City News From MediaTel Insight- Reuters, WPP and Cordiant
Reuters Reuters has this morning released Q1 trading figures which are broadly in line with expectations, showing a 6% decline in revenues to £912 million.
The company said that it expects the first half to yield a 2-3% decline in subscription revenues and is more cautious than anticipated on H2 performance, with a decline of 5-6% being predicted. The market had expected a forecast of 4-5% decline, according to analysts at ABN Amro.
As a result of this fairly pessimistic outlook downgrades are likely today and will negatively impact the shares, says ABN.
WPP Continued weakness in the US economy has pushed WPP Q1 revenues down by 2% on last year, £945.8 million for the period to end of March 2002 compared with £966.4 million last year.
A 6% revenue increase in Europe was abrogated by a drop of 7% in North America, the UK was up over 2%. Growth in advertising and media investment management was flat but public relations was the biggest loser, falling 13% for the quarter. Information and consultancy was up over 6% .
On a like-for-like basis, excluding acquisitions and currency fluctuations, revenues fell by almost 9%. Net debt for the quarter increased to £1,505 million, compared to £987 million last year.
Cordiant Pre-tax profits at marketing and communications company, Cordiant Communications, more than halved in 2001 following a year of restructuring and cost-cutting.
Profits fell by 52.2% from £57.5 million in 2000 to £25.7 million for the year ended 31 December 2001. This is excluding exceptional items and goodwill, after which Cordiant posted a pre-tax loss of £270.8 million.
Operating profit dropped by 40.6% to £36.5 million, whilst underlying revenue was down 8.0% to £605.0 million.
Last year was described in the statement as ‘extremely difficult’ and the company is now not expecting any revenue growth this year. Nevertheless chief executive Michael Bungey says that the cost-cutting and restructuring that have been implemented leave Cordiant in a good position to benefit from a sustained upturn in advertising.
Cordiant’s strategy is to move the business beyond just advertising into the higher margin area of marketing services and specialist communications. As a primarily advertising group, new disciplines have had to be established in order to build a ‘broadly based communications group’, the company said.
Subscribers to MediaTel Insight can access these reports in full, along with more national and international media analysis, forecasts and news. For subscription details please visit the site.
