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ITV PLC (ITV)

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Wednesday 03 March, 2004

ITV PLC

Final Results

ITV PLC
03 March 2004

3 March 2004


                      ITV results for the 15 months ended
                               31 December 2003

ITV Broadcasting
•         ITV1 - best year on year commercial impact volume performance for 10
          years in 2003.
•         ITV2 - net advertising revenue up 122% & volume of adult commercial
          impacts up 59% in 2003.
•         Advertising contracts renewed for 2004 on Contracts Rights Renewal
          terms.

Granada - production
•         10 out of top 20 UK TV shows in 2003 made by Granada
•         Britain's favourite shows performing strongly - Coronation St,
          Emmerdale, Heartbeat, Trisha
•         New drama attracting big audiences - The Royal(33% share), Booze
          Cruise(44% share), Henry VIII (34% share), Life Begins(38% share), 
          Suspicion(36% share)

Financial
                                      Granada                                    Carlton
                      15 months ended 31      Year ended 30      15 months ended 31      Year ended 30
                      December 2003 - £m   September 2002 - £m   December 2003 - £m   September 2002 - £m
Group turnover#              1,752                1,408                 1,191                 965
Profit before tax*            223                  163                   96                    54

•         Pro forma EBITA* for 12 months to 31 December 2003 of £222m
          (unaudited)
•         A dividend of 0.5 pence per ITV plc ordinary share will be paid for
          the three months to 31 December 2003.  The dividend will be paid on 
          1 July 2004 to shareholders on the register on 23 April 2004.  This is 
          consistent with the dividend payments of both Carlton and Granada for 
          the previous 12 months.

ITV in 2004

•         £100m savings target on track.
•         Integration progressing well - top 150 managers appointed.
•         ITV Multichannel net advertising revenue up 1% in Quarter to March
          2004.
•         'Talked about' television success in UK and Germany - I'm a Celebrity
          Get Me Out of Here -  ITV1 final averaged 66% share for 16-34s, RTL 
          final averaged 54% share for 14-49s.
•         ITV News 10.30pm evening News relaunched with state of the art virtual
          set
•         National and regional news programming integrated

The results shown in table are for continuing operations:    #  Includes
programme sales to ITV but excludes share of joint ventures turnover       *
stated before amortisation and exceptional items

Commenting, Charles Allen, Chief Executive of ITV said:

'ITV has come an enormously long way in the last 15 months and the pace of
change has been incredible. We have put ITV in a stronger position and have
created a united and more efficient company.

We are now focused more than ever on delivering what viewers, advertisers and
shareholders want from ITV and we are seeing the results coming through.  ITV is
unlocking the benefits of being one company with one management team all working
towards shared goals.'

For further enquiries please contact:

ITV plc                                                         T: 020 7620 1620

Charles Allen                     Chief Executive
Henry Staunton                    Finance Director
James Tibbitts                    Company Secretary
Susan Donovan                     Director of Communications

Citigate Dewe Rogerson                                          T: 020 7638 9571

Jonathan Clare
Simon Rigby
Alex Brown

Website                                                            www.itv.co.uk

These figures reflect the change in year-end from 30 September to 31 December.
There will not be a formal presentation for analysts or conference call on 3
March 2004 as figures for the majority of the period covered have already been
published.

Chief Executive's review

15 months to 31 December 2003

Overview

ITV plc began trading on 2 February 2004. This followed clearance for the merger
of Granada plc and Carlton Communications Plc by the Secretary of State at the
Department of Trade & Industry once there was agreement of undertakings with the
Office of Fair Trading. Shareholders approved the merger on 13 January 2004.

It has been ten years and taken 11 transactions to realise the strategic aim of
creating a single company for ITV.

One ITV will create value for shareholders by saving costs, reducing duplication
and improving the performance of our business. For the first time in 48 years we
have a unified company and a single management team with a common focus
determined to drive the commercial and creative success of ITV.

The principal undertakings that we gave to the Office of Fair Trading as a
condition of the merger allow advertisers and agencies to roll-over their
existing advertising contracts for ITV1. This mechanism, Contract Rights Renewal
('CRR'), includes a variation of their share of ITV1 broadcast commitments in
line with ITV1's share of commercial audiences. This is a positive outcome for
all. ITV airtime will be sold by one sales team which will improve efficiency
and lower costs. Part of that saving can then be used to invest in on-screen
product for the benefit of viewers and advertisers. Under CRR ITV will have even
more incentive to maximise its share of commercial impacts and this means
investing in 'talked about television' that attracts many millions of viewers.

Since December 2003 we have been allowed to trade as one sales team and we have
just completed our first round of annual negotiations with the CRR option in
place. The season of negotiation, although slightly later than usual, has seen
the majority of renewing customers electing to use CRR. 2003 saw ITV1's viewing
and impact performance stabilise. This was an excellent result against the
backdrop of continued channel fragmentation and increasing multi-channel
penetration, and was one of the reasons clients chose to roll-over their
contracts.

The new Communications Act was passed on schedule in July 2003. The Act removed
the legislative obstacles to creating one ITV and lifted the restrictions on ITV
owning its own news provider.

2003 was our last year with the ITC as our principal regulator, whose officers
and members I would like to thank for their support over the years. Ofcom came
into being on 29 December 2003 and we are already working with Lord Currie,
Stephen Carter and their team at Ofcom.

The ITV Board-in-waiting is now the Board of ITV plc following the completion of
the merger. The Board had already made progress for ITV plc ahead of the
completion of the merger and is now addressing future strategic opportunities
while the integration proceeds. Finally, we were delighted to announce a new
non-executive Chairman for ITV, Sir Peter Burt, on 24 February 2004. The
appointment will become effective from 15 March 2004.

Since the merger was announced on 16 October 2002, both Carlton and Granada have
been working on a £100 million profit improvement plan. We achieved £34 million
of costs savings through pre-merger integration in the 12 months to 30 September
2003 with an annualised rate of cost saving at the end of that period of £43
million. We will aim to deliver most of the full £100 million by the end of
2005. Reduced sports costs in the ITV1 schedule later in 2004 and 2005 will give
us further savings.

Business Review

Whilst the merger process has advanced, we have continued to drive the
businesses forward. Total pro forma turnover, excluding joint ventures and
inter-company sales, was £2,078 million in the calendar year to 31 December
2003. Pro forma operating profit on continuing activities before interest, tax,
exceptional items and goodwill was £222 million. This report includes pro forma
profit and loss account information for ITV for the 12 months to 31 December
2003.

There are also separate accounts and financial reviews for each of Granada and
Carlton covering the 15 months to 31 December 2003 and showing comparative
information for the 12 months to 30 September 2002. Financial highlights are
included in the financial review sections of this report.

We will pay a dividend for the three months to 31 December 2003. This will be
paid at the rate of 0.5 pence per ordinary share on 1 July 2004 to shareholders
on the register on 23 April 2004. The ex-dividend date will be 21 April 2004.
That rate for the three month period is the time weighted equivalent of the rate
paid by Granada for the 12 months to 30 September 2003. Carlton had harmonised
its rate of dividend payment for the 12 months to 30 September 2003 to that of
Granada. Dividends are not paid on the Company's convertible shares.

ITV Broadcasting's performance

Advertising

ITV plc's net advertising revenue was down 2% in the 2003 calendar year. This
was due in part to a reduced share of total TV advertising. That reduced share
reflected ITV1's lower share of commercial viewing in 2002 after multi-channel
penetration had risen sharply in previous years. In 2003 food & drink and motors
were weak sectors whilst telecommunications and entertainment were strong with
the launch of new products and increasing competitive pressure within those
sectors. Improved impact volume performance means ITV is now better value for
its clients with the cost per thousand impacts falling in real terms to below
1996 levels.

Channel performance

ITV1

In the year to 31 December 2003 we focused on improving viewing performance in
peaktime. This is because peaktime (7:00 pm to 10:30 pm) attracts the highest
volume of viewers and is where most of our revenue is concentrated. In the year
to 31 December 2003 UK multi-channel homes have increased by just over 13%.
Despite this increase, ITV1's share of overall commercial adult impacts reduced
by less than 1 percentage point and ITV1's peaktime viewing share remained
stable year on year in all homes. In 2003 ITV1 had its best improvement in
impact volume performance for ten years. Managing our performance across all
platforms is vital as we move to digital television. In the year to 31 December
2003 ITV1's peaktime audience share increased in Digital Cable, Digital
Terrestrial, Analogue Cable and Analogue Terrestrial homes, and was unchanged in
Digital Satellite homes.

