Granada 'fightback' after 'challenging' period

In a robust statement, Granada Executive Chairman Charles Allen has said that the "ITV fightback starts now" - after the group reported that profits halved in the six-months up to March 31.

Granada figures revealed turnover for the period down £67 million to £713 million, and pre-tax profits before exceptional items for continuing operations (and after a charge of £16 million for continuing digital businesses) dipped by half to £43 million. Net advertising revenue was down 12% in the difficult global media market. However, there was funding made available for a £25 million investment in programming.

Executive Chairman Charles Allen talked of the "challenging" advertising market that had impacted on overall profit margins. However, he reassured shareholders and critics, saying: “We are now putting all our energies into driving our core broadcasting and content business. The ITV fightback starts now.”

Referring to the disastrous ITV Digital joint venture with Carlton, the chairman said Granada was "only too aware of the consequences that this decision has had for many people".

However, Mr Allen defended the decision to call in the administrators, saying that it would have been "irresponsible for Granada to continue to fund ITV Digital without a viable plan that would deliver an eventual return for shareholders".

The company said that ITV1 was "strong" with consistent average prime time share of the audience at over 30%, whilst ITV2 could call upon audiences of up to 2.5 million.

Earnings per share from continuing operations before exceptional items and goodwill amortisation were 1.7 pence. The board revealed that it will pay an interim dividend of 1.0 pence per share on 1 October 2002.

On a possible merger with Carlton, Mr Allen gave a clear indication that the move would be desirable for both companies, shareholders and for audiences.

"We believe that the creation of a single ITV company is a logical step in the development of the UK television sector," he said.

"A combined ITV would benefit our viewers by providing investment for further high-quality network and regional programmes, and our advertisers by delivering the mass audiences that they need to promote their products quickly and effectively. Shareholders would benefit from the cost savings and greater efficiency that would come from a single ITV."

Mr Allen said he welcomed the publication of the Communications Bill – which proposes to permit full ITV consolidation and to lift the bar on international ownership of ITV.

The bill is expected to become law by summer 2003.


Related Northern Ireland Business News Stories
Click here for the latest headlines.

25 March 2002
Is ITV Digital's £50m football offer an own goal?
ITV Digital's board was due to meet on Monday to discuss the possible risk of a £500 million legal action by the Football League if the digital broadcaster pulls the plug on televising Football League matches.
28 November 2001
Granada profits fall due to advertising revenue drop
Granada’s profits have dropped sharply due to a slump in advertising revenues. The company’s profits before taxes during the year to September fell by 27 per cent to £236 million, while losses at ITV Digital soared by 26 per cent to £234 million.
02 February 2004
ITV shares begin trading on London Stock Exchange
ITV plc, the company formed on the merger of Carlton and Granada, has launched its shares on the London Stock Exchange. All dealing in Carlton and Granada shares concluded on Friday's close, while ITV plc shares opened at 141 pence, reaching 146.25p by 4pm.
28 March 2002
Troubled ITV Digital goes into administration
An administration order made by Carlton Communications and Granada in relation to ITV Digital has been granted by the High Court in London. Not only does the judgment throw a shadow of the future ITV Digital, but the future of the government's 'Digital Britain' policy and the financial health of many Nationwide League clubs is also in doubt.
27 May 2002
Unilever sign biggest-ever airtime advertising deal
Carlton Communications and Granada have won the largest-ever airtime television advertising contract with Britain's biggest advertiser Unilever to the tune of £320 million over four-years.