Granada profits leap 51% at half-time

Click to follow
The Independent Online
CELEBRATIONS continued at Granada yesterday as the television, rental and catering group added a 51 per cent jump in interim pre-tax profits to its recent successful bid for LWT. The shares closed 10p higher at 501p.

Gerry Robinson, chief executive, said rationalisation plans for the enlarged broadcasting division would be announced within weeks.

He confirmed that Granada would receive pounds 77m from BSkyB when the satellite broadcaster in which it holds a 13.5 per cent stake refinanced a pounds 500m loan. That would help gearing fall to 70 per cent by the year-end, with repayment of all debts scheduled for 1998.

Pre-tax profits of pounds 103m ( pounds 68.1m) were struck from turnover of pounds 941.4m, a 47 per cent increase. Earnings per share rose 41 per cent to 13.8p and the dividend was raised 10 per cent to 3.33p.

All Granada's main divisions improved profits in the six months to April, with television, up 64 per cent at pounds 34.8m, leading the way. There was a pounds 4.9m one- month contribution from LWT.

Operating profits from Granada Television, maker of Coronation Street, rose 40 per cent despite a higher licence payment to the Treasury thanks to a reduction in overheads.

Rental, which like television now provides about a third of profits, was boosted by sales of satellite equipment and mobile phones. Despite a decline overseas, the division produced a 5 per cent increase in operating profits from pounds 50m to pounds 52.4m.

Leisure, up 38 per cent to pounds 11.7m, benefited from the introduction of Burger King to most of its road services. Sharply higher margins at Sutcliffe, the contract caterer bought last year for pounds 360m, led to a first-time contribution of pounds 15.4m.

Computer services chipped in pounds 4.4m, a 10 per cent increase, with Spring Grove, the textile rental operation, contributing a first- time pounds 6.8m.

(Photograph omitted)

Bottom Line, page 34