Our next area of focus for ITV1 is improving the daytime schedule performance.
We have already strengthened the morning and early afternoon performance with
Trisha, This Morning and Des and Mel. We have allocated more resources to
daytime to regain audience share in the mid to late afternoon and are making
childrens TV a priority.

ITV multi-channel

ITV multi-channel (ITV1, ITV2 and ITV News) peaktime individual multi-channel
home viewing is up 1% at 28.8%. ITV2's performance has gone from strength to
strength: we have achieved total adult impact increases of 59% in the calendar
year to 31 December 2003 and it is now firmly in the top five digital channels.
ITV2 has been the key driver of multi-channel impact growth. ITV2 accounted for
16% of the growth of multi-channel adult impacts and 18% of the growth of 16-34s
impacts on multi-channel in the year to 31 December 2003. ITV2 advertising
revenue was up 122% in the year to 31 December 2003.

ITV3 will be launched this year using the extensive ITV, Carlton and Granada
programme libraries. It will be targeted at a more upmarket and mature audience
using ITV favourite dramas and classic movies.

News

Our flagship evening news bulletin on ITV1 was relaunched on 2 February 2004 in
a new regular 10:30 pm slot. We have invested in a virtual set which provides
greater production flexibility and creates a high quality visual effect
on-screen.

Our 24 hour News Channel also makes use of the new virtual set and we have
introduced new presenters; Angela Rippon and Alastair Stewart join the channel
with regular shows.

In regional news we have updated the on-screen look of our bulletins to match
the new ITV national news image. We are also investing in digital news
production and transmission technology, creating digital news centres and
focusing our regional news investment on technology and journalism. It will also
equip those departments to make regional non-news programmes.

Carlton Screen Advertising ('CSA')

The UK has nudged ahead of Germany as the territory with the highest cinema
advertising revenue in Europe. CSA are pioneering digital transmission for
advertising and will have 250 screens digitised by summer 2004 (140 screens are
complete at present) thereby reducing costs.

Screenvision Europe, a 50% joint venture, has been owned for 18 months and is
now well placed to exploit key markets in France, Belgium and Spain. The US
remains one of the least developed markets for cinema advertising. In 2003
Screenvision US, a 50% joint venture, grew its revenue per screen significantly
and continues to service almost half the 28,000 screens taking advertising.

Granada

Out of the top ten programmes shown in the UK in 2003 nine were shown on ITV and
eight of those nine were produced by Granada (the production division of ITV
plc). Our banker shows were also on top form in 2003. Coronation Street is
regularly beating Eastenders and has averaged 55% share versus last year's 53%.
The fifth weekly episode of Coronation Street and Emmerdale's sixth weekly
episode are working well. The daytime bankers Trisha, This Morning and Des and
Mel also improved their share and volume performance.

The Royal was the UK's best performing new drama series debuting with 12 million
viewers. A Touch of Frost returned with 12.2 million viewers and 49% share and
has repeated this performance in 2004. Prime Suspect achieved a 43% share for
the return of Jane Tennison, while William & Mary, a new drama series, achieved
a 34% share and has been recommissioned. One-off drama has also rated well: The
Booze Cruise achieved 44% share, Suspicion achieved 36% share and Blue Murder
37%. Henry VIII with Ray Winstone and Helena Bonham Carter achieved an average
viewing share of over 34%.

Granada achieved some notable factual and entertainment successes last year,
with Tonight specials achieving over 15 million viewers and I'm a Celebrity...
Get Me Out of Here! (the second series) achieving 39% of all individuals and 44%
share of 16-34 year olds.

Not only has this been a success for ITV, but we have sold the format of I'm a
Celebrity...Get Me Out of Here! to ABC and to RTL. The German production of I'm
a Celebrity...Get Me Out of Here! delivered a peak rating of 43% share and 8.3
million people, compared to the channel average of 14% for the previous month,
which was an enormous success for RTL. Other Granada international successes
include sales of Airline to A&E in the US, Saturday Night Takeaway to Fox, and
American Princess to NBC network. Carlton International has also had a good
2003, producing 18 television films. The most noticeable was the Rudy Giuliani
Story, produced for USA networks and nominated for three Emmy awards. Our
distribution businesses also had a strong year. Notable successes include the
worldwide sales of the Tonight special . . . Living with Michael Jackson and
sales of our dramas Henry VIII, Forsyte Saga and Prime Suspect. There were other
output deals with French broadcasters. Thunderbirds was selected by NHK
education channel to teach children English in Japan.

Outlook

The advertising outlook appears to be more stable. We still have limited
visibility but we have seen some more positive signs in the market. In the
quarter to 31 March 2004 we expect our ITV1 advertising revenue to be slightly
up on last year. For ITV1 and ITV2 advertising combined, we expect that quarter
to be up approximately £4 million. This is a pleasing result in a busy first
quarter as we work with our customers to implement the new CRR mechanism while
managing the integration of the sales teams. All our external sales people are
now in place. With most advertisers adopting CRR for this year's renewals we
would expect our ITV1 advertising revenue for 2004 to be closer to the overall
market growth. ITV2 is still growing strongly helped by strong audience
performances.

Our current schedule performance for 2004 is very encouraging - the outstanding
performance of I'm a Celebrity...Get Me Out of Here! (series 3) has helped ITV
to start 2004 in a strong position. ITV1 peak time viewing share in all homes is
up year to date (to 22 February 2004) from 32.7% to 33.8%. ITV2 has also seen
some great performances from American Idol and extension shows from Celebrity
capturing audiences of over one million.

We will be progressing with our target of £100 million of cost savings as the
integration process continues. The top management of the business has been
selected and is in place in all divisions. The integration of the two businesses
and systems is proceeding. The merger is allowing us to remove past
dysfunctionalities, streamline the business and create more value for
shareholders.

I would like to thank all those who work within ITV plc: for continuing the
excellent ratings performance of our channels, for producing top rating
programmes, for contributing to the successful completion of the merger and for
working so hard throughout the last year and now, on the successful integration
of two great businesses. It has been a demanding year but one in which we have
been able to put ITV in a stronger commercial position and create a unified and
more efficient company.



Charles Allen
Chief Executive


ITV pro forma trading financial information for 12 months to 31 December 2003
(unaudited)

The merger of Granada and Carlton to form ITV plc was completed on 2 February
2004. Pro forma results have been prepared to show the results of the new group
for the year ended 31 December 2003 as if the merger had taken place on 31
December 2002.

Basis of preparation of pro forma trading results (unaudited)

The pro forma trading results for the year ended 31 December 2003 have been
prepared on the following basis:

1. They incorporate the results of Granada and Carlton from 1 January 2003. They
also consolidate the results of new subsidiaries London News Network, ITV News
Channel, ITV2 and ITFC which were previously treated as JVs or associates, as
well as the ITV Network Centre.

2. The results have been presented under the accounting policies that have been
adopted by ITV plc which are substantially the same as those of Granada plc. The
principal difference at operating EBITA level for Carlton was to write off
individual films and titles over a period not exceeding 20 years rather than a
period not exceeding five years which is the policy of Granada.

3. Transactions between Granada, Carlton, the ITV Network Centre and subsidiary
companies previously reported as joint ventures or associates (listed in note 1)
have been eliminated as inter-company transactions.

4. The results are shown only for continuing operations before exceptional
items.

5. The results should be viewed as best estimates only at this stage. Given the
short time since the completion of the merger on 2 February 2004 detailed pro
forma work is still ongoing and fair value adjustments have not yet been
finalised. Adjustments may be made to the pro forma results in future
announcements.

Pro forma trading results (unaudited)
£m                                     Granada   Carlton       Less       Consolidate   Eliminate     ITV plc
                                       15 months 15 months     3 months   new           intercompany  pro forma
                                       to        to            to         subsidiaries  trading
                                       December  December      December   (note 1)      (note 3)
                                       2003      2003          2002

Turnover                               1,752     1,191         (598)      996           (1,263)       2,078
Operating profit                       161       71
Add back depreciation                  38        26
Add back amortisation                  46        20
GAAP adjustment                        -         -
Profit in stock adjustment             (2)       (3)
EBITDA                                 243       114           (85)       4             -             276
Depreciation                           (38)      (26)          13         (3)           -             (54)
EBITA                                  205       88            (72)       1             -             222
JVs and associates excluding           5         14            (4)        (1)           -             14
amortisation
Investment income                      5         3             -          -             -             8



Turnover

Total turnover was £2,078 million comprising Broadcasting sales of £1,719
million and Production sales of £359 million.

