Virgin begins to beef up Liberty Global

Joseph O'Halloran | 06-11-2013
In the first full quarter with Virgin Media in its consolidated figures, Liberty Global (LGI) has reported much improved revenues but with a rather more modest profit growth. For the three and nine months ended 30 September 2013, the global cable company reported revenue increased 74% to $4.4 billion and 36% to $10.3 billion, respectively, as compared with the corresponding prior year periods. The principal driver of reported growth for each period was the inclusion of Virgin after the 7 June acquisition date. The rising revenues were the driver for operating income to increase 3% to $522 million and by 1% to $1.5 billion for the three and nine month periods. By the end of the quarter, LGI offered a total of 47.8 million services, 21.8 million of these video-related.The quarter saw the launch of Horizon TV in Ireland in mid-August and Germany in September. Through the end of October 2013, LGI had more than 365,000 Horizon TV subscribers in the Netherlands, Switzerland, Ireland and Germany, with each market accounting for over 200,000, 110,000, 30,000 and 25,000 subscribers, respectively. Additionally, thanks to Virgin subs, it ended Q3 with 1.8 million TiVo subscribers in the UK an increase of 165,000 from June 30, 2013. Overall during Q3 2013 there was an organic RGU loss of 53,000 video subscribers, an attrition described by LGI as its best Q3 result since 2007. The quarterly results were driven by the continued appeal of market-leading bundles, featuring the most advanced video and broadband services available, said LGI President and CEO Mike Fries. He commented: " In the U.K., penetration of our TiVo product is approaching 50%, while Horizon TV has been launched in four European markets, most recently in Germany and Ireland....With respect to Virgin Media, we now expect to achieve up to double our initial $180 million estimate of combined synergies for OCF and capital expenditures once the integration process is substantially complete. In addition, the Chellomedia Sale is expected to close in Q1 2014 and the resulting 750 million ($1.0 billion) in proceeds will provide us with increased flexibility to invest in more strategic content going forward.