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Frk Ftse Tw Etf | LSE:FLXT | London | Exchange Traded Fund |
Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
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0.3775 | 1.28% | 29.9675 | 29.895 | 30.04 | 30.09 | 29.8875 | 30.005 | 440 | 16:29:52 |
RNS Number:7915K Telewest Communications PLC 18 May 2000 Part One TELEWEST COMMUNICATIONS PLC 1st QUARTER RESULTS 2000 * Telewest Active Digital sales to date of 156,000 * Revenue per customer up 7.6% to #37.31 * 131,000 dial-up internet subscribers, up 373% year-on-year * Revenues up 27% to #239 million * EBITDA up 14% to #58 million Qtr 1 Qtr 1 Change 2000 1999 over 1999 ----------------------------------------------------------------------------- Revenue #239m #188m +27.3% EBITDA (earnings before interest, tax depreciation and amortisation) #58m #50m +14.3% EBITDA margin (EBITDA as a percentage of revenue) 24.1% 26.9% -2.8% pts ----------------------------------------------------------------------------- Residential Services Revenue #179m #143m +25.2% Customers 1.6m 1.4m +203,000 Household Penetration 35.8% 34.7% +1.1% pts Monthly Revenue per Customer #37.31 #34.67 +7.6% Customer Churn* 14.7% - - ----------------------------------------------------------------------------- Business Services Revenue #56m #40m +41.8% ----------------------------------------------------------------------------- ----------------------------------------------------------------------------- Flextech Revenues - acquired 19 April 2000** #41m #39m +3.8% ----------------------------------------------------------------------------- * Excluding Cable London ** Included for information purposes only. Not consolidated into Telewest financial information Commenting on the first quarter results, Adam Singer, Chief Executive of Telewest Communications, said: "The financial performance is good: revenue is up 27% and EBITDA is up 14%. But what I think is noteworthy is that these results have been achieved during a period when the company has been accelerating the rollout of its new digital service and launching important broadband products. While others have been talking about the promise of the digital era, we have been delivering the next generation of broadband services to our customers. We have, to date, signed up 156,000 subscribers for Telewest Active Digital and we are on track to meet our target of 500,000 customers by year end. That roll-out is on schedule and is expected to reach 90% of our homes passed by July. At 31 March 2000 we had 131,000 dial-up internet subscribers following the launch of Surf Unlimited in February. Demand for the product has greatly exceeded expectations which has caused some initial service issues which have now been corrected. We have successfully launched a hi- speed internet access product - blueyonder - which has generated significant interest. In July we are scheduled to launch our broadband portal. Meanwhile, our content division (formerly Flextech) also performed well. Flextech's relatively traditional pay-TV business is adding subscribers and advertising revenue as the digital universe expands. At Flextech Interactive revenues in the first quarter have risen 71%. In addition, the fixed fees already committed by content providers to Telewest's Active Digital shopping platform amount to more than #3.5 million on an annualised basis (and this does not include TV transactions). This may appear a small number in the context of Telewest, but it shows that in our case e-commerce is already producing real revenues. Since the end of the quarter we have been busy integrating Telewest and Flextech in a manner designed to preserve the culture of both companies and create a new media entity that is more than the sum of its parts. Our goal is to create Britain's first "broadbandcaster". The combination of a state of the art network, top quality branded broadband content and a focus on interactive product development gives Telewest the key ingredients for success in the digital age." BUSINESS REVIEW Financial Revenues increased 27.3% to #239 million for the quarter ended 31 March 2000, from #188 million for the same period in 1999. This increase is attributable to the acquisition on 23 November 1999 of the remaining 50% interest in Cable London (#21 million) and to increased market penetration in both residential and business service markets. In particular, the growth in residential telephony and business services revenues was 34.2% and 41.8% respectively in the first quarter of 2000 compared with the corresponding period a year ago. This strong growth has resulted from increases in minutes of use and higher average pence per minute charges for voice and data traffic and the strong performance of our commercial services division. Operating expenses, before depreciation and