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Virgin Media - Full Year And Fourth Quarter 2012 Results

Forward-looking statements

Various statements contained in this release may include “forward-looking statements”, both with respect to us and our industry, that reflect our current views with respect to future events and financial performance Words like “believe”, “anticipate”, “should”, “intend”, “plan”, “will”, “expects”, “may”, “estimates”, “projects”, “positioned”, “strategy”, and similar expressions identify these forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements or budgeted, whether expressed or implied, by these forward-looking statements.

These factors include the following factors relating to the proposed transaction:

  • The ability to obtain governmental and regulatory approvals of the transaction on a timely basis;
  • Failure to realize the anticipated benefits and synergies of the transaction, including as a result of a delay in completing the transaction or an increase in costs associated with integration or a delay or difficulty in integrating the businesses of Virgin Media and Liberty Global;
  • Limitation on the ability of Lynx Europe Limited, Liberty Global and/or Virgin Media to incur new debt in connection with the transaction;
  • Any disruption from the proposed transaction making it more difficult to maintain relationships with customers, employees or suppliers;
  • The outcome of litigation which may arise in connection with the transaction;
  • Failure to receive the approval of the stockholders of either Liberty Global or Virgin Media for the transaction; and
  • The impact of legislative, regulatory and competitive changes and other risk factors relating to the industry in which Virgin Media and Liberty Global operate, as detailed from time to time in the reports of Virgin Media and Liberty Global filed with the SEC.

In addition, factors relating to the ordinary course operation of our business are discussed under “Risk Factors” and elsewhere in our annual report on Form 10-K for the year ended December 31, 2011, or the 2011 Annual Report, as filed with the U.S. Securities and Exchange Commission, or SEC, on February 21, 2012 and on Form 10-Q for the three months ended September 30, 2012 as filed with the SEC on October 31, 2012. We assume no obligation to update our forward-looking statements to reflect actual results, changes in assumptions or changes in factors affecting these statements. Virgin Media cautions that the foregoing list of important factors that that may affect future results is not exhaustive.

       

SUMMARY FINANCIAL RESULTS

 

3 Months ended Year ended
Dec 31, 2012     Dec 31, 2011 Dec 31, 2012     Dec 31, 2011
£m     £m £m     £m
Revenue
Cable 714.9 688.5 2,804.0 2,721.8
Mobile 143.1 142.2 554.8 552.9
Non-cable 16.4 19.9 71.4 79.7
Consumer segment - Total 874.4 850.6 3,430.2 3,354.4
Business segment 165.3 173.1 670.3 637.4
Total Revenue 1,039.7 1,023.7 4,100.5 3,991.8
 
OCF 442.2 423.7 1,653.5 1,590.2
 
Operating income 208.6 166.3 699.1 540.2
 
FCF 137.6 139.6 473.1 497.7
 
Net cash provided by operating activities 232.1 294.4 1,039.7 1,149.1
 
 

SELECTED CONSUMER OPERATIONS STATISTICS

Dec 31, 2012 Dec 31, 2011 Dec 31, 2012 Dec 31, 2011
000's 000's 000's 000's
 
Consumer cable customers 4,894.3 4,805.6 4,894.3 4,805.6
 
Consumer cable products
Broadband 4,272.2 4,102.9 4,272.2 4,102.9
Television 3,795.5 3,763.1 3,795.5 3,763.1
Telephone 4,179.1 4,132.7 4,179.1 4,132.7
12,246.8 11,998.7 12,246.8 11,998.7
 
Mobile - contract 1,708.9 1,523.9 1,708.9 1,523.9
 
 
3 Months ended Year ended
Dec 31, 2012 Dec 31, 2011 Dec 31, 2012 Dec 31, 2011
000's 000's 000's 000's
 
Consumer cable customer net additions 42.7 15.0 88.7 5.6
 
Net consumer cable product additions (disconnections)
Broadband 62.7 30.0 169.3 91.8
Television 17.1 1.1 32.4 (15.7)
Telephone 21.4 (8.3) 46.4 (29.0)
101.2 22.8 248.1 47.1
 
Mobile - contract 38.0 102.5 185.0 313.1
 
Cable ARPU (4) £48.87 £47.85 £48.34 £47.31
 
Mobile ARPU (5) £15.13 £15.46 £14.91 £14.91
 

OVERVIEW

A year of sustainable revenue growth

Total revenue for the year was up 2.7% to £4.1bn. Gross margin 6 expanded to 60.3%, while SG&A increased by 2.7%, mainly due to a planned increase in marketing expenses. This resulted in OCF increasing by 4.0% to £1,654m. Operating income rose 29% to £699m.

Free Cash Flow was down 4.9% to £473m for the year as OCF growth and lower interest expense was offset by the an incremental £102m investment in our broadband speed upgrade programme. Net cash provided by operating activities was down 9.5% to £1,040m.

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