LONDON: Showing scant respect for for traditional British class deference, the global financial downturn has hewn away at the share prices of the communications empires controlled by doughty business noblemen, Sir Michael and Sir Martin.
The share price of ITV, chaired by Sir Michael Grade, fell below £0.30 for the first time last week to a low of £0.2825, reducing the company's market value to just £1.2bn ($1.9bn; €1.5bn).
Among the main causes of this situation are concerns about the company's growing pension fund deficit, which may require a further input of capital and result in a lower dividend to shareholders.
Shares in Sir Martin Sorrell's WPP Group also fell to a 52-week low of £3.10, though they later recovered to reach £3.1575.
As previously reported, investment bank Collins Stewart recently reduced WPP's profit forecast by 15% for 2009 and 32% for 2010.
Credit Suisse, however, is more positive. I opinews that WPP is better placed than in the 2001–02 adspend slowdown, and benefits from strong "geographical diversification" with 22% of its revenues coming from emerging markets.
Says the financial giant: "WPP offers considerably lower than average structural risk among media names, being media neutral and less exposed to the negative long-term outlook of newspapers, magazines and directories."
It warned, however, that “a degree of short-term caution is necessary in the face of slowing ad growth."
Data sourced from Media Guardian; additional content by WARC staff