Broadcasting sales

Net Advertising Revenue (NAR) was £1,517 million comprising ITV1 NAR of £1,484
million, ITV2 NAR of £31 million and £2 million from the ITV News Channel. ITV
plc's net advertising revenue was down 2% in the 2003 calender year. Carlton
Screen Advertising sales were £63 million. Sponsorship income from ITV1 and ITV2
was £36 million. Other broadcasting sales of £103 million include fees for
airtime sales on behalf of third parties, online advertising, ITV2's digital
satellite subscription income and sales of ITV programming by the ITV Network
Centre to Channel 3 licences not owned by ITV plc.

Production sales

Total production turnover of £359 million excludes £353 million of sales made by
Granada and Carlton to ITV, which were previously reported as external turnover.
Other UK production sales excluding ITV1 were £98 million. International
distribution sales including the US based factual business were £105 million
with sales from the German and Australian based production businesses of £8
million. Total facilities turnover was £78 million including Carlton 021, the
Moving Picture Company (MPC) and Superhire. Education sales were £36 million and
other production sales comprising video, publishing and merchandising was £34
million.

Profit

Operating EBITA for the year was £222 million. Prior to the merger Granada and
Carlton recognised turnover and profit on programme sales to the ITV Network
Centre when the programme was delivered. The pro forma requires an adjustment to
be made to strip out this profit at period ends as the production business
within ITV plc will only recognise this profit once the programme has been
transmitted. This has resulted in a £5 million reduction in 2003 pro forma
profit.

The ITV1 Network Programme costs were £786 million comprising commissions of
£529 million, Sport of £152 million, acquired programming of £58 million and
News and other costs of £47 million. This reflects a 7% increase in schedule
investment year on year (before stock write downs) reflecting ITV's commitment
to top quality programming that will attract high levels of commercial impacts.
Total licence fees were £217 million calculated net of the effects of digital
penetration, which has been estimated at an average of 43% in the year reducing
licence costs by £114 million.

The impact of aligning accounting policies was zero in 2003.

JVs and associates include GMTV, ITN, TV3, GSB and the Screenvision businesses
in Europe and the US. Investment income is principally from ITV's holding in
Channel 7, SMG and Thomson.

Financial review - Granada

Set out below is a financial review of Granada's results for the 15 months to 31
December 2003. Comparatives for 2002 are for the 12 month period to 30 September
2002.

Turnover

In the 15 months to 31 December 2003 turnover on continuing operations less
joint ventures was £1,752 million (2002: £1,408 million). This comprised £1,134
million (2002: £899 million) of revenue from Broadcasting and Enterprises, £613
million from Content (2002: £505 million) and £5 million (2002: £4 million) from
other businesses.

Broadcast revenue

ITV1 Net Advertising Revenue ('NAR') was £1,081 million (2002: £862 million).

Our strategy of focusing on commercial impacts has delivered and in 2003 ITV1
had its best year-on-year performance in impact volume for ten years. This
improved performance means ITV1 is now better value for its clients with cost
per thousand falling 9% in the calendar year 2003. Improved value along with the
reduction in uncertainty following the completion of the merger between Granada
and Carlton means that ITV1 will be well positioned to benefit from any
improvement in the advertising market in 2004.

Sponsorship income was £26 million (2002: £19 million) with other income,
comprising fees for airtime and online advertising for third parties, income
from commercial licensing and from merchandising of £27 million (2002: £18
million).

Content revenue

Overall sales were £613 million (2002: £505 million) comprising sales to UK
broadcasters, including ITV, of £428 million (2002: £351 million), sales from
our International Production and Distribution businesses of £89 million (2002:
£63 million) and sales from our Education and Facilities operations of £96
million (2002: £91 million).

On a like-for-like basis sales in the calendar year 2003 were up 3%. This
increase reflects an increased spend on original programming from key
broadcasters, notably ITV1, and a strong performance from our International
businesses including the overseas sale of the Tonight special on Michael Jackson
and I'm a Celebrity . . . Get Me Out of Here! to ABC in the US.

Profit

Profit from our continuing operations before tax and charges for goodwill and
exceptional items was £223 million (2002: £163 million). Operating EBITA on
continuing operations before exceptional items was £207 million (2002: £164
million). Payments to the Government for the Group's wholly owned broadcasting
licences continue to be a significant element of costs. In the period these
payments totalled £164 million (2002: £151 million).

This is calculated net of the effects of digital penetration, which has been
estimated at an average of 41% (2002: 30%) in the period, reducing licence costs
by £84 million (2002: £49 million).

Together with the tax charge of £58 million on our continuing businesses, this
additional licence fee of £164 million produces a combined tax and licence fee
rate of 60% on our profit before tax, licence fees, goodwill amortisation and
non-operating exceptionals.

Continuing associates produced a profit of £5 million (2002: £3 million loss).
This is principally from our investments in GMTV, ITN, TV3 and ITV2, all of
which traded profitably in the quarter to 31 December 2003.

Investment income of £5 million (2002: £5 million) is principally from SMG and
Channel 7 in Australia. Net interest receivable was £3 million (2002: £3 million
payable).

Profit before tax, but after exceptional items and discontinued operations, was
£39 million (2002: £378 million loss).

Goodwill and exceptional items

The goodwill amortisation in our core operations was £46 million (2002: £37
million) of which £38 million related to our acquired analogue operations.
Exceptional items on continuing operations were £125 million (2002: £268
million) being a £109 million non-cash charge against the value of SMG and other
media interests and £16 million for reorganisation costs associated with our
cost saving programmes. Merger costs will be treated as part of the
consideration for Carlton for acquisition accounting purposes.

Discontinued operations

This represents our share of the results of the Boxclever TV rental joint
venture, other online joint ventures and Granada Business Technology which was
sold during the year. 2002 also included the results of ITV Digital and ITV
Sport.

Taxation, earnings and dividends

The effective rate of tax on our continuing operations reflects non-deductible
goodwill amortisation. The tax credit on discontinued operations arises as a
result of writing off long term loan notes due from Boxclever. Earnings per
ordinary share on continuing operations before exceptional items of £125 million
and goodwill charge of £46 million were 6.0 pence (2002: 4.1 pence). Basic
earnings per share were 0.1 pence (2002: 13.8 pence loss per share). The
dividend for the 15 month period is £81 million (2002: £56 million). This
comprises £56 million paid to shareholders prior to the merger with Carlton and
£25 million paid to ITV plc after the merger. ITV plc will in turn pay its
shareholders a dividend of 0.5 pence per share for the three months to 31
December 2003.

Cash flow

In the 15 month period net funds have increased by £86 million (2002: increase
of £27 million). The cash flow from operating activities before exceptional
items was £240 million after adding back goodwill amortisation and depreciation
of £46 million and £41 million respectively. Exceptional items were £48 million
representing ITV Digital and ITV Sport closure costs and restructuring costs
associated with our cost saving programmes. Payments in respect of taxation were
£13 million with a cash inflow from interest and investment income of £9
million. Capital expenditure was £19 million and £8 million was realised from
the sale of land and buildings. The purchase of investments of £13 million
represented the funding costs for ITV2 and the purchase of Granada shares to
satisfy share award obligations. The disposal of Granada Business Technology and
other movements resulted in a net £6 million inflow. After dividends of £84
million, net cash inflow was £86 million resulting in a closing net funds
position of £127 million (2002: £41 million).

