expected the market to continue growing modestly as new products and technologies come to market.
He said Virgin Media would focus in 2011 on persuading fixed-line telephony customers to also take a mobile phone package and to encourage customers to upgrade for faster broadband and the new TiVo TV service.
These numbers look in-line or better than some pretty strong expectations, Liberum Capital analyst Mark James said. ARPU is particularly strong. Free cash flow is up a whopping 24 percent.
(Editing by Paul Sandle and Will Waterman)