Dot.com mania has provided a fillip to the earnings performance of Granada, the media and hotels group, with the internet driving an overall growth of 12% in advertising revenues for the three months to March 31.
In a trading statement the company said that advertising revenues had risen from a 9% increase in the December quarter to more than 12% in the March period.
Granada is predicting that the trend will continue upwards and expects a jump of 17% in ITV advertising revenues in April.
The group said advertising revenues from internet and technology companies increased from £5m during the December quarter to over £8m by the end of March.
Industry expectations are that total dot.com spending on advertising will exceed some £200m this year.
Granada's media division reported a 10% rise in sales for the six months to March, with its operations benefiting from higher programme sales and better subscriber numbers from its 50%-owned pay television service, ONdigital.
Charles Allen, Granada's chief executive, said: "We have had a very good first half-year performance, with excellent results from our media division and strong progress in hospitality. With good second-half prospects in both this leaves us in very good shape for the year as a whole."
Analysts are forecasting Granada to report a pre-tax profit of £869m in 2000. The company's shares yesterday fell 12p to 620p.
Mr Allen said programme sales had increased 13% in the half-year to March and predicted this growth would be more than 20% over the next six months.
Strong sales have been from programmes such as Lost for Words, The Royle Family and Longitude. Granada also produces the longest running TV soap, Coronation Street.
ONdigital, which Granada's jointly owns with Carlton Communications, revealed that its subscriber numbers rose to 552,000 in December, 18 months since it began operating. Subscriber numbers are expected to reach 1m by the year's end and Granada said that its share of the investment from ONdigital in the first half was £82m.
Analysts have estimated that if ONdigital were spun off in a public offering Granada's 50% shareholding would be worth about £1bn.
There is also the question of the value of Granada's stake in internet search engine AskJeeves UK, which would deliver the company significant value if it were ever sold via a flotation.
The cloud that hangs over Granada's share price, however, is the uncertainty over whether the government will allow it to bid for Carlton Communications or United News & Media. The latter have proposed a merger to consolidate ITV ownership in the UK.
Granada said revenues per available room for its Meridien hotel chain grew by 8%, with total sales up by 9%. The rise was underpinned by the expansion of the Meridien brand, with another 12 hotels opened in the past six months, taking the chain total to 121.
