Havas stems losses as fall in revenues gets narrower

The French advertising group, which posted a loss of €58m (£40.3m) for the first half of the year, said that market conditions remained unpredictable and that the UK and parts of Europe had failed to show the improvement seen elsewhere.

Havas is undergoing a massive reorganisation in the wake of its dire performance, and has identified 50 agencies that it plans to sell or close because they are not performing. The company said that if these agencies were excluded from its third-quarter revenue figures, organic growth would have fallen by less than 2%.

It has already closed or sold several agencies, and said that negotiations are under way for the sale of four more.

The board of Havas said that holders of a €450m Oceane convertible bond, issued in May 2002 and originally due to mature on January 1 2009, would now have the option to redeem their early repayment option for a cash payment of €1.20 a share, as the company improves its debt maturity profiles.

Alain de Pouzilhac, chairman and CEO, said: "The third quarter has seen the initial implementation of Havas' strategic reorganisation plan, the goal of which is to revitalise our revenues and profits from 2004.

"Thanks to a combination of the strategic reorganisation, positive trends in new business recorded this summer, and the offer to buy back the put of the Oceane maturing in 2009, Havas is confident in its goal of winning back marketing share. Internally, we are all more determined than ever to put the group back among the leaders in our industry."

Over the past quarter, Havas's Media Planning Group has picked up the France Telecom and Carrefour accounts, while Euro RSCG has won work for the drink brands Piper Heidsieck and Remy Martin on a global basis. The agency lost the Yahoo! account, as well as Wilson Sporting Goods in the US.

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