Granada's €418m profits push share price higher

Granada Media, which yesterday reported profits of £253 million sterling (€418.5 million), may start selling advertising on an all-Ireland basis using TV3 in the Republic and UTV in the North. The British media group said it was considering the move following its purchase of 45 per cent of TV3 earlier this year, later winning the contract to sell advertising for independently-owned UTV.

"We now have the potential to offer all-Ireland advertising and it is something we are looking at," said Ms Susan Donovan, communications director for the group. The £29.3 million sterling TV3 deal, announced in early September, was not completed before the firm's end of September year-end. As a result it is not included in the results published yesterday, which showed full-year operating profit at the lower end of expectations. Better advertising and audience share figures helped support the group's depressed share price, which closed at 377.28p, up 0.26 per cent.

Operating profit rose to £253 million sterling, compared with analyst forecasts of £250-£273 million. This was an 8 percent rise on a pro-forma figure of £235 million for the year to September 30th, 1999.

Turnover rose 9 per cent to £1.087 billion.

The company offered a final dividend of 3.5p per share in its first full-year result as a separate company. Earnings before interest, tax, depreciation and amortisation climbed 11 per cent to £279 million. Advertising turnover for the year to September climbed 8.4 per cent.

After a predicted fall in October, Granada said November advertising revenue was marginally up year-on-year and it had already booked enough for December to give a 7 per cent increase on the whole of December 1999.

But chairman Mr Charles Allen said month-to-month comparisons were not a good guide to underlying ad performance, as they were skewed by large events - such as the Rugby World Cup in 1999, which made this October's figures look under par.

"The key thing to look at is the 12-month deals from January to December and in the last three years, if you take ITV for example, then that's been about 5 per cent [growth]," he said.

Granada, which made eight of the top 10 programmes on ITV in the financial year, said ITV ad revenues as a whole for calendar 2000 would rise by 4.6 per cent. TV3 will have the rights to screen many of these programmes, including Coronation Street, from next year.

The company, floated at 515p in July, is 80-per cent owned by its hotel and leisure sister company, Granada Compass. Granada Group, which was chaired by Donegal-born Mr Gerry Robinson, split earlier this year to form the two companies.

Granada Media has been hit by concerns about the ad revenues, and its stock has underperformed the British media sector by nearly 19 per cent since joining the market.