Add back derivative losses and debt repayment costs, and Virgin Media boosted first half operating income by 26 per cent to £310m, driven by strong demand for interactive TV services and faster broadband. Virgin also announced the next stage of its share buy-back worth another £113m which means that by the year-end it will have repurchased around 25 per cent of the shares in issue since mid-2010.
Trading was doubly impressive because Virgin is not only attracting signifcantly more customers to its interactive TV service TiVo - customer numbers rose by 39 per cent to 938,800 in the second quarter and have since hit one million to account for 25 per cent of the group's TV users - but average revenue per customer (arpu) is rising, too, by over 2 per cent for both cable based services and on the mobile side. On top of this came a much better customer retention rate, with net disconnections down from 36,000 to 14,700 in the second quarter. In the same three month period, Virgin also managed to increase the superfast broadband base (30mb and above) by 459,800 customers to 1.3m - that's 31 per cent of the broadband base.
UBS is forecasting full-year pre-tax profits of £227m and EPS of 88p (2011: £92m/36p).
| VIRGIN MEDIA (VMED) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,684p | MARKET VALUE: | £ 4.61bn | |
| TOUCH: | 1,671-1,684p | 12-MONTH HIGH: | 1,780p | LOW: 1,256p |
| DIVIDEND YIELD: | 0.6% | PE RATIO: | 89 | |
| NET ASSET VALUE: | 178p* | NET DEBT: | £5.76bn | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (c) |
|---|---|---|---|---|
| 2011 | 1.97 | 120 | 32.0 | 8.00 |
| 2012 | 2.03 | 72 | 26.0 | 8.00** |
| % change | +3 | -40 | -19 | - |
*Includes intangible assets of £2bn, or 737p a share **Quarterly dividends of 4c, 2nd quarter paid on 12 June £1=$1.57 | ||||
