Cordiant tumbles following loss of US Hyundai business
LONDON - Shares in Cordiant Communications fell sharply this morning, dropping almost 5% following the loss of its $160m (£112m) Hyundai Motor America creative account.
Hyundai announced last night that it had awarded the task to Dallas-based agency The Richards Group, following a four-way competitive review. The Cordiant-owned Bates USA West, Irvine, California had handled the business since 1986 when Hyundai first launched in the US.
Cordiant was down 4.71% to 91p as news of the loss hit the markets. The loss is the latest blow for the agency and follows the loss last year of the Korean car group's $300m media account, which was moved out of Bates and into Carat, owned by the Aegis Group.
Cordiant chairman Michael Bungey has in the past described the Hyundai business as a cornerstone of the group.
The loss of the account will likely spark more speculation about Cordiant's future as an independent agency group. Havas Advertising has been mentioned as a possible partner many times.
In an interview in yesterday's Independent, Bungey said: "It might make a lot of sense. We want Cordiant to be a major player in the global communications business and we might not be able to do that on our own. But right now we are not in discussions with anybody."
Last week, Cordiant reported pre-tax losses of £270.8m but despite this Bungey said the group is well positioned to profit quickly from any sustained upturn in the economy.
The losses resulted from a goodwill impairment charge of £224.8m. Before the charges, Cordiant reported pre-tax profits of £25.7m, compared with profits of £57.5m last time.
Bungey said: "The mix of businesses we have assembled, coupled with a maintained focus on cost, positions us well to profit quickly from any sustained upturn."
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