Granada Unbowed Despite Fall In Profits
Granada today announced full-year losses of £164 million but the commercial broadcaster was encouraged by results in the second half and remains confident about the future of ITV.
The collapse of ITV Digital took a heavy toll on Granada’s finances and it was forced to write down the value of its digital licences by £250 million. This largely explains the drop-off from last year when the company recorded an overall profit of £46 million. Carlton Communications, Granada’s partner in the doomed pay-TV venture, yesterday announced an overall loss of £156 million for the past year (see Carlton Sees Improving Ad Trading As Loss Hits £156m).
Like Carlton, Granada has been hit by the sharp fall in advertising revenues but it said today that spending had increased by 5% in the second half of the year. This partially offset a 12% decline in the six months to March. Granada has also initiated a cost-saving programme which aims to reduce costs by £65 million a year.
Charles Allen, executive chairman, said: “At the end of the first half I said that the ITV fightback starts now – we’ve had a good first round.”
Granada expects ITV revenues to increase by 2% between October and December but it was reluctant to speculate beyond that, claiming it did not have “any visibility” for revenues in 2003. However, Allen emphasised that the proposed merger with Carlton (see Carlton/Granada Move Closer To £2.6bn Single ITV Company) would clarify matters for all parties.
“We now have a clear vision for the future,” he said. “One ITV company, with one management and one focus to build a stronger ITV for our viewers, advertisers and shareholders.”
Shares in Granada were down 0.25p at 84.75p at 12 noon today.
