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Virgin Media - Full Year And Fourth Quarter 2012 Results

Stock quotes in this article: VMED 

Retail data revenue was up 2.2% to £75.0m in the quarter. Retail voice revenue was down 14% to £33.8m, reflecting a continuation of the structural decline in this area. Wholesale data revenue was down 5.3% at £43.1m. Wholesale data revenue in the fourth quarter of 2011 had been particularly high. Wholesale voice revenue was down £2.2m at £5.0m. Local Area Network Solutions and other revenue was flat at £8.4m.

RESULTS FOR THE THREE MONTHS ENDED DECEMBER 31, 2012

Comparisons of financial and operating statistics are to the fourth quarter of 2011, unless otherwise stated.

TOTAL REVENUE

Total revenue was up 1.6% to £1,040m, due to consumer revenue growth partially offset by a fall in business revenue.

OPERATING COSTS AND SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (SG&A)

Operating costs (exclusive of depreciation) were £405.8m, up 0.7% as higher consumer cost of sales were partially offset by lower business cost of sales and lower network and other operating costs. Gross margin percentage grew slightly from 60.6% to 61.0%.

SG&A fell by 2.7% to £191.7m reflecting lower employee and outsourcing and other costs, partially offset by increased marketing and facilities costs.

OPERATING INCOME BEFORE DEPRECIATION, AMORTIZATION, GOODWILL AND INTANGIBLE ASSET IMPAIRMENTS AND RESTRUCTURING AND OTHER CHARGES (OCF)

OCF was up 4.4% at £442.2m, mainly due to improved revenue and gross margin and reduced SG&A expenses.

OPERATING INCOME

Operating income increased 25% to £208.6m, mainly due to the growth in revenue and gross margin, reduced SG&A and reduced amortization expense.

Depreciation expense was up 2.8% at £235.0m. The increase in depreciation expense was primarily a result of depreciation in respect of fixed asset additions with a generally shorter useful economic life than existing assets, combined with the acceleration of depreciation on certain assets that will no longer be required as a result of our re-tiering program, partially offset by fixed assets becoming fully depreciated.

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