Good News For Granada And Johnston Press

Granada Sees ITV Adspend Up 3-5% In April

ITV advertising revenues at Granada are expected to be flat year on year in the company’s first half, which covers the six months to March. The comparisons are made tougher by the fact that the relatively lucrative Easter weekend fell into the first half in 2002, but will be in the second half this year.

In its AGM statement released this morning, Granada said that revenues in the second quarter were less buoyant than in the first. However, adspend for ITV1 and ITV2 combined is predicted to be up on last year, implying that ITV2 is showing growth where ITV1 is declining.

Granada says that the situation in Iraq is causing some advertisers to defer expenditure into the later part of the year. “Whilst military action in the region could affect our estimates, we currently expect our advertising revenues in April to be approximately 3% to 5% up on last year,” it said.

Granada chairman Charles Allen said that the regulatory process is moving forward on the group’s planned £2.6 billion merger with Carlton Communications. Granada will own 68% of the combined group. As a sweetener to shareholders, Allen added that they will receive a cash payment of 7p per share, or £200 million, under the terms of the deal.

The Competition Commission is expected to complete its report on the merger by 25 June, running concurrently with the passage of the Communications Bill through Parliament.

Allen also indicated that ITV’s increased programming budget is starting to pay dividends. In the quarter to December, ITV1’s primetime adult viewing share in all homes rose to 31.7%, up from 31.1% six months before. In January and February this year that share increased further to 33.1% – 5.5% points ahead of BBC1.

Johnston Press Remains ‘Acquisitive’ As Profits Rise

Regional newspaper publisher, Johnston Press, says that it has made a satisfactory start to 2003, although the outlook remains ‘cloudy’ as a result of wider geo-political events.

The group’s year-end financial results show pre-tax profit up by 32.1% to £97.2 million and operating profit up 44.7% at £129.5 million in 2002. Johnston says that advertising revenues were up by 2.1% on existing businesses and by 1.4% on acquired businesses, although chairman, Roger Parry, describes the ad markets as ‘remaining subdued’.

At a time when all media companies have suffered at the hands of weak advertising and marketing spend, Johnston has emerged stronger than most. Whilst many groups have seen profits and share prices dwindle, Johnston has been fortunate enough to escape these effects.

Reports from Johnston’s conference call this morning quote chief executive, Tim Bowdler, as saying that the group is on the look-out for further acquisitions, following the purchase of Regional Independent Media (RIM) last year. “We do remain acquisitive,” Bowdler is quoted as saying.

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