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LONDON - Virgin Mobile Holdings PLC reported a 40 percent increase in half-yearly net profit Thursday and painted a rosy picture for future growth despite strong competition in the heavily saturated British cell-phone market. Virgin said its net profit rose to 27.5 million pounds ($47.2 million) in the six months to Sept. 30, compared to 19.6 million pounds in the first half of 2004. Revenue rose 7 percent to 274.6 million pounds ($471.7 million) as it picked up new customers and focused on its new contract mobile services. The strong results were supported by the company''s reaffirmation of a target of mid-teens percentage revenue growth for the year to the end of March 2006, and double-digit percentage service revenue growth in the next financial year. "The past six months have been operationally very productive with the launch and expansion of our contract proposition and establishing a new platform for our next phase of growth," said Chief Executive Tom Alexander. Shares in Virgin, which is majority-owned by entrepreneur Richard Branson, rose 3.7 percent to 306 pence ($5.26) at midday on the London Stock Exchange. Alexander also doused market speculation that Virgin Mobile was a takeover target, saying the company has not received any approaches. But he acknowledged that Virgin''s strong brand and growth momentum could attract attention. "Profitable growth is attractive to other players ... we are a very interesting piece of the jigsaw puzzle going forward," he said. Virgin shares had moved higher over recent weeks after the 18 billion pound ($31.5 million) tie-up of Spain''s Telefonica SA with O2 PLC left it as the most obvious acquisition target. Alexander said he believed there would be consolidation among the mobile networks. Virgin is not a network operator, instead leasing capacity from T-Mobile International AG. The company became the only purely British mobile-phone business on the London Stock Exchange when it listed last year, with Branson''s Virgin Group holding around 73 percent of the 750 million pound ($1.3 billion) company. Virgin entered the contract market during 2005, having previously only sold services on a prepay basis. The company said it will ramp up investment in its retail distribution network and improve its customer service after it added 44,000 net new users in the second quarter — well below the more than 100,000 expected by the market. Chief Financial Officer Alan Gow said he expects the volume of new customers to be "significantly higher" in the second half as the Christmas sales period kicks in. The company had 4.2 million customers at the end of the first half, compared to 3.6 million a year earlier. It is counting on the expansion of its contract offer and new products like the pink-colored Motorola Inc. Razr handset and its Lobster flip phones aimed at the 16- to 30-year-old market to drive further growth. (() | 
