Telewest posts £19m profit and gains 15,000 subscribers

LONDON – UK cable operator Telewest has reported a second-quarter net profit of £19m compared with a loss of £126m a year ago as the company revealed it had gained 15,000 new subscribers, but saw customer churn rise.

However, while the cable operator added 15,000 new subscribers, churn, or the percentage of customers who leave the service each month, rose to 1.2% compared with 1.1% a year earlier.

The 2004 second-quarter losses were attributed to a charge relating to the company's financial restructuring.

Adjusted earnings before tax, goodwill and ammortisation rose to £158m from £122m in 2004. Second-quarter revenue also rose to £381m from £326m a year earlier.

Telewest said that profits at its content arm Flextech, which owns TV channels Living, Challenge, Trouble and Bravo and is the BBC's partner in the 10 UKTV channels, were up 14% from the second quarter of 2004 to £32m this year.

Eric Tveter, chief operating officer of Telewest, said: "We're taking our fair share of market growth. We think there's room for both cable and satellite."

Last week, sateliite broadcaster BSkyB announced it had added 83,000 new subscribers as profits after tax surged 32% to £425m. Sky said it was on target to hit its 8m subscriber target by the end of 2005.

It has long been expected that Telewest and rival cable TV operator NTL will merge to create a formidable opponent to Sky and Freeview.

However, although both companies have talked about a merger being a logical move, few concrete steps have ever been taken.

Earlier this week, NTL reported its second-quarter results for 2005, adding 66,600 net subscribers.

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