Virgin Media Publish Full Year and Fourth Quarter 2012 Results

virgin_mobile_logo-FTVirgin Media Inc. (NASDAQ: VMED; LSE: VMED) announces results for the year and quarter ended December 31, 2012.

Highlights:

MVNO grows its mobile contract base by 12% but declines in prepay and changes to mobile termination rates hit revenues

Mobile revenue for the year was £554.8 million, up £1.9 million from 2011. Virgin said this was relatively flat compared to 2011 as strong contract revenue growth was offset by prepay revenue decline and changes to mobile termination rates (MTRs). Virgin’s mobile revenue for Q4 was £143.1 million, an increase of £900,000 year-on-year and £6.3 million sequentially.

Contract service revenue increased 8.9 per cent to £399.8 million in 2012, while prepay service revenue declined by 18 per cent to £140.7 million. Virgin said the MTR change reduced the amount of inbound mobile revenue by around £24.1 million and that it would have increased by 4.5 per cent without this factor..

Contract service revenue in Q4 rose sequentially by 1.7 million to £102.3 million, while prepay service revenue for the quarter rose £1.7 million to stand at £34.9 million.
Virgin increased its contract base by 12 per cent to 1.7 million subscribers with the addition of 185,000 contract customers in 2012. However, this was down from the 313,100 additions made in 2011, and 38,000 in Q4 2012, a sharp fall from the 102.5 million subscribers added a year earlier.

The firm’s prepay base continues to fall as it lost 32,100 customers in Q4 – 31,400 less than it lost in the same period a year ago but eight million more than what it lost in the previous quarter. Virgin now has 1.33 million prepay customers, with its total mobile base standing at 3.04 million subscribers.

Mobile ARPU was £15.13 in Q4, up 41p sequentially but down 33p from the same three month period a year earlier.
At the end of the quarter, Virgin had around 834,600 cable customers with at least one Virgin Mobile contract, which is up 15 per cent year-on-year. These homes had around 1.2 million contract mobiles.

Solid financial performance

  • * Revenue up 2.7% to £4,101m for the year; up 1.6% to £1,040m for the quarter
  • * OCF(1)up 4.0% to £1,654m for the year; up 4.4% to £442m for the quarter
  • * Operating income of £699m for the year; £209m for the quarter* FCF(2)down 4.9% to £473m for the year; down 1.4% to £138m for the quarter
  • * Net cash provided by operating activities of £1,040m for the year; £232m for the quarter
  • * Average number of shares in issue reduced 12% in the year with the repurchase of 21m shares

Multiple sources of high quality revenue growth

* Cable revenue up 3.0% for the year; up 3.8% in the quarter* Net cable customer additions of 88,700 in the year, 42,700 in the quarter* Cable ARPU up 2.1% to £48.87 in the quarter* On-going improvement of customer base mix in the quarter* TiVo customers increased 896,900 in the year, 187,300 in the quarter* Paying TV customers(3)increased 210,000 in the year, 59,900 in the quarter* Superfast broadband customers (30Mb and above) increased 1.5m in the year, 419,400 in the quarter* Business division revenue up 5.2% for the year; down 4.5% in the quarter

Neil Berkett, Chief Executive Officer of Virgin Media, said: ’2012 was a year of record cable customer growth, where mainstream demand for superfast broadband and TiVo has led to lower churn and a strong increase in new subscribers. Combined with growth in our business division, we have delivered solid financial progress.’

Note: The notes preceding the Appendices relating to non-GAAP financial measures and other matters and the Appendices to this earnings release are considered an integral part of the financial and operational information in this release. Financial and statistical information is as at and for the three months ended December 31, 2012, unless otherwise stated. Comparisons of financial and operating statistics are to the fourth quarter of 2011, unless otherwise stated. Where financial information is given for the year ended December 31, 2012, any comparisons are to the year ended December 31, 2011 unless otherwise stated.
Contacts

Investor Relations:
Richard Williams: +44 (0)1256 753037
/richard.williams@virginmedia.co.UK
Phil Rudman: +44 (0)1256 752677
/phil.rudman@virginmedia.co.UK

Media:
Gareth Mead: +44 (0) 20 7909 3289
/gareth.mead@virginmedia.co.UK

Tavistock
Matt Ridsdale: +44 (0) 20 7920 3150
/mridsdale@tavistock.co.UK
Lulu Bridges: +44 (0) 20 7920 3150
/lbridges@tavistock.co.UK

Conference call details
There will not be a conference call to specifically discuss these results. However, there will be a conference call to discuss the combination transaction with Liberty Global, Inc. Details of that conference call can be found in the press release detailing that transaction.

Liberty Global
On February 5, 2013, Liberty Global, Inc. and Virgin Media Inc. announced that they had entered into an agreement, subject to shareholder approvals, pursuant to which Liberty Global, Inc. will acquire Virgin Media Inc. in a stock and cash merger. For further information, please see the press release announcing the proposed merger and other documents filed or to be filed with the SEC as further detailed at the end of this release.

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. Lynx Europe Limited, a company that has been established in connection with the transaction, will file a registration statement with the Securities and Exchange Commission (SEC), which will include a joint proxy statement of Virgin Media Inc. and Liberty Global, Inc. VIRGIN MEDIA STOCKHOLDERS ARE ADVISED TO READ THE REGISTRATION STATEMENT/JOINT PROXY STATEMENT WHEN IT BECOMES AVAILABLE (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. Investors may obtain a free copy of the registration statement/joint proxy statement (when it becomes available) and other relevant documents filed by Liberty Global and Virgin Media with the SEC at the SEC’s Web site at http://www.sec.gov. The joint proxy statement and such other documents filed by Virgin Media with the SEC may also be obtained for free from the Investor Relations section of Virgin Media’s web site ( www.virginmedia.com) or by directing a request to Virgin Media Limited, Media House, Bartley Wood Business Park, Hook, Hampshire, RG27 9UP, UK, Attention: Investor Relations. Copies of documents filed by Liberty Global with the SEC may also be obtained for free from the Investor Relations section of Liberty Global’s website ( www.lgi.com) or by directing a request to Liberty Global, 12300 Liberty Boulevard, Englewood, Colorado 80112, Attention: Investor Relations.

Virgin Media and Liberty Global and their respective directors, executive officers and other members of their respective management and employees are deemed to be participants in the solicitation of proxies from their respective stockholders in connection with the proposed transaction. Information concerning the interests of Virgin Media’s participants in the solicitation, which may be different than those of Virgin Media’s stockholders generally, is set forth in Virgin Media’s proxy statement relating to its 2012 annual meeting of stockholders filed with the SEC on April 30, 2012. Information concerning the interests of Liberty Global’s participants in the solicitation, which may be different than those of Liberty Global’s stockholders generally, is set forth in Liberty Global’s proxy statement relating to its 2012 annual meeting of stockholders filed with the SEC on April 27, 2012. Additional information regarding the interests of those deemed participants in the proposed transaction will be included in the registration statement/joint proxy statement to be filed with the SEC in connection with the proposed transaction.

Forward-looking statements Expand

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.

Download the Press Release; Virgin Media Investor Relations -New Release, or Virgin Media Inc 2011 Glossy 10K

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