CABLE operator ntl has passed a milestone in its recovery by moving into operating profit for the first time.

Foundations for the improved performance were laid by a 7.7 per cent rise in customers at its ntl home division in the three months to March 31.

With every division reporting growth, ntl posted operating profits of £2.2m in the first quarter compared with losses of £54.1m a year ago.

The company emerged from bankruptcy protection last year and began a financial overhaul to generate capital and reduce interest repayment charges.

It organised a rights issue to raise £824.3m and reduced its workforce, with 1,500 call centre staff the latest to lose their jobs in cuts announced last month. It is still unclear what impact this will have on 600 call centre workers employed by ntl on Teesside.

The restructuring programme helped the group to cut losses by 63 per cent to £65.4m in the first quarter from £174.7m at the same stage last year.

Chief executive Simon Duffy said the company had made a strong start to the year.

He said: "Both revenue and segment profit margins are on track for continued, steady growth."

Group revenues of £585m in the quarter were lifted by a ten per cent improvement at ntl home, which offers Internet access, telephone services, and digital and cable television.

The division recorded a fifth consecutive quarter of customer gains, with 61,500 more subscribers signing up for services than were lost.

The company said its strategy of bundling products together was paying off as the average revenue per unit rose by £1.26 on a year ago to £41.91.

The churn rate - the proportion of customers leaving the company - remained steady at 1.1 per cent.