Virgin Media Q3 results

Official press release.

Quarterly Highlights

Financial

• Consumer on-net¹ revenue increased 5.3% to £628m (Q3-08: £596m)
• Total revenue increased 1.3% to £953m (Q3-08: £941m)
• OCF² increased 6.8% to £348m (Q3-08: £326m)
• Operating income of £50m (Q3-08: £53m)
• Free Cash Flow³ of £109m (Q3-08: £103m)
• Net cash provided by operating activities of £278m (Q3-08: £213m)
• Completion of secondary listing on the London Stock Exchange

Operational

• On-net ARPU increased 5.3% to £44.24 (Q3-08: £42.00)
• On-net churn flat year-on-year at 1.5% (Q3-08: 1.5%)
• Customers are buying more from us with RGUs⁴ net increase of 199,900 (Q3-08: 185,200) to 12.85m (Q3-08: 12.22 m)
• On-net triple-play penetration of 59.5% (Q3-08: 54.7%); quad-play penetration now at 10.1%

On-net Broadband

• Broadband customer net additions of 39,000 (Q3-08: 68,700) to 3.77m (Q3-08: 3.63m)
• New and existing customers are subscribing to faster broadband, improving tier mix

• Customers with 10Mb or higher increased 157% year-on-year (including migration) to 2.70m representing 72% of base
• Customers with 20Mb or higher increased 40% year-on-year to 0.5m representing 13% of base

• 2Mb to 10Mb upgrade continues – 834,000 customers upgraded so far

Television

• TV customer net additions of 37,000 (Q3-08: 37,800) to 3.71m (Q3-08: 3.58m)
• Video-on-demand (VOD) average monthly reach of 55% of digital customers (Q3-08: 49%)
• Highest ever average VOD views of 66m per month (Q3-08: 45m)

Mobile

• Record contract mobile customer net additions of 88,000 (Q3-08: 78,300) to 872,600 (Q3-08: 578,600), up 51% year-on-year

Neil Berkett, Chief Executive Officer of Virgin Media, said:

“I am pleased to report that this quarter’s results delivered a strong OCF performance. I believe this demonstrates the success we have had in significantly differentiating and monetizing our compelling consumer proposition. Our triple-play penetration is at record levels and over 10% of our customers now take all four services from us. Our focus remains on attracting high value customers, who buy more from us and stay with us longer. This strategy has led to the second successive quarter of record ARPU and strong consumer revenue growth. I am delighted that these results show we are progressing significantly in this regard.”

Guardian coverage:

"Virgin Media beat analysts' forecasts for the third quarter, adding 8,100 net new cable TV households and boosting revenues by 1.3% to £953m.

"Overall, the company added 17,800 new customers in the third quarter.

"The cable operator reported a year-on-year increase in operating cash flow (OCF) – broadly equivalent to earnings before interest, tax, depreciation and amortisation (EBITDA) – of 6.8% to £348m for the quarter ended 30 September.

"Average revenue per user rose 5.3% to a record £44.24, almost a pound per user ahead of average analysts' forecasts."

In plainer english, here's the (very positive) Digital Spy interpretation of the numbers.