By John Tylee, campaignlive.co.uk, Sunday, 03 September 2000 12:00AM
Advertising group Cordiant is pulling all its internet business into a single unit, to be called XN, marking a repositioning of the communications group for the digital age.
The new company's birth will be announced formally next week. It will operate initially across 12 countries offering strategic consultancy, creative work and technology marketing services.
Cordiant will have a majority stake in XN, leaving scope to incentivize staff and attract talent. It will take over most of the internet business at 141 Communications.
News of the initiative coincided with the announcement of a leap in pre-tax profits by almost a third last year to £32.3 million for the group, the Bates network parent and part owner of Zenith Media.
However, the restructuring of Bates UK into an integrated agency and the resulting management turmoil was reflected in a drop in the group's UK operating profits from £4.5 million in 1998 to £4.4 million with operating margins falling to 10.9 from 11.3 per cent.
Bungey said: "I thought the strategy was correct but its execution left something to be desired." Although Cordiant's operating margins reached 10 per cent for the first time, they still lag behind the industry average. Bungey's aim is to hit a 14 per cent target during 2003.
This article was first published on campaignlive.co.uk