Continued Ad Revenue Woe At Granada, But Results Are Top End Of Predictions
As expected, Granada dropped into loss during the first half of this year, mainly due to the continued downturn in ITV advertising volumes .
Pre-tax loss for the six months to 31 March, after exceptionals, digital spend and goodwill, came in at £69 million. This is dramatically down on the £239 million profit the company made last time.
Broadcast advertising revenue dropped by 5.4% across the period to £486 million. Whilst there is undoubtedly a slowdown in advertising, it should be remembered that the fall is against a record first half last year where revenues grew by 10% on 1999.
“The weakness in the advertising market, across most media and most geographies, started in the autumn of 2000 and has continued into the second half of our financial year,” said chief executive Steve Morrison.
Echoing comments from Carlton a few weeks earlier, Granada says it is unable to predict an end to the current advertising downturn. Analysts at ABN Amro are expecting an 18% decline in ad revenue during July, following a 20% fall across the second quarter. By year end the broker predicts a total fall of 10.7%.
Overall revenues at the group remained pretty flat, due the offset of a 10% improvement in content-related revenue.
Charles Allen, executive chairman, said: “While the global advertising market is weak, we are accelerating the pace and scale of change in ITV and Granada. The integration of United [News & Media]’s TV assets, the new ITV partnership, and Granada’s restructuring will simplify our operations and make us more efficient and effective.”
Granada also reiterated its plans to work more closely with Carlton to run the ONdigital terrestrial TV service, soon to be rebranded as ITV Digital, and to develop a stronger online presence through the itv.com domain.
By midday today shares in Granada were down 2žp at 169žp. Carlton’s were down 2p at 372p.
Granada: 020 7620 1620 www.granada.co.uk
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