News 2004
Virgin Mobile IPO - Announcement of offer price at 200p per share
21/07/2004
Not for release, publication or distribution in, or into, the United States, Canada, Australia or Japan
Virgin Mobile Holdings (UK) plc (“Virgin Mobile”), the UK’s largest mobile virtual network operator (MVNO), and the Virgin Group of companies today announce that an offer price of 200p per share has been set in respect of the initial public offering to institutional investors of existing Virgin Mobile shares by Virgin Group (the “Global Offer”).
Based on the offer price:
- Enterprise value of £811m (based on illustrative unaudited pro forma net debt as at 31 March 2004 of £311m*)
- Gross proceeds of the Global Offer will be £125 million
- Ordinary share capital valued at £500 million
- Global Offer consists of 62.5 million ordinary shares
Offer details
- Free float of approximately 25% (before any over-allotment arrangements)
- In addition, Virgin Group has entered into an over-allotment arrangement with the underwriters in connection with the Global Offer, which may result in the disposal of a further 6.25 million ordinary shares at the offer price. If the over-allotment arrangements are exercised in full, the free float would increase to 27.5%.
- Conditional trading in the shares begins at 8.00am today. Admission and unconditional dealings are expected to take place at 8.00am on 26 July 2004.
- JPMorgan and Morgan Stanley are acting as joint global co-ordinators, joint bookrunners and joint sponsors of the Global Offer. Investec Securities is co-lead manager. JPMorgan, Morgan Stanley and Investec Securities are acting as underwriters.
Sir Richard Branson, Virgin Mobile’s Honorary President, said:
"We are very happy that Virgin Mobile is floating on the London Stock Exchange, particularly given the difficult markets which have seen several other IPOs abandoned this year.
“Virgin Mobile is a great business with an excellent growth record and I am delighted some equally excellent City investors want to share in its long-term future.
“Since the launch of Virgin Mobile in the UK five years ago, Virgin Group has carried out an unprecedented programme of investment in what have become trailblazing companies in their home markets, such as Virgin Blue and Virgin Mobile USA. Virgin Group will realise around £400 million from this process, in pre-float proceeds and equity gains; this will be retained for future investment in new Virgin ventures throughout the world, with a major emphasis on the United States (where the dollar is weak), China and Africa.
“We remain committed to Virgin Mobile’s long-term future and our current intention is to remain a substantial shareholder post float.”
Tom Alexander, Virgin Mobile’s Chief Executive Officer, said:
“When we launched Virgin Mobile in 1999 our ambition was to see the company flourish and grow and one day float on the London Stock Exchange. I would like to thank all of Virgin Mobile’s dedicated staff who have helped build such a successful business. As a management team we will remain focused on being a dynamic and exciting alternative to the other networks and continuing to attract customers in large numbers. We are clearly focused on building the strength of our business and brand for the long term; we aim to continue to delight our customers and to deliver growth in earnings and cash generation for our shareholders.”
Charles Gurassa, Virgin Mobile’s Chairman, said:
“I am delighted to be chairing Virgin Mobile as it embarks on the next stage of its life as a PLC and look forward to welcoming all our new shareholders on board. We have a great management team in place and a unique and innovative culture. We will strive to continue to grow the business, to create value for our shareholders and to provide outstanding service for our customers.”
For further information contact:
| Virgin Mobile | Steven Day |
| 07931 777777 | |
| Alison Bonny | |
| 07802 430276 | |
| Finsbury | James Murgatroyd |
| Julius Duncan | |
| Don Hunter | |
| 020 7251 3801 | |
| JPMorgan | Ian Hannam |
| Adam Bagshaw | |
| 020 7325 1168 | |
| Morgan Stanley | Scott Bruckner |
| John Porter | |
| 020 7425 8000 | |
| Investec | Chris Godsmark |
| 020 7597 5000 | |
*The illustrative unaudited pro forma net debt as at 31 March 2004 of £311 million referred to above assumes that a number of transactions, including a refinancing and the Global Offer, have occurred. Further details of these transactions and the information required to determine this unaudited pro forma figure are included in the listing particulars to be published today. Such listing particulars will also include detailed information about Virgin Mobile, its historical financial results, its prospects and the risks relating to an investment in the ordinary shares.
The contents of this announcement, which have been prepared by and are the sole responsibility of Virgin Mobile, have been approved solely for the purposes of section 21 (2)(b) of the Financial Services and Markets Act 2000 by J.P. Morgan plc of 125 London Wall, London ECY 5AJ and Morgan Stanley & Co. International Limited of 25 Cabot Square, Canary Wharf, London E14 4QA.
