Cordiant said it is to create the Bates Group, which will integrate Bates Advertising, the marketing company 141, the branding and design group Fitch and specialist network Healthworld. These will form a single offering, but still retain the individual brands so that clients can access individual services if so required.
Michael Bungey, the outgoing CEO of Cordiant, said: "Our strategy is to deliver an integrated, media-neutral, broad-based communications capability. This is what clients tell me they want. It's a bold strategy that will deliver further efficiencies across the group, as well as a unique platform from which to generate increased revenue."
The Bates Group integration, as well as other cost initiatives, are expected to lead to additional operating expenses of 拢27m in the second half of the year. Cordiant said the integration will deliver cost savings through reduced management and property costs, and the elimination of duplicated support functions.
The review does not affect Cordiant's PR network FD International or its Scholz & Friends advertising agency -- both of which have been mentioned as assets that could be sold by Cordiant, although the company denies it is looking to sell.
When the group unveiled its interim results this morning, it revealed that profits had fallen by 48% to 拢11.5m and revenues were down by 9.8% to 拢277.1m.
Advertising revenue was hit by a drop of 9.5%, bringing in 拢212.5m. However, this decline does not take into account the loss of the Hyundai and Wendy's accounts in the US, which will hit revenues further when Cordiant posts its full-year results.
The group has already incurred an exceptional charge of 拢2.3m, due to severance costs following the loss of the Hyundai account.
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