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GRANADA’S profits have dropped sharply due to a slump in advertising revenues.
The company’s profits before taxes during the year to September fell by 27 per cent to £236 million, while losses at ITV Digital soared by 26 per cent to £234 million.
Steve Morrison, Chief Executive, said: “In the current global advertising downturn our advertising revenue was down 12 per cent this year. We are focusing on our core business and have taken a number of steps to reduce our costs and further increase our efficiency. Our Content division, which is amongst the largest programme producers in Europe, grew revenue by five per cent, partly offsetting the decline in advertising income, and sales of UK productions outside ITV grew by 17 per cent.”
ITV Digital has cost investors £800 million, and Granada contributed £394 million of this, with broadcasters Carlton providing the remainder. The digital service has attracted approximately one million subscribers, but needs another 700,000 to break even.
Charles Allen, Executive Chairman, said: “The Global Media market has been tough, but we’ve made significant progress in the business. We have integrated Meridian and Anglia into our content and Broadcasting Enterprises divisions and all out ITV licences have been renewed for ten years. ITV Digital and ITV Sport are the key priority. ITV Digital have implemented a plan that will reduces costs and improve performance by £145 million in 2002 and in ITV Sport we are focused on extending carriage. In addition, we are exploring a range of options that will improve shareholder value by reducing the cash burn and improving the break-even point. Looking forward, we welcome this week’s confirmation that the Government will lift the statutory hurdles to full ITV consolidation and believe this offers the prospect of more efficient and effective ITV which will benefit viewers and advertisers.” (CD)
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