J.P. Morgan plc, J.P. Morgan Securities Ltd., Morgan Stanley & Co. International Limited and Morgan Stanley Securities Limited and their respective affiliates are acting for Virgin Mobile and Bluebottle Investments (UK) Limited and no one else in connection with the Global Offer and will not be responsible to any other person for providing the protections afforded to their respective clients or for providing advice in relation to the Global Offer. No offer or invitation to acquire shares of Virgin Mobile is being made by or in connection with this announcement. Any such offer will be made solely by means of listing particulars published today and any acquisition of shares should be made on the basis of the information contained in such listing particulars. The value of shares can go down as well as up. Past performance is not a guide to future performance. Potential investors should consult a professional adviser as to the suitability of any offering for the individual concerned.
The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended (the Securities Act) and may not be offered or sold in the United States or to or for the account of U.S. persons (as defined in Regulation S under the Securities Act) absent registration or an exemption from registration. Any offering of securities will be made by means of listing particulars that may be obtained from Virgin Mobile that contain detailed information about Virgin Mobile and management, as well as financial statements. No public offering of the shares will be made in the United States.
This announcement does not constitute an offer to sell, exchange or transfer any securities of Virgin Mobile and is not soliciting an offer to purchase, exchange or transfer such securities in any jurisdiction where the offer, sale, exchange or transfer is not permitted or to any person or entity to whom it is unlawful to make that offer, sale, exchange or transfer. This announcement does not contain or constitute an offer of securities for sale in the United States. This announcement and the information contained herein are not for release, publication or distribution in, or into, the United States, Canada, Australia or Japan.
This announcement contains certain statements which are or may be deemed to be forward-looking statements. These forward-looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward-looking statements. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof and are not guarantees of future performance. Virgin Mobile disclaims any obligation to update any forward-looking statements contained herein, except as may be required pursuant to applicable law.
Stabilisation/FSA
Notes to editors:
About Virgin Mobile
Virgin Mobile is a major provider of mobile communications services within the UK, having acquired approximately 4.1m customers as at 31 May 2004. The company launched its operations as a mobile virtual network operator in November 1999. Since its inception, Virgin Mobile has achieved a number of significant milestones. Within a year of its launch it had over 500,000 customers, and by June 2001 over one million customers, making it the fastest growing major UK mobile communications provider to have achieved that milestone to date.
In the twelve months ended 31 March 2004, Virgin Mobile was the fastest-growing mobile communications provider in the UK, with approximately 1.3m net customer additions, representing approximately 26% share of net customer additions in the UK during this period (source: operators’ reported figures). As at 31 March 2004, 95% of its customer base consisted of pre-pay customers.
For the year ended 31 March 2004 Virgin Mobile generated turnover of £453.3m and EBITDA of £78.7m and an operating profit of £63.2m, all on a pro forma basis.
The company’s business model as an MVNO requires relatively low capital investment and generates high cash conversion. Virgin Mobile’s capital investment requirements are modest compared to those of the mobile network operators (MNOs) and generally the company pays for these services on a usage basis, thus freeing it from the significant capital investment required to build and maintain a network and deploy services.
The company had an 80 per cent return on capital employed for the year ended 31 December 2003 and accordingly the company believes it is positioned to achieve one of the highest returns on capital employed within the UK mobile communications services industry.
Virgin Mobile is majority owned by Sir Richard Branson's Virgin Group of companies and uses T-Mobile's network.
In the UK, Virgin Mobile phones are available direct on 0845 6000 600 or on the High Street at approximately 5,000 outlets including Virgin Mobile Specialist Stores, Virgin Megastores, Sainsbury, Tesco, Safeway, Asda, John Lewis, Littlewoods, Argos, The Link, Dixons, Carphone Warehouse, Curry's, Comet, Phones 4U, TOMO, Woolworths, Toys R Us and Rymans.
Virgin Mobile employs approximately 1,400 staff at three sites, Trowbridge, London and Daventry, and has an outsourced customer service centre operated by approximately 200 staff in Middlesbrough. It has been voted one of the top 50 places to work in Britain for two years running in an annual Financial Times survey.
Virgin Mobile’s customers are considered the most satisfied in the pre-pay sector according to the 2004 UK Customer Satisfaction survey by market researchers J.D. Power and Associates.