Henry Staunton
Finance Director


Consolidated profit and loss account - Granada
                                                    15 months ended 31 December     12 months ended 30 September
                                                    2003                            2002
                                              Note  Continuing Discontinued Total   Continuing Discontinued Total
                                                    operations operations   £m      operations operations   £m
                                                    £m         £m                   Restated   Restated
                                                                                    £m         £m
Turnover:
Group and share of joint ventures' turnover         1,752      176          1,928   1,409      291          1,700
Less share of joint ventures' turnover              -          (169)        (169)   (1)        (272)        (273)
Group turnover                                      1,752      7            1,759   1,408      19           1,427
Total operating costs                               (1,607)    (7)          (1,614) (1,549)    (17)         (1,566)
Operating profit - before exceptional items         161        -            161     127        2            129
Operating loss - exceptional items            1     (16)       -            (16)    (268)      -            (268)
Group operating profit/(loss)                       145        -            145     (141)      2            (139)
Share of operating profit/(loss) in:
   Joint ventures before exceptional items          -          47           47      -          (52)         (52)
and goodwill amortisation
   Joint ventures - exceptional items         1     -          (10)         (10)    -          (16)         (16)
   Joint ventures - goodwill amortisation           -          (18)         (18)    -          (19)         (19)
   Joint ventures                                   -          19           19      -          (87)         (87)
   Associated undertakings                          5          -            5       (3)        (11)         (14)
Investment income                                   5          -            5       5          -            5
Profit on sale of fixed assets                      3          -            3       -          -            -
Gain on cessation of Boxclever - exceptional  1     -          9            9       -          -            -
items
Amounts provided in respect of fixed asset    1     (109)      (10)         (119)   -          -            -
investments - exceptional items
Loss on cessation of joint venture operations 1     -          -            -       -          (104)        (104)
-exceptional items
Profit/(loss) before interest and tax               49         18           67      (139)      (200)        (339)
Net interest receivable/(payable) and similar
income/(charges):
Group and associated undertakings                   3          4            7       (3)        4            1
Joint ventures                                      -          (35)         (35)    -          (40)         (40)
Net interest                                        3          (31)         (28)    (3)        (36)         (39)
Profit/(loss) on ordinary activities before         52         (13)         39      (142)      (236)        (378)
taxation
Tax on profit/(loss) on ordinary activities   5     (58)       21           (37)    (49)       49           -
(Loss)/profit for the financial period              (6)        8            2       (191)      (187)        (378)
Dividends                                     4                             (81)                            (56)
Amount transferred from reserves                                            (79)                            (434)

(Loss)/earnings per share (basic)             3     (0.2)p     0.3p         0.1p    (7.0)p     (6.8)p       (13.8)p
(Loss)/earnings per share (diluted)           3     (0.2)p     0.3p         0.1p    (7.0)p     (6.8)p       (13.8)p
Adjusted earnings per share:
before exceptional items (basic)              3     4.3p                            2.8p
   before exceptional items and goodwill      3     6.0p                            4.1p
amortisation
   (basic)

Discontinued operations in 2003 include Boxclever and Granada Business
Technology Ltd. 2002 also includes the results of ITV Digital, ITV Sport, Ask
Jeeves, Shop! and Wellbeing.


Consolidated balance sheet - Granada


                                                                    31 December 2003     30 September 2002
                                                              Note         £m         £m        £m        £m
Fixed assets:
Intangible assets - goodwill                                      6                1,259               1,305
Tangible assets                                                   7                  193                 232
Investments:
   Interest in net assets of joint ventures:
   Share of gross assets                                                    24                  31
   Share of gross liabilities                                             (24)                (22)
   Share of net assets                                                       -                   9
   Loans to joint ventures                                                   -                   5
                                                                  8          -                  14
   Associated undertakings                                        8         33                  30
   Other investments                                              8        188                 263
Investments                                                       8                  221                 307
                                                                                   1,673               1,844
Current assets:
Stocks                                                                     276                 248
Debtors: amounts falling due within one year                               206                 264
Debtors: amounts falling due after more than one year                        9                  24
Debtors                                                                    215                 288
Cash at bank and in hand and short term deposits                           185                 106
                                                                           676                 642
Creditors: amounts falling due within one year:
Borrowings                                                                 (4)                (52)
Other creditors                                                          (513)               (535)
                                                                         (517)               (587)
Net current assets                                                                   159                  55
Total assets less current liabilities                                              1,832               1,899
Creditors: amounts falling due after more than one year:
Borrowings                                                                (54)                (13)
Other creditors                                                           (45)                (30)
                                                                                    (99)                (43)
Interest in net liabilities of joint venture:
   Share of gross assets                                                     -                 369
   Share of gross liabilities                                                -               (606)
   Share of net liabilities                                                  -               (237)
   Loans to joint venture                                                    -                  69
                                                                  8                    -               (168)
Provisions for liabilities and charges                                              (47)                (46)
Net assets                                                                         1,686               1,642

Capital and reserves:

Called up share capital                                           9                  277                 277

Share premium account                                             9                  112                 112

Revaluation reserve                                               9                   39                  40
Other reserve                                                     9                1,079               1,079
Profit and loss account                                           9                  178                 133
                                                                                   1,685               1,641
Shareholders' funds:
Equity                                                                             1,685               1,641
                                                                  9                1,685               1,641
Minority interests:
Equity                                                                                 1                   1
                                                                                   1,686               1,642


Summary consolidated cash flow statement - Granada

                                                                              15 months ended 12 months ended
                                                                              31 December     30 September 2002
                                                                              2003
                                                                        Note  £m       £m       £m      £m
Net cash inflow from operating activities                               2              192              192
Net cash inflow from returns on investments and servicing of finance                   9                6
Taxation                                                                               (13)             25
Free cash flow                                                                         188              223
Capital expenditure and financial investment:
Purchase of tangible fixed assets                                             (19)              (25)
Purchase of investments                                                       (13)              (108)
Overseas equity currency impact                                               (11)              -
Sale of tangible fixed assets                                                 8                 -
Sale of investments                                                           5                 6
Net cash outflow from capital expenditure and financial investment                     (30)             (127)
Net cash inflow/(outflow) from acquisitions and disposals                              12               (13)
Net cash inflow before dividends, liquid resources and financing                       170              83
Equity dividends paid                                                                  (84)             (56)
Net cash inflow before liquid resources and financing                                  86               27
Management of liquid resources - (increase)/decrease                                   (29)             1
Cash inflow before financing                                                           57               28
Financing:
Bank and other loans repaid                                                   (33)              (25)
Capital element of finance lease repayments                                   (9)               -
Cash inflow on sale and leaseback transactions                                44                -
Net cash inflow/(outflow) from financing                                               2                (25)
Increase in cash in the period                                                         59               3




Reconciliation of net cash flow to movement in net funds - Granada


                                                                           15 months ended  12 months ended
                                                                           31 December 2003 30 September 2002
                                                                           £m               £m
Increase in cash in the year                                               59               3
Increase/(reduction) in liquid resources                                   29               (1)
Cash outflow from decrease in debt financing                               33               25
Capital element of finance lease repayments                                9                -
Cash inflow on sale and leaseback transactions                             (44)             -
Movement in net funds in the year                                          86               27
Opening net funds                                                          41               14
Closing net funds                                                          127              41


Consolidated statement of total recognised gains and losses - Granada

                                                                           15 months ended  12 months ended
                                                                           31 December 2003 30 September 2002
                                                                           £m               £m
Profit/(loss) for the financial period:
Group                                                                      15               (248)
Joint Ventures                                                             (16)             (111)
Associates                                                                 3                (19)
                                                                           2                (378)
Currency translation differences                                           (1)              (1)
Total recognised gains and losses relating to the period                   1                (379)


Historical cost profit is not materially different from that presented in the
consolidated profit and loss account. Accordingly no separate analysis has been
presented.

