Cordiant said that Allied Domecq notified it on Friday of its intention to terminate its contract with Cordiant with effect from October 2003. The news sent Cordiant shares crashing 67.27%, down 18.5p, to just 9p.
Allied Domecq is a major Bates UK client, with the agency handling nine of the drinks giant's brands including Ballentine's Whisky, Beefeater Gin, Malibu and Tia Maria.
The loss comes hard on the heels of those of the 拢21m Royal Mail account and the 拢25m Woolworths account, bringing account losses this year alone to 拢64m.
In the current financial year, Cordiant said it had budgeted for revenue from Allied Domecq that accounts for approximately 3.4% of the group's revenue in 2002.
In a statement, Cordiant said that the direct impact of the client loss on revenue in 2003 "will not be material". However, it said there will be a substantial impact on operating profit from 2004 onwards.
Cordiant was due to report its preliminary results on April 30 in line with the headline figures announced on February 20, but in the light of what it describes as "recent developments", Cordiant said it was now evaluating whether it can issue its results by May 1.
"Cordiant recognises that, in accordance with the normal practice of the UK listing authority, trading in its shares will be suspended in the event that it is unable to issue its results by then," it said in a statement.
Cordiant has indicated this latest loss could lead to the break-up or final sell-off of the group. Following Allied Domecq's decision, the board of Cordiant said it was now actively "investigating alternative strategic options for the group".
It does not say what these might be, only that they are in addition to the disposal programme it has already announced in Germany, Australia and in the UK. At the time, Cordiant chief executive David Hearn said the company's planned asset sale had not been forced upon the group.
Last week, Bates UK confirmed that was making a number of redundancies following the loss of its Woolworths and Royal Mail accounts.
The loss of the Royal Mail and Woolworths business combined account for almost a quarter of Bates UK's income.
Chris Herd, the agency's managing director, has declined to put a figure on the job losses, which are to be spread across all departments.
If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the .