Virgin loses punters but profits up
Cable firm Virgin Media yesterday reported higher than expected underlying second-quarter profit, despite losing nearly 20,000 customers.
Underlying profit rose by 6 per cent to £333m due to cost cutting measures, the Nasdaq-listed firm said, beating market expectations of £321m.
But Virgin, which boasts Britain’s fastest broadband speeds, said it had lost around 19,500 customers, bringing the total number of residential customers on its cable network to 4.74m.
Sales were down from £995m to £990.5m, broadly in line with market expectations, while the amount of revenue per customer fell from £42.16 to £41.63.
Virgin Media said it would recruit more customers in the second half of the year, and that it was focussing on making more revenue per customer.
The second quarter is often tough for Virgin, as students – who favour the service over Sky – change flats or move back home for the summer.
Virgin said it would now focus on reducing churn – the number of customers cancelling contracts – and on getting more subscribers to sign up for a triple package of cable, broadband and phone services. It also said it was shrugging off a reputation for poor customer service.
Meanwhile, a non-cash goodwill impairment charge of £36m for Virgin Media’s mobile unit, which it bought two years ago for just under £1bn, resulted in an operating loss of £333m, compared to a profit of £3m.