Telewest Tints Cable Cloud with Silver Lining

03 August 2001

US-owned Telewest, Britain’s second largest cable operator after NTL, announced better than expected first-half results and said it had secured sufficient funding to see it out of the red.

Solid gains in subscriber levels, a lower ‘churn rate’ (subscriber defections), and increased revenues-per-customer painted a brighter picture with break-even predicted by the beginning of 2004.

The upbeat report brought a silver lining to the cloud that recently enveloped the nation’s cable industry amid doubts of viability.

Claiming the highest-spending cable customers in Europe following a 4% increase in monthly revenues to £39.07 per subscriber, Telewest chief executive Adam Singer was in bullish mode: “We are a full-funded company in the execution phase of our business plan,” he said.

But investors are not yet breaking out the bubbly. Telewest’s pre-tax losses soared to £413m (£296m in 2000) after increased depreciation and interest payments. Losses per share hit 14.4p, compared with 11.6p last year.

Turnover for the six months to June 30 increased by 24% to £648m, partly due to the acquisitions last year of cable rival Eurobell and content provider Flextech. EBITDA (earnings before interest, tax depreciation and amortization) were £142m (£122m).

According to the Financial Times, most analysts believe Telewest’s deficit is nearing its nadir and will reduce next year.

News source: Financial Times