Notes to the accounts - Granada

1. Exceptional Items
                                                          15 months ended 31 December      12 months ended 30 September 
                                                                      2003                             2002
                                                          Continuing  Discontinued  Total  Continuing Discontinued Total
                                                          operations    operations    £m   operations operations   £m
                                                          £m            £m                 Restated   Restated
                                                                                           £m         £m
Exceptional operating items - Group:
Digital goodwill impairment charge                         -             -            -    (250)      -           (250)
Network stock write off                                    -             -            -    (10)       -           (10)
Granada Film exit costs                                    -             -            -    (4)        -           (4)
Reorganisation and integration costs                      (16)           -           (16)  (4)        -           (4)
                                                          (16)           -           (16)  (268)      -           (268)
Exceptional operating items - joint venture:
       Share of Boxclever reorganisation costs             -            (10)         (10)   -        (16)         (16)
                                                           -            (10)         (10)   -        (16)         (16)
Exceptional non operating items:                                                                            
Fixed asset investments:
Provision in respect of listed investments               (100)           -           (100)  -         -            -
Provision against joint ventures                           -            (10)         (10)   -         -            -
Provision against trade investment                       (9)             -           (9)    -         -            -
Amounts provided in respect of fixed asset               (109)          (10)         (119)  -         -            -
investments
ITV Digital and ITV Sport:
Provision for net carrying value                          -              -            -     -        (29)         (29)
Provision for exit costs                                  -              -            -     -        (64)         (64)
Provision for debts due from ITV Digital/ITV              -              -            -     -        (11)         (11)
Sport and other items
Loss on cessation of ITV Digital and ITV Sport            -              -            -     -        (104)        (104)
Boxclever:
Write-back of investment in net liabilities               -              253          253   -         -            -
Provision for loans made to Boxclever                     -             (69)         (69)   -         -            -
Write-back of goodwill                                    -             (124)        (124)  -         -            -
Provision for debts due from Boxclever                    -             (19)         (19)   -         -            -
Provision for Boxclever exit costs                        -             (32)         (32)   -         -            -
Gain on cessation of Boxclever                            -              9            9     -         -            -
                                                         (109)          (1)          (110)  -        (104)        (104)
Total exceptional items before tax                       (125)          (11)         (136)  (268)    (120)        (388)

The service businesses of the Boxclever group were placed into administrative receivership on 23 September 2003.
As the administration was initiated by the holders of external debt, Granada is no longer deemed to have joint
control of the Boxclever joint venture as defined by FRS 9 'Associates and Joint Ventures'. As a consequence
Boxclever has ceased to be accounted for using the gross equity method. The unwinding of the joint venture
accounting has led to a release of Granada's net £41 million interest in Boxclever. A provision for £32 million
has been raised to cover potential liabilities that may arise as a result of Boxclever being placed into
administration. This is principally in respect of guarantees relating to property leases given to third parties
by Granada group companies

2. Reconciliation of operating profit to net cash inflow from operating activities

                                                15 months ended 31 December 2003 12 months ended 30 September 2002
                                                Continuing Discontinued Total    Continuing Discontinued Total
                                                operations operations   £m       operations operations   £m
                                                £m         £m                    Restated   Restated
                                                                                 £m         £m
Operating profit before exceptional items       161        -            161      127        2            129
Depreciation charges                            38         3            41       32         4            36
Amortisation of goodwill                        46         -            46       37         -            37
Increase in stocks                              (28)       -            (28)     (3)        -            (3)
Decrease in debtors                             65         -            65       37         -            37
(Decrease)/increase in creditors                (42)       (3)          (45)     8          (6)          2
Working capital                                 (5)        (3)          (8)      42         (6)          36
Net cash inflow from operating activities       240        -            240      238        -            238
before exceptional items
Expenditure relating to exceptional items:                                                  -
Operating loss (see note 1)                     (16)       -            (16)     (268)      -            (268)
Provision for impairment                        -          -            -        250        -            250
Decrease in stocks                              -          -            -        14         -            14
Decrease in creditors and provisions            (3)        (29)         (32)     (12)       (30)         (42)
Net cash outflow from exceptional items         (19)       (29)         (48)     (16)       (30)         (46)
Net cash inflow/(outflow) from operating        221        (29)         192      222        (30)         192
activities


3. Earnings per share
                                                                  15 months ended 31     12 months ended 30
                                                                  December 2003          September 2002
                                                                  Basic        Diluted   Basic        Diluted
                                                                  £m           £m        Restated     Restated
                                                                                         £m           £m
Profit/(loss) for the financial period attributable to            2            2         (378)        (378)
shareholders
Discontinued operations                                           (8)          (8)       187          187
Continuing operations                                             (6)          (6)       (191)        (191)
Continuing operations exceptional items (note 1)                  125          125       268          268
Continuing operations before exceptional items                    119          119       77           77
Continuing operations goodwill amortisation                       46           46        37           37
Profit for the financial period for continuing operations before  165          165       114          114
exceptional items
and goodwill amortisation
Weighted average number of shares in issue - million              2,746        2,746     2,747        2,747
Dilution impact of share options - million                        -            14        -            7
                                                                  2,746        2,760     2,747        2,754

Earnings/(loss) per ordinary share                                0.1p         0.1p      (13.8)p      (13.8)p
Adjusted earnings per share
Basic earnings/(loss) per share                                   0.1p         0.1p      (13.8)p      (13.8)p
Deduct: (earnings)/loss per ordinary share on discontinued        (0.3)p       (0.3)p    6.8p         6.8p
operations
Loss per share on continuing operations                           (0.2)p       (0.2)p    (7.0)p       (7.0)p
Add: loss per share on continuing operations exceptional items    4.5p         4.5p      9.8p         9.8p
Earnings per share on continuing operations before exceptional    4.3p         4.3p      2.8p         2.8p
items
Add: loss per ordinary share on continuing operations goodwill    1.7p         1.7p      1.3p         1.3p
amortisation
Earnings per share for the financial year for continuing          6.0p         6.0p      4.1p         4.1p
operations before exceptional items and goodwill amortisation


An adjusted earnings per share has been disclosed because in the view of the directors this gives a true
reflection of the underlying business.

The share options in the 12 months ended 30 September 2002 are antidilutive because they reduce the loss per
share. Therefore diluted earnings per share for the 12 months ended 30 September 2002 are the same as basic
earnings per share


4. Dividends

Dividends for the 15 month period totalled £81 million (12 months to 30 September 2002: £56 million). This
comprises £56 million paid to shareholders prior to the merger with Carlton and £25 million paid to ITV plc
after the merger. ITV plc will in turn pay its shareholders a dividend of 0.5 pence per share for the three
months to 31 December 2003.



5. Taxation

The effective tax rate in the 15 months ended 31 December 2003 on profits from continuing operations is higher
(12 months ended 30 September 2002: higher) than the nominal rate of UK corporation tax primarily as a result
of goodwill amortisation and exceptional items which are not deductible for corporation tax purposes. The
underlying tax rate on continuing operations taking account of these items is 27% (12 months ended 30 September
2002: 30%).

6. Intangible assets - goodwill
Group                                                                                               £m

Cost:

At 1 October 2002                                                                                   1,629

Additions                                                                                           -
At 31 December 2003                                                                                 1,629
Amortisation:

At 1 October 2002                                                                                   324

Charge for period                                                                                   46
At 31 December 2003                                                                                 370
Net book value:

At 31 December 2003                                                                                 1,259
At 30 September 2002                                                                                1,305

The acquired goodwill relating to the digital broadcasting business, originally amounting to £1,145 million and
currently with a carrying value of £895 million, is considered by Granada to have an indefinite useful life.
This is because of the durability and long term profitability of the broadcasting business, the strength of the
underlying brand and the high barriers to entry in the broadcasting part of the business. If such goodwill had
been amortised over a 20 year useful life (in line with the rebuttable presumption in FRS 10) operating profit
before exceptional items for the 15 months ended 31 December 2003 would have decreased by £62 million (12
months ended 30 September 2002: £57 million) and capitalised goodwill at 31 December 2003 would have been £62
million (30 September 2002: £nil) lower than reported.

As required by FRS 10 'Goodwill and Intangible Assets' a formal impairment review was carried out at 30
September 2002 in relation to the digital goodwill and an impairment of £250 million was recorded. A formal
impairment review has been carried out at 31 December 2003 in relation to the remaining net value of the
digital goodwill and no further charge was considered necessary.

