Cordiant Dodges Share Suspension with New Finance Deal

02 May 2003

The threatened suspension of trading in Cordiant Communications’ shares [WAMN: 29-Apr-03] has been lifted after the floundering agency group reported full-year results.

Earlier this week, Cordiant warned there was a chance its 2002 results might not be available by the London Stock Exchange’s deadline of May 1, in which case trading in its stock would halt. The group revealed that release of its figures had been delayed while it renegotiated financing deals in the wake of Allied Domecq’s decision to withdraw its advertising business.

However, Cordiant has now put together a hasty ‘agreement in principle’, with its lenders, allowing results to be posted before trading opened on Thursday, narrowly meeting the deadline.

The company reported pre-tax losses of £228.2 million ($367.5m; €326.9m), down from £270.8m in 2001. Revenues slipped 11.9% to £532.7m, while operating profits climbed 1.4% to £37m.

Cordiant’s new financing deal allows it to retain existing undrawn credit until July 15, giving it some breathing space to negotiate a new funding package.

The news sent Cordiant shares up by around 70% to £0.1275 pre-opening trade, though this is still some way down on the £0.1775 at which they started the week.

Data sourced from: Financial Times; additional content by WARC staff