amortisation, increased by 32.2% to #181 million in the first quarter of 2000 from #137 million for the corresponding period in 1999. This increase is attributable to the Cable London acquisition (#14 million) and to an increase in selling, general and administrative expenses. This reflects the increased operating investment, both in terms of staffing levels and marketing, necessary to roll-out Telewest Active Digital and Telewest's hi-speed internet service, blueyonder. Cable television margins increased 1 percentage point to 50% for the first quarter 2000 from 49% for the fourth quarter, 1999 and by 6 percentage points from 44% for the first quarter of 1999. This follows price increases introduced on 1 February 2000 offset in part by increased programming costs for larger digital packages as compared to analogue packages. The telephony business continues to be impacted by growth in mobile penetration and internet related calls which are significantly altering call usage patterns and generate lower margins. Average minutes of use were up significantly compared with last year although telephony margins for the first quarter of 2000 were down 2 percentage points to 68% from 70% for the fourth quarter of 1999 and by 5 percentage points from 73% for the first quarter of 1999. EBITDA increased by 14.3% to #58 million in the first quarter 2000 from #50 million in the first quarter 1999. Adjusting for the impact of Cable London, EBITDA for the first quarter 2000 increased 3.2% to #58 million from #56 million in the first quarter 1999. EBITDA margins decreased 2.8 percentage points from 26.9% in the first quarter 1999 to 24.1% for the corresponding period in 2000. Residential Services Telewest's household penetration was up 1.1 percentage points to 35.8% at 31 March 2000 from 34.7% at 31 March 1999, which represents approximately 1.6 million homes and 4.0 million consumers. Monthly revenue per household increased by 7.6% to #37.31 in the quarter ended 31 March 2000 compared with the corresponding period a year ago. This is a result of an increasing proportion of homes subscribing to both television and telephony products, up to 62% at 31 March 2000, retail price increases introduced on 1 February 2000 and higher subscriber revenues generated by Telewest Active Digital packages. Customer or household relationship churn which has been reported for the first time this quarter is currently 14.7% on a rolling 12 month basis (excluding Cable London, which was acquired on 23 November 1999). The measurement of household churn allows us to be compared to our competitors in the UK. This measures the rate at which customers disconnect from all Telewest services eliminating double-counting caused by customers moving between single and dual service levels and more accurately reflecting the customer loyalty we are achieving. We will continue to report the product churn numbers separately. As at 31 March 2000, Telewest's television product penetration was 25.6%, a 1.1 percentage points increase over television product penetration at 31 March 1999. Telewest Active Digital sales to date total 156,000, of which 87% or 136,000 have been installed, and of which 51% are subscribers new to Telewest. The roll-out of Telewest Active Digital is progressing to schedule and this service should be available to over 90% of all Telewest homes passed by the end of June 2000. Telewest's range of interactive services continues to grow with agreements now signed with 80 content partners. Norwich Union, Interflora and CNN are some of the brands which have been added to the list of household names that already include W H Smith, Woolworths, Abbey National and Ladbrokes. Telewest expects to continue adding to the list and develop the range and depth of its service. Telewest believes that this is an exciting new revenue opportunity and has already secured annualised fixed fees of #3.5 million, under signed contracts from content providers. Telewest's video-on-demand trial is underway and is progressively being scaled up to include all Telewest Active Digital subscribers in the South East franchise area. Residential telephony product penetration increased to 32.3% at 31 March 2000, up 1.8 percentage points on a year earlier. With second line penetration at 12.2%, this represented over 1.6 million residential telephone lines as at 31 March 2000. Surf Unlimited, the UK s first unmetered internet access service, was launched in February 2000. At 31 March 2000, dial up internet subscribers increased to 131,000, an increase of 373% compared to a year earlier. Blueyonder, Telewest's hi-speed internet service for home personal computers, was launched in March 2000. Initial consumer interest has been positive and the development of Telewest's broadband portal continues on schedule for launch in July 2000. In April 2000, OFTEL confirmed