Virgin Media finally turns an annual profit
Only took five years since beardie rebrand
Virgin Media pulled in annual revenue that was just shy of £4bn, the company reported this morning.
The telco recorded an operating cash flow of £1.6bn, while net income for the year ended 31 December 2011 sat at £75.9m - that's the first time Virgin Media has racked up an annual profit from its business.
It took the company five long years to get there after being rebranded as Virgin Media in February 2007 following the merger of NTL, Telewest and Virgin.net with Virgin Mobile.
Virgin Group - Branson's investment vehicle - licenses the Virgin brand to Virgin Media, which is why you are seeing Olympic champion Usain Bolt pretending to be the beardy boss in VM ads currently running on the telly.
The company followed in the footsteps of rival BSkyB by making more money out of its annual revenue per user (ARPU) for its cable service, which climbed to £47.85 in VM's final quarter of the year.
The telco said:
We increased our contract base by a record 102,500 contract customers in the quarter, nearly twice as many as in Q4 last year. Virtually all of these contract net additions were into cable homes - another record at 101,000. The total contract base increased 26 per cent to 1.52 million from a year ago.
There was plenty of churn, however.
For the first time ever, we now have more contract customers than prepay. Our prepay subscriber base reduced by 53,500 in the quarter compared to 54,200 in the same quarter last year. This takes the prepay base to 1.51 million, down 19 per cent during the year.
The tactic among ISPs is to pursue cash from customers willing to pay more. The result typically means fewer quarterly subscribers - VM pulled in 15,000 cable punters in Q4 - but an increased ARPU. Indeed the company boasted this morning that it now has the best ARPU in the market.
Virgin Media said its TiVo subscriber base now stood at 273,000, which means it added around 50,000 customers signing up to the time-shifting telly service in the last quarter. ®