Virgin Media posted its strongest ever annual results after managing to add robust number of new subscribers and higher average spending by customers.
Virgin Media said it had managed to add 17,100 net new customers in the last quarter of 2010. The company’s main rivals are BSkyB and BT, with which it competes to provide telephony, broadband and pay-TV services.
Compared to a net addition of 17,600 customers in 2009, the company added 76,600 new subscribers in 2010 following a strong demand for mobile and broadband services. Chief executive Neil Berkett said he hopes to maintain the growth momentum in 2011.
“This is the end to a fantastic year for us”, said Mr. Berkett adding “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”.
Giving out details of growth, Virgin said it had added 12,100 new TV subscribers, 56,100 new mobile contracts and 44,100 new broadband internet connections for the year. Average Revenue Per User (ARPU) also grew by 4.9 percent to touch a new high of £47.51.
The solid Q4 performance helped the company post a 6.6 percent revenue growth in the quarter to a record £1 billion, beating analysts forecast of £992 million. Operating cash flows also jumped by 9.9 percent to £404 million, again 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”, said Mr. Berkett.
Virgin Media’s main rival BSkyB added lesser number of customers than expected triggering speculation that pay-TV services growth in Britain may be stagnating.
As new products and services hit the market, Virgin’s revenue will continue to register modest growth, said Mr. Berkett.
Analyst Mark James of Liberum Capital said: “These numbers look in-line or better than some pretty strong expectations” adding “ARPU is particularly strong. Free cash flow is up a whopping 24 percent”.