Telewest as one of the selected operators for ADSL trials under Option 2, full local loop unbundling of BT s network. Telewest is well placed to commence Option 2 trials. It already provides broadband interactive services over its cable networks and its customer services and IT infrastructure should enable cost effective delivery over ADSL. Business Services Business services revenues for the quarter ended 31 March 2000 totalled #56 million, up 42% on the corresponding period a year ago. As at 31 March 2000 Telewest had over 60,000 business customer accounts and over 300,000 business telephony lines. Business services revenues include #13 million of revenues for the first quarter 2000 relating to Telewest's commercial services unit which provides national network services to third parties. The commercial services unit was established in January 1999 and had #2 million revenues for the first quarter of 1999. In the third quarter 2000 Telewest intends to launch a hi-speed internet service specifically tailored to meet the needs of the small and medium sized enterprise. This service will be supported by a broadband portal leveraging Telewest's investment in its hi-speed internet network and should provide a platform from which to develop an Application Service Provision business. Flextech (Content Division) Our merger with Flextech was completed on 19 April 2000 and accordingly, the results for Flextech do not form part of these results. Set out below is a summary of the key operational statistics for Flextech in the first quarter 2000. In the future, the results and activities of Flextech will be reported as Telewest's content division. Flextech's turnover, including its share of joint ventures' revenue, increased by 3.8% to #41 million in the first quarter of 2000 compared with the corresponding period a year earlier. This growth has been driven by a 23% increase in the UK multi-channel market to 8.0 million homes at 31 March 2000 up from 6.5 million homes a year earlier, offset in part by lower unit revenues from digital homes which increased by 2.8 million homes to 3.4 million at 31 March 2000 from 0.6 million a year earlier. Advertising revenues (including Flextech's share of joint ventures advertising revenue) increased 17% to #14 million in the first quarter 2000, from #12 million in the same period a year ago. Flextech interactive revenues increased 71% to #0.6 million in the first quarter 2000. Flextech's EBITDA loss reduced to #1.5 million in the three months ended 31 March 2000 from #3.2 million in the three months ended 31 March 1999. In addition to this EBITDA loss, Flextech sold, in January 2000, a 12.5% interest in TV Travelshop to Kuoni for cash proceeds of #6.6 million recognising a pre-tax profit on disposal of #10 million. Corporate Developments On 25 January 2000, Telewest raised net cash proceeds of #534 million from the issue of $450 million 11 3/8% Senior Discount Notes due 2010, #180 million 9 7/8% Senior Notes due 2010 and $350 million 9 7/8% Senior Notes due 2010. Approximately #126 million of these proceeds were used to repay the indebtedness of Cable London and the remainder has been or will be used for general corporate purposes, including operating and capital requirements associated with the roll-out of Telewest Active Digital and blueyonder and the temporary or permanent repayment of additional debt. On 6 March 2000, Telewest and Andersen Consulting announced the formation of a new company to develop interactive broadband applications. The joint venture intends to provide consultancy services and to develop, customise and license innovative solutions for the rapidly emerging broadband industry. Management Structure Following the Flextech merger, the senior management team was reorganised to reflect Telewest's emergence as a vertically integrated communications and media group. Mark Luiz became Chief Executive, Content Division and replaces Brent Harman who is returning to Australia. Philip Jansen assumed responsibility for our residential services division as Managing Director, Consumer Services and Adam Smith became Managing Director, Business Services. As announced on 11 April 2000, Tony Illsley, previously Chief Executive, decided to leave the group to pursue other interests. MediaOne also appointed Simone Brych-Nourry, their third shareholder representative, to the Board in accordance with their existing shareholder rights, effective 18 May 2000. Simone Brych-Nourry has been Chief Counsel of MediaOne International since December 1994. Outlook Telewest is now a leading provider of broadband services in the UK. With product development initiatives progressing to schedule, the necessary increase in operating capacity complete, the Flextech content business integration well on track and a new senior management team in place, Telewest believes it is well