Granada's preliminary results follow last week's good news that, in the three months to March, ITV closed the gap on the BBC. ITV1 peaktime share rose to 32.5% as its peaktime lead over BBC One was up to 5.2 share points against 3.6 share points across all of 2002.
Shares in Granada were up more than 9% after it announced profits had hit £65m and by 8.50am were up 8.71%, or 5.75p, to 77.55p. Shares in ITV partner Carlton was also up sharply, rising 9.02% to 113.5p.
Granada chairman Charles Allen said the group's interim results showed that the "fightback" at ITV was well under way. He said ITV was benefiting from "better scheduling, more focused marketing and a bigger programme budget".
He praised recent successes, such as 'I'm a Celebrity Get Me Out of Here' and the investigation into the 'Who Wants to Be a Millionaire?' fraud, and said ITV was creating "talked about TV" that captured the nation's imagination.
"Our content strategy is delivering -- resulting in topline growth and increased profitability. We will continue to build our banker shows and create new and returnable series for ITV and the international market," he said.
However, he admitted that net advertising revenue remains difficult to predict against the current uncertain economic outlook. Advertising revenue for June 2003 is set to be down on last year, reflecting the impact of the 2002 World Cup, and ITV1 revenue for the nine months to June 2003 is estimated to be some 1.5% below the same period last year.
"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. Nevertheless, our share of net advertising revenue in the first half from ITV1 and ITV2 combined was up 1% at £442m," Allen said.
Granada reported that earnings before interest, tax, depreciation and amortisation were up 7% to £101m as turnover rose 7% to £734m.
It said annual cost savings of £81m were ahead of target and that Granada was being positioned to benefit from any upturn in the market.
Earnings per share before exceptional items and goodwill amortisation was up 32% at 2.5p and the Granada board said it has decided to pay an interim dividend of 1p a share in October.
Granada said its programming strategy of creating new "returnable series and focusing on international sales opportunities" was delivering. Internationally, Granada reported a good half year, with new production and format sales in the US, Australia and Europe, and increased sales from its programme library.
For the first time, international production and distribution revenue was greater than UK non-ITV production revenue, a trend which it said was set to continue in the second half.
In the US, it produced 'I'm a Celebrity Get Me Out of Here' for ABC; and is producing an entertainment show 'American Princess' for NBC. In addition, both networks have exclusive options over other entertainment ideas which Granada hope to produce.
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