Turnaround - and back again?

29 October 2009 By Una Galani Follow @ugalani

Two years ago, the UK cable operator was a struggling takeover target. But a strong set of quarterly numbers reinforces its ongoing transformation. The risk for investors is that Virgin fails to act swiftly to protect the broadband network core to its claimed competitive edge.

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Virgin Media added 17,800 net customers in the third quarter and increased average revenue per user to a new high in what the cable operator described as its best ever performance.

Average revenue per user rose 5% to £44.24 as Virgin delivered its second consecutive quarter of record spend. The net number of customers leaving Virgin, or churn, remained flat at 1.5%.

Total revenues rose 1.3% to £935m, compared to the same time last year. Free cash flow rose 6% to £109m beating analyst consensus expectations.

Neil Berkett has been chief executive of Virgin since March 2008. Virgin's shares, which are primary listed in New York, have risen 249% in the past year to $12.51.

Virgin's market capitalisation is £2.7bn, net debt stood at £5.9bn as of September 30.

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