Cordiant Communication chief executive Michael Bungey has a problem with CEO of WPP Martin Sorrell...
Cordiant Communication chief executive Michael Bungey has a problem with CEO of WPP Martin Sorrell's pessimism about the prospects for advertising in the coming year. "Not everyone's talking it down," Bungey said. "As far as I can see there is only one person doing that and that is Martin Sorrell."
Cordiant certainly presented a more optimistic and upbeat assessment at the presentation of its results last week than WPP did a fortnight ago. The headline figures showed underlying revenue growth of over 12% and operating margins at the same mark. Actual revenues, boosted by acquisitions, were up 54% to £513m. The company also highlighted strong new business, mainly in advertising, in the region of £535m.
But Bungey was keen on pointing to the revenue shift taking place from advertising towards broader marketing and communications, which this year made up 50% of revenues. The target by 2003 is two-thirds. Moreover, exposure to the US is limited to 10% of group turnover and the business it does have is value for money brands such as Wendy's, Hyundai and Pfizer.
Media analyst at WestLB Panmure Lorna Tilbian believes Cordiant's growth targets look achievable without it having to work too hard on them. She is also keen on the company's figures that suggest 12% and above margins in the marketing side of the business.
On the day of the results many got the impression from Bungey's comments that the company was essentially putting itself up for sale. Though denials were issued in the weekend press, Merrill Lynch media analyst Thomas Deitz believes Cordiant is definitely an attractive target.