Financial News

Virgin Media (NASDAQ: VMED - news) , the UK's second-biggest pay-TV company, has exceeded third-quarter expectations and added more cable subscribers to its customer base after an unexpected drop midway through the year.

The company reported a record average turnover per user in the period to September 30 after an increasing focus on attracting customers willing to pay for multiple services.

Virgin added a net 17,800 customers in the period, with 8,100 signing up to the group's services delivered by fibre optic cable. The latter number was ahead of analysts' expectations, while customer churn was in line with forecasts - flat year-on-year at 1.5 per cent.

The figures came after an unexpectedly weaker-than-usual second quarter in which some 26,200 customers left the company - almost twice as many as expected.

Neil Berkett, chief executive, ascribed the improvement in profits and average revenues to Virgin's focus on customers taking more services.

"Our triple-play penetration is at record levels and over 10 per cent of our customers now take all four services from us," he said. "Our focus remains on attracting high-value customers, who buy more from us and stay longer."

The results were Virgin's first since its secondary listing on the London Stock Exchange (LSE: LSE.L - news) at the start of the month, ending a longstanding anomaly in which it had run its operations solely in the UK but traded only on the US-based Nasdaq (NASDAQ: news) exchange.

Broadband customer additions, which had dropped to just 5,100 people signing up between March and June, rose to 39,000. However, the group had added 68,700 a year ago.

Average revenue per user rose to a record £44.24 from £42 a year ago and enabled Virgin to report a rise in earnings before interest, tax, depreciation, amortisation and other charges from £326m to £348m.

Revenues for the three months to September 30 rose from £940.9m a year ago to £953.4m while the pre-tax loss narrowed from £118.1m to £74.9m. Losses per share halved to 18p.

The dividend, paid in dollars to reflect its overwhelmingly US-domiciled shareholder base, was held at 4 cents.

Net debt fell from £6.1bn to £5.9bn year-on-year but rose from £5.6bn in the second quarter.

The shares rose 55p to 900p.