Australian Consumer Behavioural Survey – 2020 Part 1: Working from Home\ Sky UK – Q1 2020 results\ Vodafone UK – Struggling for momentum\ Virgin Media UK – Fibre questions remain


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Welcome to the Venture Insights newsletter!
In this week’s edition, we look at: 

  • Australian Consumer Behavioural Survey – 2020 Part 1: Working from Home
  • Sky UK – Q1 2020 results
  • Vodafone UK – Struggling for momentum
  • Virgin Media UK – Fibre questions remain

CHART OF THE WEEK

Do you agree or disagree with the following statements?



Source: Venture Insights Australian Consumer Behavioural Survey, April 2020

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Venture Insights consumer survey shows higher technology use with working from home

Prior to COVID-19 (before 1 March) did you work from home? (Respondents who were in part or full time employment)



Source: Venture Insights Australian Consumer Behavioural Survey, April 2020

This survey report on working from home is the first of three reports based on a behavioural change survey conducted by Venture Insights and commissioned by NBN Co (completed 28th April 2020). The aim of the survey was to understand how new needs due to COVID-19 had changed consumer broadband and technology usage. This first report investigates how increased working from home during social distancing has affected Australians’ internet and technology usage. Amongst other results, we found that access to fast broadband had made 81 per cent of respondents who could work from home feel more secure in their jobs during the COVID-19 crisis, with 83 per cent saying they could not have completed their jobs without it. Click here to download our free report.

Click to read report

Sky UK – Q1 2020 results

UK weekly TV viewing share, Sky Sports and Sky News, 2020 (%)



Source: ENDERS ANALYSIS, COMPANY REPORTS

Sky posted understandably weak results for Q1, amid the ongoing COVID-19 crisis. Revenue fell by 3.7% year-on-year, with most sports subscriptions on pause and advertising markets in shock. The company has guided to a 60% fall in EBITDA over the next two quarters, as it bears the extra costs of a very condensed sporting schedule, but much will depend on what level of rebate it negotiates from the rightsowners for the disruption. On screen, Sky faces similar production issues to other broadcasters, but it has continued to enhance its platform gatekeeper role and strong content offering, most recently by integrating Disney+. For more details, click to read a report from our UK research partner, Enders Analysis.

Click to read report

Vodafone UK – Struggling for momentum

Organic EBITDA and service revenue growth



Source: ENDERS ANALYSIS, COMPANY REPORTS

Vodafone’s financial metrics appear to be slowly ticking up and it is making some progress in narrowing its performance gap to peers. Signs that it may be moving away from a discount-led convergence strategy in Germany are very positive. Organic EBITDA growth is highly flattered by one-off items and, as is frequently the case, even this headline EBITDA growth for FY20 is wiped out by currency depreciation in ‘Rest of World’ countries. This lack of real progress on EBITDA and FCF and the muted outlook for both exacerbates Vodafone’s tight leverage position. There seems very little prospect of it unsettling the O2/Virgin Media JV in the UK. For more details, click to read a report from our UK research partner, Enders Analysis.

Click to read report

Virgin Media UK – Fibre questions remain

UK cable revenue growth and group OCF growth



Source: ENDERS ANALYSIS, COMPANY REPORTS

Virgin Media’s Q1 financial performance was in line with its subdued outlook, with its key problem being a lack of demand (yet) for the ultrafast services that only it can widely provide. CV-19 has delayed the marketing of ultrafast services from competitors, likely suppressing demand more generally; in the longer term however, the working-from-home experience will likely help drive adoption. Virgin Media still has to solve the problem of alleviating the long-term threat of full fibre builds negating its network advantage; we believe that the best answer is to expand to a nationwide service via wholesale, and the merger with the nationwide O2 reinforces this. For more details, click to read a report from our UK research partner, Enders Analysis.

Click to read report