Virgin Media 02 - comment

Operational results were below our expectations, but we do not expect anything more than very slight softness in the SSNs and the SUNs. Revenue was £2.4bn (-4% year-over-year); we had expected Revenue growth of 4%. The difference was a 2% sequential decline in ARPU, whereas we anticipated a 2% rise. The lower revenue led to the EBITDA miss, with margins in line with our forecast. The miss was due to higher-than-expected marketing activity in Q1, related to the phasing of renewals. We are not changing our expectations yet. VMED is beginning to see stabilisation in broadband subscribers as it rolls out fibre. We will review our model after today's Liberty Global call.