Virgin Media advances stock buy back plan
28 Jul 2011
UK's second-largest pay-television company, Virgin Media Inc advanced its second capital return plan, saying it would buy back as much as £625 million in stock.
Virgin Media would buy the shares by the end of 2012, to take its total buyback to £1 billion pounds since July last year, the company said in a statement. According to the cable company's earlier statement, it would consider further returns to shareholders at the end of 2011.
Chief executive officer, Neil Berkett said in an interview that the company would look at this the end of the year. He added, the stock was undervalued and therefore it would be appropriate to buy the shares back and at some point in time the company would consider increasing the dividend.
Virgin Media, currently in the process of rolling out its 100Mbps broadband service, lost 36,000 net customers in the second quarter.
Investors were concerned, the company was pushing pricing power too hard given the UK's tepid economic growth, analysts say.
The company with a stable subscriber base of 4.8 million cable customers, would not significantly enhance its net additions over the next few quarters, Berkett said today. He added the company had decided that it would continue to aim towards high-quality customers and not go after customers for customers' sake.