First profits at Virgin Media

Much like rival BSkyB, Virgin Media has focused on squeezing out higher spend from its existing customer base, rather than chasing new customers. This has started to pay off, with customers increasingly taking up Virgin's interactive TV service TiVo, which more than doubled its customer base in the fourth quarter with 273,000 net additions. As a result, TiVo now accounts for around 12 per cent of the 3.8m customers subscribing to Virgin's TV service. Also, the number of customers on Virgin's cheapest TV package continued to fall, as planned, and now represents 18 per cent of the customer base.

That said, as the number of connected devices rises in households, so does the need for greater bandwidth and faster broadband. Accordingly, Virgin saw half of all new subscribers in the final three months of 2011 take up superfast broadband of at least 30 megabits per second. Around 133,000 superfast broadband customers were added in the final quarter and 579,000 over the course of the year.

And while triple-play customers – TV, broadband and telephone customers – remained flat at 63 per cent of the customer base, quad-play customers, who subscribe to all three cable products and Virgin Mobile, increased by 113,000 to almost 700,000. This segment now represents 14.5 per cent of Virgin's cable customers, up from 12.2 per cent at the end of 2010. Moreover, the increased adoption of premium services, and growth in quad-play, has helped drive the group's free cash flow up by over 20 per cent to £498m.

Analysts at MacQuarie Research are expecting 2012 adjusted pre-tax profits to more than double to £209m, giving EPS of 79p.