Following months of speculation by investors, press and the money industry, Cordiant Communications has finally confirmed its asset disposal intentions.
Commenting on a trading statement issued by the group Thursday morning, chief executive David Hearn said: “Market conditions remain depressed and we see little prospect of revenue growth this year.”
In the year to December 30 2002, group revenues fell 11% to £533 million ($850.80m; €790.20m), much in line with expectations, although Cordiant warned its 2002 results will include an exceptional charge of £155m.
As to the current year: “We've aggressively driven costs down by a further £45m into 2003 and are now focusing the group on its core strengths,” Hearn reported. “This will also rebuild our balance sheet. We are creating a leaner, stronger group better placed to win revenue in the future.”
Exactly as predicted by WAMN on Wednesday [‘Cordiant will retain the Bates network in the short term while disposing of most other assets to raise cash and quieten its creditors. It will then buttress the Bates balance sheet every which way it can …’], Cordiant is hanging onto Bates Worldwide and its marketing services progeny: the specialist medical network HealthWorld, branding/design group Fitch, and below-the-line specialist 141 Worldwide.
All else is up for grabs, including fiscal PR shop Financial Dynamics, Australia’s George Patterson Bates and The Campaign Palace, plus Hamburg-based European network Sholz & Friends. A ‘for sale’ tag is also hung on Cordiant’s 25% holding in Publicis-controlled ZenithOptimedia, although it is doubtful this will be offered on the open market as Publicis has right of first refusal.
And while we are polishing WAMN's crystal ball, one more psychic stab: Cordiant will shortly dump its now inappropriate anodyne moniker in favour of the Bates name.
Data sourced from: Multiple origins; additional content by WARC staff