Deputy City Editor
Granada is working on plans to launch a satellite TV service following changes to the rules on cross-media ownership. Gerry Robinson, chief executive, said it was possible the company's extensive programme library could form the core of a "Granada Gold" channel.
Mr Robinson was speaking as Granada, the TV to catering and service stations group, announced a 50 per cent jump in pre-tax profits to pounds 154.5m for the six months to April, the top of analysts' expectations. The driving forces were television, where LWT has been successfully integrated, and catering, where Granada has overtaken Compass to become the UK's second- biggest contractor.
Under legislation proposed by the National Heritage Minister, Stephen Dorrell, television companies may move into newspaper ownership, cable and satellite but are restricted to owning no more than two ITV channels. Having bought LWT, Granada is now unable to build on its 14 per cent stake in Yorkshire/ Tyne-Tees, although the company said it did not plan to reduce its stake.
TV profits doubled to pounds 72m thanks largely to the inclusion for the full six months of LWT, which contributed pounds 35m after pounds 5m last time. Underlying profits at both Granada and LWT were up a fifth as programme sales and advertising revenue increased.
Profits from the food side were also buoyant, with margins at Sutcliffe doubling to 8.7 per cent, leading to a 34 per cent rise in profits to pounds 20.6m.
Rental, which two years ago represented half of Granada's operating profits, managed a 3 per cent increase to pounds 59m despite the long-term decline in the TV and video rental market.
Granada's shares closed 2p higher at 604p. The interim dividend rises 16 per cent to 3.85p.
Investment column, page 34