Virgin Media losses narrow as customers spend more
Friday 07 August 2009
Losses narrowed at Virgin Media as customers spent at record levels demonstrating the strength of the pay TV model over free-to-air counterparts in the downturn, but it failed to match the growth seen by rival BSkyB.
The Nasdaq-listed group's net loss fell to £49m in the second quarter, against £449m this time last year, although the company had taken a one-off hit on its mobile business.
Revenues fell slightly from £940m last year to £936m through a fall in sales at its mobile arm, although the group pointed out that customer revenue was up "driven by their demanding more high quality services and paying for them". However the group lost 26,200 customers during the quarter.
The performance paled in comparison to BSkyB, which added 124,000 during the same period. Virgin was at pains to distance itself from its biggest rival's strategy by focusing on "high end" customers who spent more.
The group saw its customers "highest ever average monthly spend" at £43.27 a month. This compares with £38.67 at Sky, £24.17 at BT and £23.30 at Carphone Warehouse.
Neil Berkett, chief executive of Virgin Media, said he was pleased with the growth in consumer revenue "during another quarter of solid financial performance". He added: "The growth outlook for the second half of the year remains strong."
Mr Berkett backed the pay TV model in the downturn, the day ITV posted a £105m loss following a plunge in advertising revenues. He said: "The growth in pay TV is driven by a number of things. In the current environment there is a pressure to stay at home, and there is the quality of the services."
News emerged this week that the group was considering a secondary listing in London. Mr Berkett said: "We are making progress. I need to satisfy myself that the complexity of a dual listing is justified. We are not there yet."
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