LONDON, April 28, 2003 (PRIMEZONE) -- Cordiant Communications Group plc ("Cordiant") (NYSE:CDA) (LSE:CRI): Cordiant was notified on Friday, April 25, 2003 by one of its major clients, Allied Domecq plc, of its intention to terminate its contract with Cordiant with effect from October 2003.
In the current financial year Cordiant had budgeted for revenue from this global contract of approximately 18 million Pounds, some 3.4% of the Group's revenue in 2002. The direct impact of this client loss on revenue in 2003 will not be material, although the Group will incur associated restructuring costs in the current year. However, there will be a substantial impact on operating profit from 2004 onwards.
The Board of Cordiant had expected to announce its audited preliminary results on 30 April, for the year to 31 December 2002, in line with the headline figures announced on 20 February 2003, following the expected agreement of new financing terms with its lenders. In the light of recent developments, Cordiant is now evaluating whether it can issue its preliminary results by 1 May 2003. Cordiant recognises that, in accordance with the normal practice of the UK Listing Authority, trading in its shares will be suspended in the event that it is unable to issue its results by then.
Following Allied Domecq's decision, and particularly with the interests of the Group's clients in mind, the Board of Cordiant is actively investigating alternative strategic options for the Group, in addition to the disposal programme previously announced, which is progressing well. Cordiant continues to have the support of a co-ordinating committee of its banks and noteholders, and is working constructively with its lenders to amend the financing terms.
Forward-looking statements: This press release contains certain "forward-looking statements" and information that are based on the current expectations, estimates and projections of Cordiant's management and information currently available to Cordiant. These statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict. In addition, some forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. These statements typically contain words such as "intends", "expects", "projects", "anticipates", "estimates", "will" and words of similar import and, in this release, include statements relating to Cordiant's revenues, profitability, debt restructuring, asset disposals and cost reduction programme. Cordiant's actual performance could differ materially from that anticipated depending on, among other things, gains to or losses from its client base, the amount of revenue derived from clients, the challenges of managing Cordiant's global operations, including Cordiant's exposure to changes in the exchange rates of major currencies against the pound sterling, the general level of advertising expenditures in Cordiant's markets, the overall level of economic activity in Cordiant's major markets, the restrictions imposed by Cordiant's indebtedness, Cordiant's ability to restructure its existing indebtedness, employee costs, the loss of key personnel, future interest rates, changes in tax rates and other regulations that affect Cordiant's businesses, and other factors discussed from time to time in Cordiant's public filings with the U.S. Securities and Exchange Commission, including Cordiant's Annual Report on Form 20-F. Many of the factors named above are macroeconomic in nature and are, therefore, beyond the control of Cordiant's management. Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual performance may vary materially from those described herein as anticipated, believed, estimated, expected, intended, planned or projected. Cordiant does not intend, and does not assume any obligation, to update the forward-looking statements contained in this document.