Liberty Global has shed a number of assets across Europe over the last 12 months
Liberty Global has posted a robust set of figures for the first quarter of 2019, following the sale of a number of its key assets across central and eastern Europe.
Following the sale of its assets in Germany, Hungary, Romania and the Czech Republic to Vodafone, revenues at Liberty Global fell by 10 per cent in Q1 2019. However, the company has seen strong growth in its UK operations, as Virgin Media’s Project Lightning continues its at scale rollout.
"A year ago we announced the sale of our operations in Germany, Hungary, Romania and the Czech Republic to Vodafone, which represents the largest divestiture in company history. Since deal announcement we have crossed a number of key milestones and the European Commission is currently in the final stages of its review. We are confident that we remain on track for a successful completion of this transaction during the summer…We will provide updates in due course regarding our capital allocation decisions with the total proceeds from these transactions," said Liberty Global’s CEO, Mike Fries.
"From an operating perspective, Virgin Media continued to deliver improved subscriber trends. During the first quarter, Virgin Media delivered nearly 60,000 RGU additions, a 32% year-over-year improvement driven by 26,000 new customer relationships. On the innovation front, we are pushing the envelope in the U.K. In April, we rolled out compelling new fixed-mobile converged bundles, boosted our top broadband speed to 500 Mbps and launched Intelligent WiFi, a cloud-based adaptive system that’s designed to significantly improve our customers’ in-home WiFi experience… We continue to extend our reach with Project Lightning, where we are building 400,000-500,000 new premises every year."
Analysts greeted the figures with measured optimism, as Liberty Global looks to steady the ship after shedding so much weight in Europe. Paolo Pescatore, tech, media and telco analyst at PP Foresight, believes that Liberty will maintain a sharp focus on Virgin Media in the short to mid-term.
“Overall, [this has been] a modest quarter given the challenging environment," he said.
“Virgin Media now remains the crown jewels in Liberty Global’s portfolio, but also a problem child. Moves to divest other assets shows a desire to leave Europe by maximising the value of each asset.
“The latest moves to strengthen Virgin Media’s portfolio suggests that Liberty Global is committed to the UK for the short to medium term. Given the renewed push towards convergence and importance of owning fixed and mobile assets (due to 5G and more), it is feasible that it might acquire or merge with a UK mobile operator.”
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