7. Tangible assets
                                                         Leasehold land and buildings Vehicles,     
                                                         equipment and fittings
                                              Freehold                                         
                                              land                                             
                                              and                                               Rental
                                              buildings  Long        Short Owned       Leased   assets   Total
                                              £m         £m          £m    £m          £m       £m       £m
Group
Cost or valuation:
At 1 October 2002                             62         57          7     333         48      46        553
Additions                                     2          -           1     15          -       1         19
Disposals                                     (2)        -           -     (11)        -       (28)      (41)
At 31 December 2003                           62         57          8     337         48      19        531
Depreciation:
At 1 October 2002                             6          7           4     232         45      27        321
Charge for year                               2          1           1     32          1       4         41
Disposals                                     (1)        -           -     (8)         -       (15)      (24)
At 31 December 2003                           7          8           5     256         46      16        338

Net book value:
At 31 December 2003                           55         49          3     81          2       3         193
At 30 September 2002                          56         50          3     101         3       19        232


8. Investments
                                               Joint      Associated   Trade       Listed        Investment Total
                                               ventures   undertakings investments investments   in own     £m
                                                                                                 shares
                                               £m         £m           £m          £m            £m
                                                                                                 
At 1 October 2002                              (154)      30           23          208           32         139
Additions                                      1          5            -           -             7          13
Disposals                                      -          (5)          -           -             -          (5)
Share of attributable (losses)/profits         (16)       3            -           -             -          (13)
Profit and loss charge                         -          -            -           -             (8)        (8)
Amounts written off (note 1)                   (10)       -            (9)         (75)          -          (94)
Boxclever write-back (note 1)                  184        -            -           -             -          184
Other                                          (5)        -            (4)         14            -          5
At 31 December 2003                            -          33           10          147           31         221

                                                                                                 31         30
                                                                                                 December   September
                                                                                                 2003       2002
                                                                                                 £m         £m
Analysed as:
Fixed asset investments                                                                          221        307
Interest in net liabilities of joint                                                             -         (168)
ventures
                                                                                                 221        139

Joint ventures                            31 December 2003               30 September 2002
                                          Boxclever  Other    Total      ITV        Boxclever Other     Total
                                                                         Digital/
                                          £m         £m       £m         ITV Sport  £m        £m        £m
                                                                         £m
Group share of joint ventures:
Turnover                                  166        3        169        61         211       1         273
Loss before and after tax                 (16)       -        (16)       (99)       (27)      (1)       (127)
Fixed assets                              -          24       24         -          297       29        326
Current assets                            -          -        -          -          72        2         74
Share of gross assets                     -          24       24         -          369       31        400
Current borrowings                        -          (3)      (3)        -          (481)     (5)       (486)
Other current liabilities                 -          (21)     (21)       -          (125)     (17)      (142)
Share of gross liabilities                -          (24)     (24)       -          (606)     (22)      (628)
Share of net (liabilities)/assets         -          -        -          -          (237)     9         (228)
Loans to joint ventures                   -          -        -          -          69        5         74
                                          -          -        -          -          (168)     14        (154)

9. Reconciliation of movements in shareholders' funds

                                             Share    Share    Revaluation  Other    Profit   Total    Total
                                             capital  premium  reserve      reserve  and loss 2003     2002
                                             £m       £m       £m           £m       account  £m       £m
                                                                                     £m
Group
Balance at 1 October 2002                    277      112      40           1,079    133      1,641    2,076
Retained loss for period for equity          -        -        -            -        (79)     (79)     (434)
shareholders
Transfers                                    -        -        (1)          -        1        -        -
Boxclever write back of goodwill             -        -        -            -        124      124      -
Currency adjustments                         -        -        -            -        (1)      (1)      (1)
At 31 December 2003                          277      112      39           1,079    178      1,685    1,641

The cumulative amount of goodwill written off resulting from acquisitions made in earlier financial years net
of any goodwill attributable to subsidiary undertakings or businesses subsequently disposed of is £1,248
million (30 September 2002: £1,372 million).

10. Basis of preparation

The financial information contained in this report has been prepared on the basis of the accounting policies
set out in Granada plc's statutory accounts for the 15 months ended 31 December 2003.

Discontinued operations in the 15 months ended 31 December 2003 include Boxclever and Granada Business
Technology. The prior period results have been restated to reflect these businesses within discontinued
activities in accordance with FRS 3 'Reporting Financial Performance'.

The financial information for the 15 months ended 31 December 2003 and comparative information for the 12
months ended 30 September 2002 are abridged and therefore not Granada plc's statutory accounts for those
financial periods. Those accounts have been reported on by Granada plc's auditor. The report of the auditor was
unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. This is a
statutory disclosure required by the Companies Act 1985.

Financial review - Carlton

Set out below is a financial review of Carlton's results for the 15 months to 31
December 2003. Comparatives for 2002 are for the 12 month period to 30 September
2002.

Turnover

Turnover from continuing businesses (excluding share of joint ventures'
turnover) was £1,191 million (2002: £965 million). Group turnover fell, on a
like for like basis, mainly due to a weaker television advertising market in the
period from April to September, although this was partly offset by recovery in
the final calendar quarter.

Broadcast revenue

Carlton's share of ITV1 NAR was £835 million (2002: £660 million). Sponsorship
income was £16 million (2002: £12 million).

Carlton Screen Advertising turnover was £86 million (2002: £60 million) boosted
by strong product such as Lord of the Rings and Harry Potter.

Content revenue

Total content sales were £174 million (2002: £165 million), comprising sales to
UK broadcasters, including ITV, of £93 million (2002: £76 million),
international sales of £55 million (2002: £50 million) and video and publishing
sales of £26 million (2002: £39 million).

Profit

Profit before tax, amortisation and exceptional items from continuing operations
was £96 million (2002: £54 million).

Total operating EBITA before exceptional items was £91 million (2002: £69
million). Relative falls in advertising revenue were offset by cost savings from
initiatives started in advance of the merger.

Payments to the Government for the Group's wholly owned broadcasting licences
continue to be a significant element of costs. In the period these payments
totalled £131 million (2002: £111 million). This is calculated net of the
effects of digital penetration, which has been estimated at an average of 41%
(2002: 32%) in the period, reducing licence costs by £60 million (2002: £36
million).

Income from continuing joint ventures, associates and investments was £17
million (2002: loss £3 million) boosted by a strong performance from ITV2 and
the Screenvision companies.

Net interest charges were £12 million (2002: £12 million). Benefits from swaps
are the main reason for the reduced interest charge.

Loss before tax but after exceptional items and discontinued operations was £255
million (2002: £156 million loss).

Goodwill, exceptional items and amounts written off investments

Amortisation in the core operations was £24 million (2002: £18 million), of
which £14 million (2002: £11 million) related to broadcasting operations and £4
million (2002: £2 million) to joint ventures.

Exceptional operating items of £58 million relate primarily to restructuring,
reorganisation and merger costs.

Amounts written off investments of £273 million are mainly made up of the effect
of reclassifying the Thomson shares as current asset investments, writing them
down to their net realisable value in the process. This was based on the closing
31 December 2003 share price of EUR 16.9 compared with a book value of EUR 41.2
per share. The balance represents a £2 million write-down of the investment in
France Telefilms to its net realisable value.

Discontinued operations

Profits and losses from discontinued operations relate to adjustments to the
Technicolor sale transaction. 2002 also included the results of ITV Digital and
ITV Sport Channel.

Taxation, earnings and dividends

The effective rate of tax on continuing operations reflects non-deductible
goodwill amortisation. Earnings per ordinary share on continuing operations
before exceptional items (£339 million including amounts written off
investments) and amortisation (£24 million) were 12.7 pence (2002: 4.8 pence).
Basic loss per share was 37.8 pence (2002: 24.8 pence loss). The dividend for
the 15 month period is £43 million (2002: £66 million). ITV plc shareholders
will receive a dividend of 0.5 pence for the three months to 31 December 2003
which is being funded by a £25 million dividend from Granada plc to ITV plc
following the merger between Granada and Carlton.

Cash flow

In the 15 month period there was a cash inflow from operating activities of £107
million (2002: £269 million).  This figure includes proceeds from loan note
sales of £33 million (2002: £179 million) and an outflow arising from an
increase in working capital (stocks, programme and film rights, debtors and
creditors) of £7 million, primarily resulting from a reduction in creditors on
closure of businesses.

Gross cash inflows were £88 million (2002: £246 million) after tax, interest and
preference dividend payment but before all acquisitions and financing.  Further
cash outflows included ITV Digital and ITV Sport Channel closure costs (£31
million) equity dividends (£47 million), EMTN loan repayments (£35 million) and
capital expenditure (£15 million).  The net cash outflow in the period was £57
million (2002: inflow of £323 million).

Net debt was £527 million at 31 December 2003, compared with £460 million at 30
September 2002.  This increase in net debt in the 15 month period of £67 million
(2002: decrease of £47 million) comprises a net cash outflow before financing of
£18 million and translation differences and non-cash movements of £49 million
(these arose primarily from the strengthening of the euro against sterling,
which increased the book value of the exchangeable bond liability).



