Virgin Media turns its first annual profit

Virgin Media has turned its first annual profit since its 2006 launch, the ISP said on Wednesday.

In its latest quarterly and annual financial results, the company said it had a net income of £76m in 2011. Overall, revenues were up by three percent for the year, hitting an annual total of £4bn.

"In a fast-changing industry and an uncertain economic environment, our 2011 results demonstrate the underlying resilience of Virgin Media's business model, with modest revenue growth driving robust [operating cash flow] and record free cash flow," Virgin Media chief Neil Berkett said in a statement.

In 2010, Virgin Media lost £141m, although that was an improvement on the £358m it lost the year before.

Virgin Media's super-fast broadband and TiVo digital video recorder services appear to be part of the success story. The company's TiVo customer base more than doubled in the fourth quarter of 2011, ending up at 435,000 subscribers, and it also picked up 133,000 additional super-fast broadband customers during the quarter.

Virgin Media counts broadband speeds of 30Mbps or above as being 'super-fast'. The company offers these services to its cable customers.

"Since its commercial launch mid-way through the year, the number of TiVo subscribers has grown to almost half a million with a large and growing proportion now using its next generation functionality on a regular basis," Berkett said. "Demand for better broadband also continues to grow fast, with around half of new customers choosing superfast speeds."

The results show that, overall, Virgin lost far more non-cable customers than it gained cable subscribers during 2011 — it ended up 23,000 broadband customers down over the financial year. However, there were more new cable customers in the fourth quarter than departing or switching non-cable customers.

The company's mobile contract customer base also grew by 26 percent during the year, reaching a 1.5 million total.

Meanwhile, Virgin Media's business division saw revenue growth of 6.8 percent to £637m, leading Berkett to note that it was "an increasingly important and growing contributor to the group."