LONDON, April 24 (Reuters) - Cable operator Virgin Media posted a 54 percent rise in first quarter free cashflow and announced a series of major business deals onWednesday, showing the attraction of a company that is about tobe sold to Liberty Global.
Virgin, which is to be sold to John Malone's Liberty for $15.75 billion in stock and cash, added 8,600 newcustomers during the three months to the end of March.
That was below forecasts of 15,000 new additions, but likeprevious quarters, the company increased levels of customerloyalty and extracted more cash from each user with a pricerise, allowing it to drive the company's overall financialperformance.
Virgin's Business division, which competes with the likes ofBT to provide connectivity to regional governments andcorporations, also signed three new large contracts withtelecoms groups BSkyB, Telefonica and a thirdoperator, which a person familiar with the situation said wasVodafone.
The solid operating performance meant free cash flow was up54 percent to 135 million pounds ($206 million), slightly aheadof forecasts and benefiting from the heavy investment thecompany made into its broadband network last year.
"This positive momentum in the business positions us wellfor our planned merger with Liberty Global," outgoing ChiefExecutive Neil Berkett said.
The first quarter results are likely to be the last set madeby Virgin before the deal completes.
Analysts at Goldman Sachs said the results showed thatcustomers had accepted the price rise, and that the three newbusiness wins helped a division which had otherwise slightlymissed forecasts.
Vodafone (VOD)