After much press speculation, Cordiant confirmed this morning that it was looking to sell non-core assets, including UK public relations firm Financial Dynamics International and German advertising agency Scholz & Friends.
It said also that it was looking for a speedy resolution to the sale of its Australian advertising business, which comprises George Patterson Bates and The ±±¾©Èü³µpk10 Palace, as well as a stake in ZenithOptimedia.
In a conference call, Hearn said: "We are not being forced to sell any of these businesses, but we are mindful of the company's debt levels and recognise the positive impact this will have of helping to reduce long-term debt."
The news failed to have an impact on Cordiant's shares, which remained unmoved this morning at 27.5p. The company's stock price has collapsed over the last year, dropping 90% as the effects of the downturn took hold.
Hearn said that market conditions remain depressed and that he saw little prospect of revenue growth in the coming year. Analysts are forecasting pre-tax profits of £22.7m for 2002. Cordiant has already said revenues are down 11% to £533m, which it said was in line with expectations.
Cordiant said it had already received approaches regarding the sale of its 77% stake in Scholz & Friends, but refused to confirm whether it had received any bids other than the one reported earlier this week from the agency's management team.
Potential bidders could include WPP Group. Sir Martin Sorrell, the chief executive of WPP, said last year that his company would be interested in acquiring the agency.
Cordiant also confirmed this morning that it would sell its 25% stake in media planning and buying group ZenithOptimedia. The obvious choice to buy this stake is Publicis Groupe, which owns the other 75%.
In its trading statement, Cordiant said that it had far exceeded its targets for cutting costs. It said it had achieved cost savings of £45m, which is nearly double the £27m expected target.
Hearn said that almost half the £45m came by way of job cuts last year when Cordiant axed more than 1,000 jobs.
After the sell-off, Cordiant will be left with its core advertising agency asset the Bates Group, which will become the focus of Cordiant business. The remaining Bates network includes Healthworld, the marketing services network 141 and design group Fitch.
"We are creating a leaner, stronger group better placed to win revenue in the future," Hearn said.
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