Revenue growth in all segments drives strong financial performance
Operational performance driven by continued ARPU and customerincreases
- Total revenue up 6.4% to £978m
- Revenue growth in all areas, including strong growth in both Mobile and Business
- Fourth successive quarter of double-digit percentage OCF2 growth, up 11.0% to £387m
- Operating income doubled to £102m from £51m
- Free cash flow3 up 8.6% to £119m; last 12 months FCF up 18.2% versus previous 12 months
Continued improvement of Company's capital structure
- Cable ARPU up 3.7% to a record £46.38
- Cable customers up 1.9% with 14,100 net new cable customers in Q3, up from 8,100 a year ago
- Cable gross additions of 236,000 up 10.4%
- Triple-play penetration increased to 62.7% and quad-play penetration increased to 11.5%, reflecting focus on bundling
- Pre-registration for UK's fastest widely available broadband opens today; 100Mb broadband service further extends Virgin Media's speed advantage
Neil Berkett, Chief Executive Officer of Virgin Media, said: "Our continued focus on exploiting our strategic advantages with the resulting multiple opportunities for revenue growth, as well as robust financial discipline has delivered another strong financial performance this quarter. We are extending our lead in broadband even further with the imminent availability of 100Mb as consumer demand for consistently faster broadband grows."
- Accelerated Stock Buyback programme of £125m completed; Board authority remains for £250m of further buybacks
- Effective increase of Convertible strike price from $19.22 to $35
- Execution of conversion hedges against 90% of convertible notes
- Would reduce future dilution by 21m shares, assuming $35 stock price in 2016
- Existing convertible noteholders unaffected
Strengthening "Digital Entertainment"
We grew our TV base by 14,800 in the quarter to 3.77m customers. These viewers continue to enjoy our market-leading video-on-demand (VOD) service with well over half of them using and watching VOD as part of their everyday lives.
We have continued to aggressively expand our High Definition (HD) offering. Just over a year ago, we carried one HD channel, but we have increased this to 28 currently, including Sky Sports HD and Sky Movies HD. Basic HD channels are available to customers for no additional monthly fee and, as a result, our HD base is growing rapidly. We added 222,100 HD customers in the quarter to reach an installed base of 1.4m and HD penetration of 38%. During the quarter, we also added over 100,000 Sky premium subscribers to reach a total of 725,000 which included 52,000 customers who have subscribed to Sky Sports HD and/or Sky Movies HD since launch in August.
In September we launched the UK's first 3D VOD TV service to be commercially available to millions of homes. We have an exclusive partnership in the UK with Samsung Electronics to explore and develop opportunities in the 3D marketplace; including expanding the number of our retail stores where 3D is showcased.
Work continues with TiVo to develop and launch our next generation TV service, which is on track to be installed in the first homes in the fourth quarter.