For the year ending March 31, net income increased to GBP 22.4m ($40.7m), from GBP 14.8m ($27m) the previous year. Strong customer growth drove a 15% rise in sales, which increased to GBP 521.3m ($949m) from GBP 453.3m ($825m) in fiscal year 2004.
The UK-based virtual mobile operator said it has been unaffected by a broader slowdown in consumer spending on the high street, despite the lower amount of cash spent by each user, ARPU, which was GBP 127 ($231), compared to GBP 147 ($267) in March 2004.
It blamed the decline on the impact of regulatory cuts in interconnect rates, and also said that many of the customers it poached from other networks are lower spenders, which dilutes ARPU rates.
More worrying was customer churn, which was 17.5% compared to 14% in 2004. However, the operator insisted the figure was in line with industry trends.
Chief executive Tom Alexander remained upbeat when revealing the results. In the past three years we’ve tripled our revenues, and 2005 has been our best year yet, he said. Our strong performance shows Virgin Mobile has the ability to sustain sector-leading service revenue growth within a competitive environment.
Virgin Mobile is predominantly a pre-pay business aimed at the youth market. However, it recently unveiled a contract service, and the number of active users was up 24% at 4.03 million from 3.24 million. The operator does not own a network, but instead rents capacity using T-Mobile’s infrastructure.
Looking forward, Virgin Mobile said it remains confident in achieving strong growth for the year ahead and expects to increase revenue by about 15% over the year.
Last July it raised $230m after holding an IPO on the London Stock Exchange.
