Granada declared that an ITV "fightback is well under way" as the company delivered financial results well ahead of expectations. However, the group, one of the two main ITV businesses, refused to be drawn on the level of regulatory hurdles facing its proposed merger with Carlton, the other major ITV player.
Reporting interim figures, Charles Allen, Granada's chairman, said the ITV network was making progress but "you can only go so far" without a merger that would unify it. Currently Granada, Carlton and the ITV network centre each have their own management and Mr Allen said "ITV's old dysfunctionality" would remain if those managements were not combined.
The deal is before the Competition Commission, which has issued "hypothetical remedies" that indicate sweeping concessions may be required to clear the deal, including the possibility that both groups' sales houses will have to be divested. Some ITV sources have suggested that whatever the competition authorities recommend, there is strong political backing "at the highest level" for the deal.
The Trade and Industry Secretary, Patricia Hewitt, will have the ultimate say on the deal. But Mr Allen said it was "highly unlikely" Ms Hewitt would go against the commission's advice, given that merger decisions are to be depoliticised under new legislation.
For the six months to 31 March, Granada's profits before tax and exceptionals jumped 35 per cent to £85m, while turnover grew 3 per cent to £734m. The cost-cutting programme delivered a better than expected £81m of annualised savings while the results of Granada's production arm was also ahead of forecasts. The shares closed up 9 per cent at 78.5p.
Paul Richards, an analyst at Numis, said: "The results were miles better than anyone was looking for."
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