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Virgin Media - Full Year And Fourth Quarter 2012 Results

Stock quotes in this article: VMED 

Fixed asset additions (accrual basis) in the full year were up 16% to £883.4m mainly due to increased spend on consumer premise equipment and scalable infrastructure related to the rollout of TiVo set top boxes and our broadband speed upgrade. We incurred £114.1m on the broadband speed upgrade programme in the year.

The total purchase of fixed and intangible assets for the year was £783.2m, which included £101.5m spent on the broadband upgrade programme. Excluding this amount, total purchase of fixed and intangible assets was £681.7m, which represents 16.6% of group revenue.

Leasing

The total amount of fixed assets acquired under capital leases was £10.6m in the quarter. We made principal payments on capital leases of £25.8m and the capital lease balance decreased from £244.2m at the end of the third quarter to £229.0m at the end of the fourth quarter. The interest charge on capital leases was £3.5m during the quarter.

For the full year, the total amount of fixed assets acquired under capital leases was £88.9m, which represented 2.2% of revenue. We made principal payments on capital leases of £97.4m and the capital lease balance decreased from £258.0m to £229.0m during the year. The interest charge on capital leases was £16.0m for the year.

Capital expenditure guidance

It is anticipated that Virgin Media’s cash capital expenditure (purchase of fixed and intangible assets) will remain 15% to 17% of revenue for 2013 and for future years. In addition, it is expected that the cost of fixed assets acquired under leases will continue to be no greater than 2% to 3% of revenue per annum, in line with recent years.

FREE CASH FLOW

Free Cash Flow for the quarter was down 1.4% to £137.6m mainly due to higher purchase of fixed and intangible assets, partially offset by increased OCF and lower net interest expense. Net cash provided by operating activities was down 21% at £232.1m mainly due to the premia paid on the redemption of debt partially offset by increased operating income.

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