The news came as Cordiant reported a 48% collapse in pre-tax profits to 拢11.5m, compared with 拢22.1m last year. It saw a drop in revenues of 9.8% to 拢277.1m for the six months ending June 30, and the company warned that it sees no end to the gloom at the moment.
In a statement, Bungey said: "Depressed trading levels persist throughout our markets. While conditions may have stabilised, I see no signs of a recovery any time soon. Our cost-cutting exercises have been extensive and, where necessary, will continue."
To make matters worse, Cordiant said that its interim results do not yet show the impact of the losses of the Hyundai and Wendy's accounts in the US. The company said that these are expected to reduce underlying revenues on a full-year basis by 1.5% in 2002 and by 3% in 2003. For the first half of the year, the US operations saw revenue fall by 19.3% to 拢81.2m, a fall Cordiant blamed on lower levels of activity in the specialist communications business.
Cordiant's UK operations proved to be the most resilient, recording a fall in revenues of 5.8% to 拢55.7m, compared with continental Europe, which saw a drop of 10.4% to 拢65.7m.
Although the group claimed that Bungey has been signalling his intention to resign from Cordiant for more than two years, there has been increasing pressure from shareholders to see a new senior management team put in place as the share price fell.
Fund managers Active Value have been calling for a shake-up and Bungey's removal for some time. Cordiant directors recently met with Active Value, led by Julian Treger and Brian Myerson, to discuss plans for the agency. Active Value is now Cordiant's second largest shareholder after Harris Associates. Harris holds a 9.29% stake and is led by David Herro, the man who brought down Maurice Saatchi.
Shares in the group hit a record low yesterday of 46.3p, but when the market opened this morning it managed to claw back some ground, rising 1p on yesterday's close to trade at 48.5p -- an increase of 2%.
If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the .