Henry Staunton
Finance Director








Consolidated profit and loss account - Carlton
                                                   15 months ended 31 December     12 months ended 30 September
                                                   2003                            2002
                                             Note  Continuing Discontinued Total   Continuing Discontinued Total
                                                   operations operations   £m      operations operations   £m
                                                   £m         £m                   £m         £m
Turnover:
Group and share of joint ventures' turnover        1,281          -        1,281   1,009      64           1,073
Less share of joint ventures' turnover             (90)           -        (90)    (44)       (64)         (108)
Group turnover                                     1,191          -        1,191   965        -            965
Total operating costs                              (1,178)        -        (1,178) (907)      -            (907)
Operating profit - before exceptional items        71             -        71      53         -            53
Operating loss - exceptional items           1     (58)           -        (58)    5          -            5
Group operating profit                             13             -        13      58         -            58
Share of operating profit/(loss) in:
   Joint ventures before exceptional items         10             -        10      -          (99)         (99)
and goodwill
   amortisation
   Joint ventures - goodwill amortisation          (4)            -        (4)     (2)        -            (2)
Joint ventures                                     6              -        6       (2)        (99)         (101)
Associated undertakings                            4              -        4       (3)        (3)          (6)
Investment income                                  3              -        3       -          -            -
Profit on sale of businesses                       -              12       12      -          12           12
Loss on sale or termination of businesses    1     (8)            -        (8)     -          (99)         (99)
Amounts written off investments              1     (273)          -        (273)   (8)        -            (8)
(Loss)/profit before interest and tax              (255)          12       (243)   45         (189)        (144)
Net interest                                       (12)           -        (12)    (12)       -            (12)
(Loss)/profit on ordinary activities before        (267)          12       (255)   33         (189)        (156)
taxation
Tax on (loss)/profit on ordinary activities  5     16             1        17      (9)        9            -
(Loss)/profit for the financial period             (251)          13       (238)   24         (180)        (156)
Dividends                                    4                             (43)                            (66)
Amount transferred from reserves                                           (281)                           (222)

(Loss)/earnings per share (basic)            3     (39.8)p        2.0p     (37.8)p 2.0p       (26.8)p      (24.8)p
                                                                                                           
(Loss)/earnings per share (diluted)          3     (39.8)p        2.0p     (37.8)p 2.0p       (26.8)p      (24.8)p
                                                                                                           
Adjusted earnings per share:


before exceptional items and amounts written 3     9.3p                            2.2p
off investments (basic)
before exceptional items, amounts written    3     12.7p                           4.8p
off investments and goodwill amortisation
(basic)



  Consolidated balance sheet - Carlton


                                                                          31 December 2003   30 September 2002
                                                                                                
                                                                      Note   £m      £m         £m      £m
Fixed assets:
Intangible assets                                                     6              301                320
Tangible assets                                                       7              98                 110
Investments in joint ventures:
   Share of gross assets                                                     56                 46
   Share of gross liabilities                                                (53)               (44)
   Loans to joint ventures                                                   29                 19

   Goodwill                                                                  53                 58
                                                                      8      85                 79
Investments in associated undertakings                                8      10                 6


Other investments                                                     8      3                  410
Total fixed asset investments                                         8              98                 495
                                                                                     497                925
Current assets:
Stocks                                                                       4                  6


Programme and film rights                                                    172                179
Debtors: amounts falling due within one year                                 175                170

Debtors: amounts falling due after more than one year                        16                 18
Debtors                                                                      191                188

Investments                                                                  185                41

Cash and other liquid funds                                                  492                553
                                                                             1,044              967
Creditors: amounts falling due within one year                               (325)              (402)
Net current assets                                                                   719                565
Total assets less current liabilities                                                1,216              1,490
Creditors: amounts falling due after more than one year

Loans                                                                        (907)              (855)

Convertible debt                                                             (84)               (91)
Finance lease creditors                                                      (28)               (32)

Other creditors                                                              (11)               (31)
                                                                                     (1,030)            (1,009)
Provisions for liabilities and charges                                               (14)               (48)
Net assets                                                                           172                433

Capital and reserves:
Called up share capital                                               9              42                 42
Share premium account                                                 9              151                151

Other reserves                                                        9              17                 17

Profit and loss account                                               9              (38)               223
Shareholders' funds                                                   9              172                433
Attributable to

Equity shareholders' funds                                                           8                  269

Non-equity shareholders' funds                                                       164                164
Total shareholders' funds                                             9              172                433



  Summary consolidated cash flow statement - Carlton


                                                                              15 months ended    12 months ended
                                                                              31 December 2003   30 September 2002
                                                                    Note      £m        £m       £m      £m
Net cash inflow from operating activities                           2                   107              269
Dividends received from joint ventures and associated undertakings                      1                1
Net cash outflow from returns on investments and servicing of                           (14)             (28)
finance
Taxation                                                                                (6)              4
Free cash flow                                                                          88               246
Capital expenditure and financial investment:
   Purchase of tangible fixed assets                                          (15)               (12)
Purchase of intangible assets                                                 (1)                -
Payments to ITVDigital/ITVSport Channel                                       (31)               (97)
Sale of intangible and tangible fixed assets                                  2                  1
Other net investments                                                         (12)               (18)
Net cash outflow from capital expenditure and financial investment                      (57)             (126)
Net cash outflow from acquisitions and disposals                                        (2)              (8)
Net cash inflow before dividends, liquid resources and financing                        29               112
Equity dividends paid                                                                   (47)             (55)
Net cash (outflow)/inflow before financing                                              (18)             57
Financing:                                                                     (39)              266

Net change in long term financing
Net cash (outflow)/inflow from financing                                                (39)             266
(Decrease)/increase in cash in the period                                               (57)             323



  Reconciliation of net cash flow to movements in net debt - Carlton
                                                                                   15 months     12 months
                                                                                   ended         ended
                                                                                   31 December   30 September
                                                                                   2003          2002
                                                                                   £m            £m
(Decrease)/increase in cash in the period                                          (57)          323
Cash flow from decrease/(increase) in debt                                         39            (270)
Change in net debt resulting from cash flows                                       (18)          53
Translation difference and non-cash movements                                      (49)          (6)
Movement in net debt in the period                                                 (67)          47
Opening net debt                                                                   (460)         (507)
Closing net debt                                                                   (527)         (460)


  Consolidated statement of total recognised gains and losses - Carlton

                                                                                   15 months     12 months
                                                                                   ended         ended
                                                                                   31 December   30 September
                                                                                   2003          2002
                                                                                   £m            £m
Loss for the financial period                                                      (238)         (156)
Exchange differences on foreign currency net investments                           (1)           (7)
Total recognised gains and losses in the period                                    (239)         (163)



  Notes to the accounts - Carlton


1. Exceptional items
                                                   15 months ended 31 December    12 months ended 30 September
                                                   2003                           2002
                                                   Continuing Discontinued Total  Continuing Discontinued Total
                                                   operations operations   £m     operations operations   £m
                                                   £m         £m                  £m         £m
Exceptional operating items:
Reorganisation and restructuring                   (4)        -            (4)    (3)        -            (3)
Asset write offs                                   (2)        -            (2)    (7)        -            (7)
Goodwill impairment                                -          -            -      (4)        -            (4)
Net litigation income                              -          -            -      19         -            19
Merger costs                                       (52)       -            (52)   -          -            -
                                                   (58)       -            (58)   5          -            5
Profit on sale of businesses                       -          12           12     -          12           12
Loss on termination of businesses                  (8)        -            (8)    -          (99)         (99)
Amounts written off investments                    (273)      -            (273)  (8)        -            (8)
Total exceptional items before tax                 (339)      12           (327)  (3)        (87)         (90)
Merger costs are further analysed in the table
below:
                                                                                                          £m
Redundancy costs                                                                                          4
Professional fees                                                                                         11
Merger retention bonuses                                                                                  5
Equity Participation Plan 1 costs                                                                         20
Equity Participation Plan 2 costs                                                                         7
Ex-Cap issue cost write off and other charges                                                             5
                                                                                                          52

Further details of the costs of directors are included in the remuneration report in the Report and Accounts of
Carlton Communications Plc for the 15 months ended 31 December 2003.


