Sharewatch: Cordiant Rises After Last Minute Restructuring
Troubled advertising group Cordiant Communications was the media sector’s big mover again on Thursday, seen up 73.33% after reporting its 2002 results in time to avert a suspension in trading of its shares (see Cordiant Bounces Back As Short-Term Funding Is Agreed).
However, it may well prove a hollow victory for the group as Cordiant’s auditor, KPMG, said it was unable to form an opinion as to whether the accounts gave a true and fair view because of the uncertainty facing the company. Andrew Cracknell is stepping down as the creative chief of Bates UK, a subsidiary of Cordiant, and analysts foresee takeover bids from the likes of WPP and Publicics. However, these big hitters may be deterred by the fact that Cordiant comes with a great deal of debt, a dwindling client base and uncertified accounts.
Elsewhere, investors considered news that Telewest has reached a new deal with BSkyB to sell sports and movie channels. The news did little to cheer a subdued market and the stock was seen down 1.16%.
Top level salaries continue to ruffle feathers on reports that despite falling profit margins, executive pay rose by 28% in 2002. Simon Wolfson, chief executive of Next, and Todd Stitzer, the designated head of Cadbury Schweppes, are facing revolts from shareholders. Analysts expect to see similar dramas in the media sector over the coming months.
The closing prices of media company shares on Thursday were:
