Granada Predicts Slowdown In Ad Revenue, Announces Completion Of United Deal

Shares in Granada Media continued to tumble this morning after the company issued a trading statement predicting a slowdown in ad revenue during 2001. After a significant downgrade from Merrill Lynch sent shares sliding yesterday (see Granada And Carlton Stock Tumbles After Downgrade), stock fell a further 12% after the group said it could not match the high levels of ad revenue growth seen during 2000.

“Our financial year benefited from the Rugby World Cup and the Euro 2000 Championships, both of which drove significant levels of premium advertising. There are no such major events in the coming financial year. As a consequence, we are not expecting to match last year’s revenues from broadcasting in our first half to March,” the statement said.

The group is expecting growth in ad revenue for 2000 to be 8.4%, ahead of ITV as a whole and the highest level for more than 10 years. It said the “unprecedented” growth of the first half has trailed off to a “more normal level” in the second half.

A number of factors would benefit ad revenue during 2001, however, not least the extra income from its new southern franchises – Meridian and Anglia. At an EGM today Granada shareholders approved the acquisition of the television interests of United (see Granada Takes Control Of ITV) and said it will assume ownership on 4 October.

It said the extra commercial minutage during peak time conceded by the ITC last week (see News At Ten To Return To ITV) and the broadcasting rights to Premier League highlights and live Football League games from August (see ITV And ONdigital Secure Football League Rights) would also help push revenues during 2001.

Current share prices in the group are 439˝p, a fall of 63˝p since the start of trading today (see Sharewatch).

Granada Media: 020 7620 1620