The losses result from a goodwill impairment charge of 拢224.8m. Before the charges Cordiant reported pre-tax profits of 拢25.7m, compared with profits of 拢57.5m last time.
The group, which owns the Bates advertising network, reported revenues up 17.9% to 拢605m compared with 拢513m in 2000, down 8% on an underlying basis. Pre-tax profit was down to 拢25.7m from 拢57.5m last time.
In a statement, Bungey said: "While previous rates of revenue decline have abated and we are seeing early signs of business activity emerge, we forecast no revenue growth this year. The measures we have taken to reduce our cost base are targeted to deliver a 50% improvement in margin. The mix of businesses we have assembled, coupled with a maintained focus on cost, positions us well to profit quickly from any sustained upturn."
Cordiant reported an exceptional operating charge of 拢27.6m made in response to the downturn and as result of its efforts to streamline, refocus and strengthen operations, and eliminate loss-makers. It said this was expected to result in an expected cost savings in excess of 拢30m in 2002.
The company says it is continuing to pursue its strategy, set out more than four years ago, to extend its operations beyond advertising into the higher margin, higher growth areas of marketing services and specialist communications through organic development as well as acquisition.
Reported revenues in the UK increased by 41% to 拢118.6m. On an underlying basis, revenues decreased by 3.3%. Operating profits totalled 拢13.7m, with operating margins increasing to 11.5% from 9.4% in 2000, principally due to the margin contribution from the acquired specialist communications operations and improved profitability in the group's advertising business.
North American revenues increased by 28.1% to 拢190.3m. Revenues there declined by 14.5% on an underlying basis. Cordiant said significant declines were experienced in specialist communications, especially in project-based areas and in servicing technology-related clients in North America. The group's principal advertising and integrated marketing businesses showed greater resilience, experiencing a more modest decline overall.
Cordiant, having lost its valuable Hyundai media account in the US, is still waiting to hear about the outcome of the creative pitch for Hyundai.
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