Cordiant produces 30 per cent growth in operating profits

Operating profits rose more than 30 per cent at Cordiant Communications Group, the parent of Bates Worldwide, in the six months to 30 June. But the UK proved the weakest link in the chain, with revenues virtually flat and an 18 per cent decline in profitability over the period.

Operating profits rose more than 30 per cent at Cordiant

Communications Group, the parent of Bates Worldwide, in the six months

to 30 June. But the UK proved the weakest link in the chain, with

revenues virtually flat and an 18 per cent decline in profitability over

the period.



Revenues at Cordiant in the UK climbed only 2 per cent to pounds 19.9

million, while operating profits fell to pounds 2.6 million from pounds

3.2 million. However, this, and a flat performance in Asia, was more

than offset by a near doubling of profit contributions from continental

Europe as major new assignments, especially Bates’ Seat win, began

filtering through.



The chief executive, Michael Bungey, said the UK’s results were affected

by two one-off projects in the previous year at Cordiant’s events arm,

HP:ICM, but also admitted Bates UK could do better.



’There have been times when they have won a lot more new business than

now,’ he said, adding that its recent restructure had provoked a

short-term period of inward focus. However, Bungey expected the benefits

of the reorganisation to be felt next year.



He reiterated Cordiant’s promise to raise operating margins on the

business, which includes Scholz & Friends, half of Zenith and other

smaller specialist groups. Margins came in at a relatively modest 6.7

per cent in the first half, but should rise to 10 per cent for the full

financial year and 11 per cent in the year 2000.



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