Rise in high-speed broadband users pushes up Virgin profits

Cable telecoms and television group Virgin Media has reported a rise in first-quarter profits after adding more than 300,000 “superfast” broadband subscribers.

The firm, which agreed to a $23.3 billion (£15.2bn) takeover approach from US cable giant Liberty Global in February, also said its earnings were boosted by the popularity of its TiVo set-top box.

Underlying pre-tax profits rose 7.9 per cent to £406 million, on revenues 3.6 per cent higher at £1 billion.

Virgin Media said 65 per cent of its customers are so-called “triple-play” users, subscribing to broadband, cable television and fixed-line telecoms.

The number of subscribers using its TiVo service grew by 171,900 to 1.5 million, equivalent to 40 per cent of all television customers, while those paying for “superfast” broadband – rated at 30 megabits per second or higher – rose by 337,900 to 2.5 million.

Chief executive Neil Berkett, who will leave the group when its takeover by Liberty is complete, said: “The great value we provide through our Collections packages, which bundle superfast broadband and our next generation TiVo service, has seen new customers join and our existing customers stay loyal to us. This positive momentum in the business positions us well for our planned merger with Liberty Global.”

Revenues at the group’s Virgin Media Business division, which counts Sky and O2 parent company Telefonica among its customers, dipped 4.1 per cent to £163.4m, but managing director Tony Grace said sales trends were improving despite the “challenging” economic environment.