Airtime advertising revenue growth at Granada scraped into positive figures during the first half, with the company today reporting a 1% rise to £442 million.
Despite the weak ad figures, Granada’s turnover and earnings were significantly stronger than expected by Morgan Stanley and Lehman Brothers analysts. Turnover rose by 3% to £734 million and earnings were up 12% at £84 million. Morgan Stanley had forecast £724 million and £67 million respectively.
Pre-tax profits came in at £65 million, up 35% on H1 2002.
In the statement, Granada points to its increasing peak-time viewing share lead over the BBC. ITV1 took a peak-time share of 32.5% during the period. This is a lead of 5.2% points over BBC1; in 2002 ITV1’s lead was only 3.6% points.
Granada chairman Charles Allen says that the ITV fight-back is well underway. “All our energies are on improving our core ITV and content operations,” he said. The content division was strong in H1, delivering revenues up by 7%.
A single ITV
Allen today set out the case for the single ITV that would be created by the proposed merger with Carlton Communications. He said that ITV will be better able to compete effectively in the multi-channel world and claimed there would be benefits for viewers, advertisers and shareholders alike.
The deal is currently being scrutinised by the Competition Commission, which, should it find public interest concerns, has drawn up a number remedies that may allow the merger to proceed. One such remedy is a possible ban on the share deals ITV uses to sell its airtime to advertisers and agencies.
Allen says that Granada is working closely with the Commission to explain the rationale for a single ITV.
Advertising
The war in Iraq, the effect of the Easter holiday falling in the second half of this financial year and continued economic uncertainty, have all had an impact on advertising revenue, according to the group.
Revenues for June will be down on last year due to the boost provided by the World Cup. Total revenues for the nine months to June are expected to decline by 1.5% year on year.
Earlier forecasts from Merrill Lynch predict that ITV as a whole will see its advertising fall by 1.8% in Granada’s financial year to September.
Shares in Granada were up by 5.2% at 75.5p by mid-morning.
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