   2. Reconciliation of operating profit to net cash inflow from operating
activities


                                                                               15 months ended  12 months ended
                                                                               31 December 2003 30 September 2002
                                                                                                
                                                                               £m
                                                                                                £m
                                                                               13               58

Operating profit
Depreciation                                                                   26               23
Amortisation                                                                   20               19
Stocks                                                                         2                1
Programme and film rights                                                      6                9
Debtors                                                                        6                12
Creditors                                                                      (21)             (34)
Share based compensation                                                       22               -
Sale of current asset investments                                              33               179
Non-cash fixed asset impairment                                                -                2
Profit on sale of fixed assets                                                 -                -
Cash inflow from operating activities                                        107                269



3. Earnings per share
                                                                            15 months ended 12 months ended
                                                                             31 December     30 September
                                                                             2003            2002
                                                                             Basic   Diluted Basic    Diluted
                                                                             £m      £m      £m       £m
Loss for the financial period attributable to shareholders                   (238)   (238)   (156)    (156)
Preference dividend                                                          (17)    (17)    (11)     (11)
Discontinued operations                                                      (13)    (13)    180      180
Continuing operations                                                        (268)   (268)   13       13
Continuing operations exceptional items (note 1)                             57      57      (7)      (7)
Amounts written off investments (note 1)                                     273     273     8        8
Continuing operations before exceptional items and amounts written off       62      62      14       14
investments
Continuing operations goodwill amortisation                                  24      24      18       18
Profit for the financial period for continuing operations before exceptional 86      86      32       32
items,

amounts written off investments and goodwill amortisation
Weighted average number of shares in issue - million                         672     672     671      671
Dilution impact of share options - million                                   -       12      -        -
                                                                             672     684     671      671

Loss per ordinary share                                                      (37.8)p (37.8)p (24.8)p  (24.8)p
Adjusted earnings per share
Basic loss per share                                                         (37.8)p (37.8)p (24.8)p  (24.8)p
Deduct: (earnings)/loss per ordinary share on discontinued operations        (2.0)p  (2.0)p  26.8p    26.8p
(Loss)/earnings per share on continuing operations                           (39.8)p (39.8)p 2.0p     2.0p
Add: loss/(earnings) per share on continuing operations exceptional items    8.5p    8.5p    (1.0)p   (1.0)p
Add: loss per ordinary share on amounts written off investments              40.6p   40.6p   1.2p     1.2p
Earnings per share on continuing operations before exceptionals and amounts  9.3p    9.3p    2.2p     2.2p
written off investments
Add: loss per ordinary share on continuing operations goodwill amortisation  3.4p    3.4p    2.6p     2.6p
Earnings per share for the financial year for continuing operations before   12.7p   12.7p   4.8p     4.8p
exceptional items, amounts written off investments and goodwill amortisation

An adjusted earnings per share has been disclosed because in the view of the directors this gives a true
reflection of the underlying business.

The share options in the 15 month period ended 31 December 2003 are antidilutive because they reduce the loss
per share. Therefore diluted earnings per share for the 15 months ended 31 December 2003 are the same as
basic earnings per share.




4. Dividends
                                                                               15 months      12 months ended
                                                                               ended
                                                                                              30 September
                                                                               31 December    2002
                                                                               2003
                                                                               £m             £m
Interim of 2.0p per ordinary share (2002: 3.275p per share)                    13             22
Second interim dividend of 2.0p per ordinary share (2002: nil)                 13             -
Proposed final dividend of 5.0p per ordinary share (2002: 5.0p per share)      -              33
Ordinary dividends - equity                                                    26             55
Dividends paid on 6.5% Preference shares                                       17             11
Preference dividends - non-equity                                              17             11
Total dividends                                                                43             66


ITV plc shareholders will receive a dividend of 0.5 pence for the three months to 31 December 2003 which is
being funded by a £25 million dividend from Granada plc to ITV plc following the merger between Granada and
Carlton.



5. Tax

    The effective rate of tax in the 15 months ended 31 December 2003 on losses from continuing operations is
lower (2002: lower) than the nominal rate of UK corporation tax primarily as a result of the net effect of amortisation 
and exceptional items, which are not deductible for corporation tax purposes, and prior year adjustments. The underlying
tax rate on continuing operations, excluding the effect of these items, is 25% (2002: 23%).

6. Intangible fixed assets
Group                                                                   Goodwill   Film         Total
                                                                                   libraries
                                                                        £m         and other    £m
                                                                                   £m
Cost:
At 1 October 2002                                                       235        125          360
Additions                                                               -          1            1
At 31 December 2003                                                     235        126          361
Amortisation:
At 1 October 2002                                                       30         10           40
Charge for the period                                                   16         4            20
At 31 December 2003                                                     46         14           60
Net book value:
At 31 December 2003                                                     189        112          301
At 30 September 2002                                                    205        115          320


7. Tangible assets
                                                                    Land and buildings
                                                                    Freehold Leasehold Plant and    Total
                                                                    £m       £m        Equipment    £m
                                                                                       £m
Group

Cost or valuation:
At 1 October 2002                                                   27       34        94           155
Additions                                                           -        1         15           16
Disposals                                                           -        (1)       (12)         (13)
At 31 December 2003                                                 27       34        97           158
Depreciation:

At 1 October 2002                                                   1        9         35           45
Charge for the period                                               1        3         22           26
Disposals                                                           -        -         (11)         (11)
At 31 December 2003                                                 2        12        46           60
Net book value:
At 31 December 2003                                                25        22        51           98
At 30 September 2002                                                26       25        59           110


8. Investments
                                                          Joint     Associated     Other        Own shares Total
                                                          ventures  undertakings   investments  held       £m
                                                          £m        £m             £m           £m
Cost and funding
At 1 October 2002                                         52        6              407          11         476
Loans advanced                                            10        6              -            -          16
Loans repaid or discharged                                (4)       -              -            -          (4)
Share of retained results                                 -         (2)            -            -          (2)
Exchange differences and other movements                  3         -              49           (2)        50
Transfer to current asset investments                     -         -              (453)        -          (453)
At 31 December 2003                                       61        10             3            9          83
Goodwill
At 1 October 2002                                         58        -              -            -          58
Additions during the period                               1         -              -            -          1
Amortisation                                              (4)       -              -            -          (4)
Exchange differences and other movements                  (2)       -              -            -          (2)
At 31 December 2003                                       53        -              -            -          53
Provision
At 1 October 2002                                         31        -              -            8          39


Provision for impairment                                  (2)       -              274          -          272
Transfer to current asset investments                     -         -              (273)        -          (273)
At 31 December 2003                                       29        -              1            8          38
Net book value at 31 December 2003                        85        10             2            1          98
Net book value at 30 September 2002                       79        6              407          3          495



9. Reconciliation of movements in shareholders' funds

                                                        Share     Share     Other    Profit    Total    Total
                                                        capital   premium   reserve  and loss  2003     2002
                                                        £m        £m        £m       account   £m       £m
                                                                                     £m
Group
Balance at 1 October 2002                               42        151       17       223       433      663
Retained loss for period for equity shareholders        -         -         -        (281)     (281)    (222)
New share capital issued                                -         -         -        -         -        1
Other reserve movements                                 -         -         -        -         -        (2)
Share based compensation                                -         -         -        20        20       -
Goodwill reinstated on sale of businesses               -         -         -        1         1        -
Currency adjustments                                    -         -         -        (1)       (1)      (7)
At 31 December 2003                                     42        151       17       (38)      172      433

The cumulative amount of any goodwill written off resulting from acquisitions made in earlier financial years
net of any goodwill attributable to subsidiary undertakings or businesses subsequently disposed of is £934
million (30 September 2002: £938 million).

10. Basis of preparation

The financial information contained in this report has been prepared on the basis of the accounting policies
set out in Carlton Communications Plc's statutory accounts for the 15 months ended 31 December 2003.

The financial information for the 15 months ended 31 December 2003 and comparative information for the 12
months ended 30 September 2002 are abridged and therefore not Carlton Communications Plc's statutory accounts
for those financial periods.  Those accounts have been reported on by Carlton Communications Plc's auditors.
The report of the auditors was unqualified and did not contain a statement under section 237(2) or (3) of the
Companies Act 1985.  This is a statutory disclosure required by the Companies Act 1985.

Copies of this review are being sent to all shareholders and are available from the registered office: The
London Television Centre, Upper Ground, London, SE1 9LT.



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