The company said it could see no sign of any downturn in consumer spending across its range of businesses.

Granada's management is bullish about the company's future, saying that it was continuing to make progress in the first months of the new financial year.

Pre-tax profits for the full financial year grew by 13% to £735m ($1.21bn) on a turnover of £3.98bn ($6.6bn).

Happy returns for Granada

Borrowing fell to £2.04bn - down from £2.62bn a year earlier.

Granada also booked exceptional profits of £68m by selling its stake in the Savoy Hotel Group, and other assets.

Dividends will rise by 17.5% to a total pay-out of 16.7p a share.

Beyond expectations

The markets were pleased with the result. One analyst said: "The figures look good and the mix is better than expected with operating profits way above expectations."

On the London Stock Exchange, Granada shares rose nearly 5% to 915p - up 42 pence.

Future perfect

Granada's Chairman Gerry Robinson said: "We are continuing to provide very significant organic growth in media and hospitality whilst preparing for the future through innovation and investment."

The firm hopes for the breakthrough of digital television. It owns 50% of ONdigital, the multi-channel service launched last week which can be received through a normal TV aerial.

Mr Robinson said he was confident about the venture's prospects.

Granada's Chief executive, Charles Allen, predicted the company would prove to be "resilient" in the face of any economic downturn.

From food to soap opera

In the UK, the conglomerate is best known for its television presence, holding television licences in London (LWT), the Northwest, Yorkshire and Tyne Tees.

The company says it is the largest commercial programme producer in the UK, making 6,000 hours of programmes a year for ITV, the BBC, Channel 4, Channel 5, GSB and BSkyB.

Granada's most successful offering is the television soap opera "Coronation Street".

However, most of Granada's profits come from its food, retailing and hotel business.

The company controls a string of own-brand motorway service stations and several hotel chains including the Meridien, Penthouse and Heritage brands.