Havas in profits warning after revenues fall 17.2 per cent

Havas has issued a profits warning, announcing that it expects to post a 17.2 per cent drop in revenues year on year to 1.65 billion euros.

The company has cited a poor fourth-quarter performance from its UK operations as one of the causes. In the UK, revenue was down 13 per cent year on year to 289 million euros.

When the company unveiled its global restructure last October, involving the merger of several properties around the world into the Euro RSCG network, it announced plans to axe 1,600 jobs. The overhaul hit the company's organic growth, which was down 5.7 per cent year on year. However, it showed an improvement in the fourth quarter, down just 3.8 per cent, compared with a fall of 6.8 per cent in the first half.

The company also blamed its performance on the strength of the euro against the dollar, which cost it 200 million euros.

The France-based network said it expects the market to improve in 2004 and to see an improvement in profitability. This year's net income will not be reported until next month, in accordance with French accounting regulations.

The fall in revenues is a further blow to the company's financial situation, after its share price fell 10 per cent in one week last month as speculation surfaced about accounting irregularities at the network.

The news overshadowed the promotion of the former McCann-Erickson chief, Jim Heekin, as chairman and chief executive of Euro RSCG Worldwide, replacing Bob Schmetterer who has retired.

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