Newspaper article The Evening Standard (London, England)

WPP under Pressure as Rival Havas Reports Loss; Market Report

Newspaper article The Evening Standard (London, England)

WPP under Pressure as Rival Havas Reports Loss; Market Report

Article excerpt

Byline: MICHAEL CLARK

THE world's biggest advertising agency, WPP, came under selling pressure today, leaving the price nursing a loss of 51/2p at 5471/2p following further evidence that conditions in the industry remain grim.

French rival Havas weighed in with an attributable net loss of e58 million ([pounds sterling]40.6 million) in the first half of 2003 after goodwill write-downs. The results were at the bottom end of brokers' expectations. Operating profits fell from e115 million to e68 million.

Havas, the world's sixth-largest advertising group, has warned that its planned restructuring will cost e180 million, although it was expected to bring savings of e90 million in a full year. It was also expected to have a positive effect of some e110 million on its cash in 2004.

The company said that having put the plan in place, its priority would be to refinance convertible bonds due in 2006. Havas shares fell sharply on the Paris bourse. Sir Martin Sorrell, boss of WPP, has been brutally honest about the outlook for advertising during the past couple of years, so investors sat up and took notice when he recently came out with some optimistic comments.

The latest news from Havas may force analysts to lower their expectations again.

Share prices generally traded in narrow limits following an unconvincing performance by the Dow overnight on Wall Street.

In thin trading, the FTSE 100 index slipped 0.1 points to 4292.9 .

A strong set of interim profits from Cox Insurance and the first dividend payment since the 9.11 attacks brought in the buyers.

It was one of the best performers among second liners, adding 5p at 841/2p. City speculators continue to see Cox as a takeover target.

It recently rejected a bid of 120p a share from Peter Wood, founder of Direct Line insurance and now boss of E-sure insurance-Some say he may try again. …

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