Virgin Media shares soar with broadband expectation

Virgin Media's shares leapt more than 7% today after it announced better-than-expected results with plans to launch ultra-powerful 100 megabit broadband this year.

Pre-tax profits, described as "operating cash flow", rose 15.3% to £366 million in the final three months of 2009. Revenues grew 3.3% to £980 million.

Chief executive Neil Berkett said: "Recession or no recession, more customers are buying more products."

Virgin signed up 40,000 new customers in the final three months of 2009, and has 4.1 million cable broadband subscribers.More are also switching to its faster broadband services above 20 megabits as several members of a typical household might use the service simultaneously.

Virgin said 60% of all customers have "triple play" of broadband, pay-TV and fixed-line telephone products. Average revenue per user in cable homes was up 5.8% to £44.81 a month.

Monthly churn — the rate at which customers quit — was steady at 1.2% despite some price increases.
Analysts at Goldman Sachs praised the "very strong results".

Virgin, which has £5.93 billion of net debt, posted a net loss of £94.4 million.