Predictions For Demerged Cordiant Businesses

Merrill Lynch is predicting that Saatchi & Saatchi plc, after its demerger from Cordiant (subscribers see Cordiant Confirms Demerger Plans), will increase its pre-tax profits from £14.7m in 1996 to £21.7m in 1997, £30.9m in 1998 and £39.9m in 1999. Turnover for the group will remain static however for 1997 at £384m, though revenue growth should stand at 5% in 1998 and 1999. 1997 revenue for Saatchi’s UK office should come in at £63m, up 6%.

Forecasts for Bates Worlwide, which will become the Cordiant Communications Group, put group revenue at £322.7m in 1997, down 4% year on year, while it should rise 4% in 1998 and 6% in 1999. The UK should show good growth in 1997 with a rise of 8% to £42.4m. Pre-tax profits should come to £24.1m in 1997 (up 1.7%), £32m in 1998 and £40.1m in 1999.

Zenith, which will be 50/50 owned by Bates and Saatchi, is expected to bring in revenue of £49.3m in 1996 (up 1%), followed by rises of 6% in 1998 and 1999. Pre-tax profit should reach £7.5m in 1997, followed by £8.6m in 1998 and £9.8m in 1999.

Merrill Lynch: 0171 772 1000