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Granada Shares Dip As Future Of ITV Digital Remains Unclear

Granada Shares Dip As Future Of ITV Digital Remains Unclear

Shares in ITV company Granada fell heavily in trading today after the company failed to offer new details of the restructure of ITV Digital at its AGM this morning (see ITV Revenues Down 12% In H1, Visibility Still Limited). Following the announcement, stock fell by 3.6% to 139p, but had recovered to 142žp by 4.00pm.

The future of ITV Digital remains to a large degree uncertain. Its owners – Granada and Carlton Communications – have agreed that an ‘urgent and fundamental’ restructure is now a necessity; Deloitte & Touche has been appointed to oversee this (see ITV Digital Requires ‘Urgent Fundamental Restructuring’ Say Owners).

However, Granada today offered no further information on the future course of the digital terrestrial business, saying only that “resolving the future of ITV Digital is a top priority.” The group also pointed toward continuing poor advertising conditions at ITV, which will not have helped shares on the markets today.

Tough times ITV Digital had 1.3 million customers at the end of December, but is suffering from high costs and a high churn rate (see ITV Digital Adds 46,000 Customers In Q4 2001). It is finding it hard to compete with the digital satellite service offered by BSkyB, which has already secured almost six million customers.

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