positioned. Enquiries to Telewest Communications plc Charles Burdick, Group Finance Director 01483 750900 Parm Sandhu, Director, Investor Relations 01483 587061 and at Brunswick Alison Hogan 020 7404 5959 Notes: The following is included in connection with legislation in the United States, the Safe Harbour Statement under the US Private Securities Litigation Reform Act of 1995 The foregoing includes certain forward looking statements that involve various risks and uncertainties which could lead to actual results significantly different than those anticipated by Telewest. For a discussion of certain of these risks and uncertainties see the Company's Registration Statement on Form F-4 filed with the US Securities and Exchange Commission on 6 March 2000. Unless otherwise specified, all references to financial information are on a UK GAAP basis. Telewest Communications plc Operating Statistics - Owned and operated ----------------------------------------------------------------------------- Actual Pro forma (1) RESIDENTIAL SERVICES Net additions Net additions Q1 2000 Q1 1999 Homes Marketed 3,770 27,417 Customer Homes Added 6,791 25,576 Cable Television Subscribers (16,466) 31,391 Telephony Subscribers 16,362 28,242 Telephone Lines 21,614 50,827 Internet Subscribers 71,109 5,454 ----------------------------------------------------------------------------- As at 31 March As at 31 March 2000 1999 Actual Pro forma (1) Cable television and residential telephony subscribers* 979,796 890,425 Cable television only subscribers 159,298 187,114 Residential telephony only subscribers * 453,263 446,899 Total residential customers 1,592,357 1,524,438 * Includes subscribers also subscribing for internet services. Homes marketed 4,447,594 4,395,131 Household penetration 35.8% 34.7% Customer churn (excluding Cable London) 14.7% - ----------------------------------------------------------------------------- Cable television subscribers 1,139,094 1,077,539 Active Digital Subscribers 103,828 - Cable television penetration 25.6% 24.5% Churn rate 26.6% 27.5% ----------------------------------------------------------------------------- Residential telephony subscribers 1,433,059 1,337,324 Residential telephony penetration 32.3% 30.5% Residential telephone lines 1,607,624 1,442,444 Second line penetration 12.2% 7.9% Churn rate per line 20.7% 21.2% ----------------------------------------------------------------------------- Total internet subscribers 131,415 27,775 ----------------------------------------------------------------------------- BUSINESS SERVICES Actual Pro forma (1) Net additions Net additions Q1 2000 Q1 1999 ----------------------------------------------------------------------------- Business customer accounts 2,871 1,473 Business telephony lines (1,923) 20,792 ----------------------------------------------------------------------------- As at 31 March As at 31 March 2000 1999 Actual Pro forma (1) ----------------------------------------------------------------------------- Business customer accounts 61,218 47,137 Business telephony lines 305,167 254,553 Average number of lines per customer account 5.0 5.4 Annualised revenue per customer account #3,471 #3,718 ----------------------------------------------------------------------------- Telewest Communications plc As at 31 March 2000 Telewest Franchises (2) Cable London Franchises (3) 31 March 31 March 1999 2000 1999 2000 ----------------------------------------------------------------------------- Number of franchises 37 37 4 4 Residential customers 1,389,737 1,457,429 134,701 134,928 Residential dual customers 828,434 908,171 61,991 71,625 Percentage of dual customers 59.6% 62.3% 46.0% 53.1% Monthly revenue per customer #34.68 #36.98 #39.21 #41.98 ----------------------------------------------------------------------------- CABLE TELEVISION Homes passed 4,222,421 4,271,666 397,455 437,622 Homes passed and marketed 4,013,298 4,059,341 381,833 388,253 Subscribers 981,044 1,037,235 96,495 101,859 Penetration rate (5) 24.4% 25.6% 25.3% 26.2% Average monthly revenue per subscriber (6) #21.89 #20.72 #23.36 #19.80 Average churn rate (7) 27.1% 26.2% 31.9% 31.2% ----------------------------------------------------------------------------- RESIDENTIAL TELEPHONY Homes passed 4,043,943 4,093,182 397,455 437,622 Homes passed and marketed 3,998,888 4,050,061 381,833 388,253 Subscribers 1,237,127 1,328,365 100,197 104,694 Penetration rate (8) 30.9% 32.8% 26.2% 27.0% Lines 1,333,225 1,490,917 109,219 116,707 Average monthly revenue per line (9) #20.30 #21.57 #27.92 #28.74 Average churn rate per line (10) 20.6% 20.4% 28.9% 24.1% ----------------------------------------------------------------------------- BUSINESS SERVICES Business customer accounts 43,701 57,158 3,436 4,060 Business lines 234,454 277,472 20,099 27,695 Average business lines per customer (11) 5.4 4.9 5.8 6.8 Average monthly revenue per business line (12) #59.49 #50.30 #57.56 #49.69 Average annualised revenue per customer (13) #3,703 #3,240 #3,920 #4,371 ----------------------------------------------------------------------------- Telewest Communications plc As at 31 March 2000 Telewest Group Franchises (4) 31 March 1999 2000 Pro forma (1) Number of franchises 41 41 Residential customers 1,524,438 1,592,357 Residential dual customers 890,425 979,796 Percentage of dual customers 58.4% 61.5% Monthly revenue per customer #34.96 #37.31 ----------------------------------------------------------------------------- CABLE TELEVISION Homes passed 4,619,876 4,709,288 Homes passed and marketed 4,395,131 4,447,594 Subscribers 1,077,539 1,139,094 Penetration rate (5) 24.5% 25.6% Average monthly revenue per subscriber (6) #22.02 #20.63 Average churn rate (7) 27.5% 26.6% ----------------------------------------------------------------------------- RESIDENTIAL TELEPHONY Homes passed 4,441,398 4,530,804 Homes passed and marketed 4,380,721 4,438,314 Subscribers 1,337,324 1,433,059 Penetration rate (8) 30.5% 32.3% Lines 1,442,444 1,607,624 Average monthly revenue per line (9) #20.87 #22.10 Average churn rate per line (10) 21.2% 20.7% ----------------------------------------------------------------------------- BUSINESS SERVICES Business customer accounts 47,137 61,218 Business lines 254,553 305,167 Average business lines per customer (11) 5.4 5.0 Average monthly revenue per business line (12) #59.34 #50.24 Average annualised revenue per customer (13) #3,718 #3,471 ----------------------------------------------------------------------------- Telewest Communications plc Owned and Operated Franchises As at 31 March 2000 (1) Operating statistics on a proforma basis assume the Cable London acquisition had taken place on 1 January 1999. (2) Represents the 37 cable franchises owned and operated by the Telewest Group following the General Cable merger and the Birmingham acquisitions (collectively the "Telewest Franchises"). (3) Consists of the four cable franchises owned and operated by Cable London (collectively, the "Cable London Franchises"). Prior to 23 November 1999, these franchises were owned approximately 50% by Telewest and approximately 50% by NTL (Triangle) LLC as successor to Comcast, a wholly owned subsidiary of NTL, Inc. They are now owned 100% by the Telewest Group. (4) Represents the Telewest Franchises and the Cable London Franchises, (the "Telewest Group franchises"). (5) Cable television penetration rate at a specified date represents (i) the total number of cable television customers at such date, divided by (ii) the total number of homes passed and marketed for cable television at such date. (6) Average monthly revenue per subscriber for each period represents (i) the average monthly cable television revenue for such period, divided by (ii) the average number of cable television subscribers in such period. (7) Average cable television churn rate for the period represents (i) the total number of cable television customers who terminated basic service or whose service was terminated during such period, divided by (ii) the average number of cable television customers in such period. (8) Residential telephony penetration rate at a specified date represents (i) the total number of residential cable telephony customers at such date, divided by (ii) the total number of homes passed and marketed for residential cable telephony at such date. (9) Average monthly revenue per residential line for each period represents (i) the average monthly residential cable telephony revenue for such period, divided by (ii) the average number of residential cable telephony lines in such period. (10) Average residential telephony churn rate per line for the period represents (i) the total number of residential cable telephony lines terminated by customers of the company providing the lines during such period, divided by (ii) the average number of residential cable telephony lines in such period. (11) Average number of business lines per customer at a specified date represents (i) the number of business cable telephony lines at such date, divided by (ii) the number of business cable telephony customer accounts at such date. (12) Average monthly revenue per business line for each period represents (i) the average monthly business cable telephony revenue for such period, divided by (ii) the average number of business cable telephony lines in such period. (13) Average annualised revenue per customer account for each period represents (i) the average monthly business services revenue for each period divided by (ii) the average number of business services customer accounts in such period, multiplied by twelve months. MORE TO FOLLOW QRFFGGMKLNRGGZM
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