Its shares fell to 69p this afternoon, their lowest since October, having begun to lose ground earlier this week as investors aired fears about its purchase of Lighthouse Global Network. On Monday, its shares fell to 77p, down 2.53% from Friday's close of 79p. Cordiant is due to post its full-year results in March.
Cordiant paid £392m for Lighthouse, which includes City PR firm Financial Dynamics and design consultancy Fitch, when it bought the group at the height of the dotcom boom in July 2000. According to reports, Lighthouse would now be valued at just £125m, hit by the downturn in advertising and marketing revenues.
The current Cordiant share price is a far cry from its market high of more than 400p at the height of the media boom in early 2000, around the time it made its purchase of Lighthouse, which even then many analysts thought it was overpaying for.
Along with the estimated £200m write-off, Cordiant has also spent £25m in shedding 1,100 jobs during the year.
Analysts have forecast profits of around £30m for the year. The group warned revenues were expected to be 9% lower than in the previous year. However, since then, its share price has taken a further knock with the news last month that it lost the £212m media-buying account for Hyundai. Speculation is rife that the creative account is set to follow the media business out of the door.
Uncertainty surrounding the future of Cordiant CEO Michael Bungey has been running high, with some saying that he will not last much longer.
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