Omnicom closes third office over coronavirus concerns

Agency group share prices have fallen this week as fears about coronavirus grow.

Omnicom CEO John Wren.
Omnicom CEO John Wren.

OMD Australia is the third Omnciom media agency to temporarily close its office after a London employee who visited Sydney was tested for coronavirus.

The Sydney office of OMD closed on Friday after the OMD U.K. employee, who visited Sydney on business and traveled back to London via Singapore, became ill with flu-like symptoms. 

OMD U.K. sent staff home on Wednesday as a precautionary measure, while sister shop PHD, whose office is next door to OMD in London’s Fitzrovia, followed suit hours later and advised employees to work from home. Both agencies expect to reopen on Monday, pending the employee’s test results. 

"OMD Australia has advised all Sydney employees to work from home today, following reports that one of our OMD London colleagues has come down with flu-like symptoms after visiting Sydney for business (via Singapore)," said Omnicom Media Group Australia and New Zealand chief executive Peter Horgan.  "While this is not a confirmed case of coronavirus, we have taken this precautionary measure as the health and safety of our employees is our top priority. OMD Australia has also notified all visitors to its Sydney office in the past week."

Omnicom has postponed global travel to or from China, Japan, Hong Kong, Iran, northern Italy, Singapore, South Korea, Thailand and Taiwan.

"Our first priority – now and always – is the health and safety of our people. As the number of reported coronavirus cases continues to grow, especially outside of China, we are updating our guidance," said Omnicom CEO John Wren. "Omnicom and our agencies will continue to follow the advice of the appropriate national regulatory authorities, as well as the World Health Organization."

Dentsu in Japan also shut its office this week after an employee tested positive for coronavirus.

Coronavirus, officially called Covid-19, has affected 83,000 people, nearly 3,000 of whom have died. The vast majority of deaths have occurred in China after the virus was discovered in Wuhan at the end of December. 

Health officials are warning that the world is on the brink of Covid-19 going from an epidemic to a pandemic, with significant outbreaks in Iran, Italy and South Korea of particular concern.

Holding company shares fall

Agency group share prices fell by more than 10% this week as fears about coronavirus grew. The London Stock Exchange dropped to its lowest level in more than a year, down 2.6% since Monday.

Interpublic Group's share price decreased by 12% from 25 cents when the New York Stock Exchange opened last Friday to 22 cents when it closed Thursday night.

Omnicom has had 11% wiped off its shares, which began the week at 78 cents and closed at 70 cents. For Publicis Groupe, shares fell 12% from 41 euro cents to 36 cents.

WPP’s share price crashed 19% this week, but this was mainly a result of the company reporting net sales declining 1.9% in the last three months of 2019 – its worst quarterly performance since Q1 2019.

In a report about WPP, U.K-based financial analyst Numis Securities added, "Covid-19 escalation fears are an incremental negative for a group traditionally seen as a barometer for global growth or activity."

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