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.

(GMcG)